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In Event: OPERATIONS FINANCE INTERFACE: Innovations in Business and Technology: Transforming Industries
Same-day delivery and other fast delivery modes are not accessible to the customers in the rural areas. Drones offer a new transportation mode bound to have transformative impacts on local communities, society, economy, and the environment. This paper proposes an integrated drone delivery model by exploring the integrated delivery cost structure, as well as the incentive mechanism designated by the government agency to promote delivery equity. The sensitivity analysis reveals how the incentive mechanism makes it possible for private drone companies to launch the drone delivery system to reduce the delivery cost and improve equity in rural areas.