Delivery by drones (unmanned vehicles) as an alternative or complement to traditional delivery by trucks is attracting considerable attention from major retailers and service providers (Amazon, DHL, UPS, Google, etc). Drone delivery has the potential to offer considerable economic savings, but the fundamental issues of how best to deploy drones for home delivery are not well understood. Our research provides a strategic analysis for the design of hybrid truck-drone delivery systems using continuous approximation modelling techniques to derive general insights. We formulate and optimize models of the expected delivery cost for hybrid truck-drone delivery, where truck-based drones make deliveries simultaneously with the trucks. We compare the performance of truck-drone delivery to truck-only delivery and explore the sensitivity of the results to key operating parameters and the spatial density of customers. Our results show that hybrid truck-drone delivery has the potential to provide significant cost savings and that deploying multiple drones per truck offers larger, but marginally decreasing savings. Results also show how the benefits from using drones depend strongly on the relative transport costs and stop costs for the trucks and drones.
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