Optimization of vehicle routing: A case of arts in business administration

Abstract

Tho Phat Company is a processing food company. The increasing number of customers makes the distribution decision more complex. As a result, the transportation cost is increasing and vehicles take longer time than necessary to deliver goods. There are needs of methods to help the distribution manager make decision that would minimize transportation cost as well as satisfy customers’ requirement. This thesis presents a research on the Vehicle Routing Problem using a sweep heuristic method and an integer programming model for vehicle routing problem with time window model to select the best route to delivery product to customers. The model is built to resolve cases that have difference in time window between two groups of customers. Likewise other optimized model limitation, the proposed integer programming model can solve effectively cases of a small number of customers. To overcome that limitation, this paper proposes clustering nodes first by using sweeping method. This phase aims to form sets of cluster that each satisfies the vehicle’s capacity while the second phase finds optimal sequence of nodes within these clusters. The results showed that the proposed model in this study yields less traveling distance than the performance of the company by 14.23%. Finally, recommendations instructing the implementation of the model into the company are provided.