Engineering, Project, and Production Management
EPPM 2013 Conference Papers
A LOCATION-ROUTING PROBLEM ― THE CASE OF DISTRIBUTION CENTER IN THE US ―
Pornthipa Ongkunaruk†1,Chawalit Jeenanunta 2
1Department of Agro-Industrial
Technology, Faculty of Agro-Industry, Kasetsart University, Thailand E-mail:
pornthipa.o@ku.ac.th
2Sirindhorn International Institute of Technology, Thammasat
University, Pathum Thani, 12000, THAILAND Email: chawalit@siit.tu.ac.th
Abstract:The goal of this study was to improve the warehouse and transportation management of a case study company which produced drink in the US. Currently, there is only one warehouse that covers all the demand in the US. Thus, transportation cost is very expensive and could not be responsive to the demand. Therefore, the objective of this study is to reduce transportation cost by selecting the new warehouse with the truck delivery routing. This problem becomes the Location Routing Problem (LRP). Then, we propose a mixed integer programming to minimize the total cost of fixed and variable cost of warehouse, vehicles and transportation cost. In addition, in order to make it computational feasible, we propose a solution method to make the possible zoning and select the warehouse with the truck routing within the zone. Then, we used IBM ILOG CPLEX to solve on the numerical case data to obtain the optimal result. The result showed that after selecting the having the new warehouses, the total weekly logistics cost was reduced by 28.7%.
Keywords:Vehicle Routing, Location Routing Problem, Logistics, Mixed Integer Programming
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