Drop Factor and implications

Drop Factor in last mile delivery in distribution logistics refers to the (average) number of parcels delivered per stop or recipient. It is gaining attention with the growth of e-commerce. 

If this drop Factor is high, there are economies of scale and profits are high. On the other hand if the drop Factor is low, it means, the delivery at each stop or to each customer is low and hence profitability is low. 

The value of the parcels delivered is also an important aspect. Low value items do not bring in the revenues to make the delivery profitable, even though the drop Factor is high. 

Recently I happened to order from the cloud kitchen Zomato. The cloud kitchens usually have a drop Factor of one, as each customer order is from different geographical location and coordinates. Moreover there is no time to aggregate orders for last mile delivery as customers are pampered with under 20 minute preparation + delivery in most cases. It works in most cases. But is it profitable for the provider in the long run? 

Can AI be used to make predictions of future orders ? Can the delivery boy take more items predicted to be ordered by customers enroute without actually receiving orders but with the hope that orders can come on the way and can be delivered very fast. When the orders cross a quantity threshold, Predictive logistics can improve drop factors and bring in more revenues for the organisation. 

George