Commercial use of Unmanned Aerial System (UAS) has the potential to reshape the delivery market and to open new business opportunities to small businesses, e.g., local stores, pharmacies, restaurants, as well as to large international and national businesses and government entities, e.g., Amazon, Google, UPS, power companies, and USPS. Simulation models can examine the value added to current business operations, the effects of radical shifts in current operations, and the formation of new types of businesses. This paper presents an envisioned future UAS delivery business operation models and develops a theoretical constructive simulation model. The conducted simulation analysis based on full factorial design estimated causalities between multiple independent and dependent business and policy factors e.g. drone velocity, flying altitude, number of drones, delivery demand, route type, maximum drone fly-time, number of orders completed, time average drone density, order time, drone utilization, and reachability of customers.
Although military is traditionally a major user of UASs (Blyenburgh 1999), commercial applications of UASs are clearly on the move. Small commercial drones are used to create marketing videos, capture news, develop movies, support agriculture, and in hobby activities e.g. racing. Teal Group calculated the 2015 UAS market at 72% military, 23% consumer, and 5% civil cumulative for the decade (Teal 2015). Of the three areas, civil UASs will grow most rapidly over the forecast period, but it grows from a very low base. Unmanned Aerial Vehicle (UAV) production will soar from current worldwide UAS production of $4 billion annually to $14 billion, totaling $93 billion in the next ten years. Note that in this paper words “drone”, “UAS”, and “UAV” are used as synonyms. Finnegan said that “UAVs are no longer of interest only to aerospace companies, but increasingly technology companies like Google, Facebook and Amazon see a need to be in the market” (Teal 2015). The drone industry is expected to climb to a $8.4 billion by 2019 (ABI 2015). “Application services, data services, licensing and legal services” are expected to fuel this climb, according to Dan Kara, an ABI Research Director, at the RoboUniverse Conference in New York (Kara 2015).
In the future, commercial UASs have the potential to open new opportunities to small businesses, e.g., local stores, pharmacies, restaurants, and international large businesses and government entities, e.g., Amazon, Google, UPS, power companies, and post offices. It is likely that UASs will enable both, the option for a direct delivery service offered by a business to their customers as well as the use of UASs in a business to business (B2B) model. In both cases services may be related to delivery of goods, inspections, and leisure activities.
The public can benefit from the use of drones as a service, such as on demand remote renting of a drone to take pictures or make videos. Similarly, government entities, including police and firefighters will find drones useful for information gathering. Business analysis to support decisions to invest in UASs including necessary infrastructure involves multiple considerations. For instance, the location of the hub(s) nodes that host UASs, size of the fleet, and business operations are important considerations to support efficient product delivery and other services. Beyond these concerns, technical and policy problems related to UAS reliability, safety, automatic route and schedule planning, among other issues require in depth analysis.
This paper presents an envisioned future UAS delivery business operation and a simulation-based study related to the most basic UAS delivery system scenario. The purpose of this research is to investigate requirements for the development of customizable business solutions related to a UAS delivery system.
Traditional delivery business process presumably involves a ground vehicle operated by a delivery person. This delivery business process involves a human in the loop so it is quite easy to enable various options related to paying at the time of delivery and conducting deliveries at multiple locations in sequence. The delivery person can take a significant amount of cargo, which makes delivery more economic by saving time and fuel. Except for accessing highly remote locations such as islands, ground based vehicles running on gas have few limitations due to their long range. Ground delivery vehicles contribute to increased traffic volume and produce negative environmental effects due to carbon emission. Moreover, delivery drivers can experience car accidents, robberies, and other problems during the delivery process. Depending on the type of products being delivered, some customers do not like person-based delivery because of sanitary, safety, and trust issues. Depending on the type of delivery customers may be encouraged to give a tip to a delivery person. While most people are accustomed to this, the increased cost of the product can be sometimes detrimental.