A multi-product, multi-depot periodic distribution problem

• Main Author: Parthanadee, Parthana
• Other Authors: Logendran, Rasaratnam
• Language: en_US
• Published: 2012
• Subjects: Physical distribution of goods > Evaluation; Warehouses > Management
• Online Access: http://hdl.handle.net/1957/30584

Physical distribution is one of the key functions in logistics systems, involving the flow of products from manufacturing plants or distribution centers through the network of transportation to consumers. The function is very costly, especially for the distribution industries. During the past decades, the significance of physical distribution has increased enormously in both economic and managerial aspects. Several firms have realized that an efficiency improvement and a cost control of physical distribution would provide a potential for cost reduction and hence profit improvement. However, the customer satisfaction cannot be disregarded, since the focus on reducing cost often decreases the customer service level in many cases. A compromised strategy which lowers the cost of physical distribution and accounts for customer satisfaction must be sought. In this research, an effort to improve distribution strategies and reduce the distribution cost for the multi-product, multi-depot periodic distribution problem is made, while maintaining the desired customer service levels. In industry practice, distribution centers typically operate independently within their own territories only. However, it may be beneficial to allow those distribution centers to operate interdependently, particularly when the product supplies are limited at some distribution centers. In such cases, the distributors may satisfy customers' requests by delivering products from other distribution centers that hold more supplies. The interaction of interdependent operations among distribution centers, which have not been used in the industrial applications so far, is investigated. A mixed-integer linear programming model is formulated to represent this multi-product, multi-depot periodic distribution problem. Three tabu-search heuristics with different applications of long-term memory are developed for solving the problem. The performance of the heuristics is evaluated by comparing the solutions obtained with the optimal solutions or lower bounds from the regular branch-and-bound method and fast lower-bound finding techniques developed in this research. The heuristics provide good-quality solutions in a much shorter time than those methods. The performance of the three tabu-search heuristics is compared using statistical experiments based on the randomized complete block design and Tukey's Honestly Significant Differences. The experimental results show that the tabu-search heuristic with the use of long-term memory for diversification process outperforms the others. The heuristic is further applied to investigate the impact of interdependent operations among distribution centers. The results reveal that the interdependent operations among distribution centers provide a significant cost saving over the independent operations among distribution centers, especially for large-size problems. === Graduation date: 2004