Two-Echelon Capacitated Vehicle Routing Problem With Time Window

Abstract

Vietnam retailing market continues to thrive as cities expand, granting opportunities for retailers to develop their network and, in fact, most retailers are now omni-channel to fulfill variety of demand of customers. However, it is vital that the retailer can plan and execute transportation service for their channels as one system to utilize effect of centralization. This thesis is a case study of Saigon Co.op’s distribution system to Ho Chi Minh stores, Vietnamese retailer, who are currently suffered from a fragmented network as their channels are planned separately. The objective of the research is to minimize the operating cost of Saigon Co.op transportation. Thus, it is proposed that large stores can play the role of a satellite facilities to delivery to smaller stores and multiple drop points are applied to increase primary truck size. The problem is recognized as a Two-echelon Capacitated Vehicle Routing problem with Time window and solved using Simulated Annealing algorithm. The results prove that the model can be adopted for daily generation of good routing scheme. Keywords: two echelons, capacitated vehicle routing, time window, simulated annealing, omni-channel,