Abstract for: When More Stops Hurt Performance: A System Dynamics Model of Last-Mile Delivery

Last-mile delivery systems face growing demand pressures. Managers cope by intensifying routes, that is adding more stops to a given route. This causes reduced service times, increases the probability of failed deliveries and increases delivery reattempts, eventually creating feedback loops that erode capacity and performance. System Dynamics model to represent the feedback mechanisms linking route intensification, service time compression, delivery failures, reattempts,overtime, and capacity erosion. The approach focuses on identifying endogenous behavior that drives the system. This paper develops a System Dynamics model to explain how increasing stops per route and using overtime can undermine last-mile delivery performance. As service time per stop is reduced, delivery failures and reattempts increase, eroding effective capacity. The model shows how systems may sustain high activity while performance and route economics deteriorate. The model suggests that common responses to demand growth generate unintended reinforcing dynamics. More stops and overtime improve short-term output, but reduce service reliability and increases reattempt workload. Over time, the accumulation of these effects weakens system performance.