Optimizing Transportation Cost Applying Vehicle Routing Problem: A Case Study Of Thanh Thanh Cong Sugar Company

Abstract

One of the key components of logistics and supply chain management is the reduction of transportation expenses. There is a method that could be used to lower the cost of transportation. The Vehicle Routing Problem (VRP), which seeks to determine the optimum routes for trucks to deliver goods to a set of consumers while minimizing distance and expense, is implemented in this way. In addition to reviewing recent studies on the use of the VRP for transportation cost optimization, this paper assesses the potency of various methodologies and algorithms that have been put out in the literature. The study examines the pros and cons of two scholarly publications that address the VRP. According to the findings, there are a variety of methods that can be employed to optimize transportation costs using the VRP. To address the difficulties and constraints posed by real-world transportation scenarios, additional study is necessary. After a lengthy period of financial investment, the Time Value of Money (TVM) principle is also used to calculate the real transportation cost. Due to inflation, combining the two ways of cost calculation will result in a more accurate transportation cost. The outcomes show how the suggested strategy is effective in lowering transportation costs and offer logisticians and transportation managers useful insights for practical implementations.