Optimization Approach of Vehicle Routing By a Milk-Run Material Supply System

Material handling is one of the most crucial issues that should be taken into account for eliminating waste and reducing the cost. The purpose of this research is to develop a mathematical model, which will be helpful to construct the routes and determine the service period for the design of milk-run material supply system. The material supply by this system occurs on a just-in-time basis from a central warehouse to several stations. Milk-run material supply system is the round trips are either goods collected from several suppliers and transported to one customer, or goods collected from one supplier and transported to several customers. Besides, it's intends to construct routes based on an initial service period value and attempts to improve the solution by considering different period values. The most suitable solution is decided on the basis of the least total material handling and inventory holding cost. The objective of the mathematical model is the minimization of the total material handling and inventory holding cost. These saving could be either use for reduction of the product cost, which will boost up the sales or to lift the company profit margin.