Vehicle routing approach for an efficient distribution: A case of a state-owned Indian cooperative dairy

Abstract

This study is a case of a state-owned dairy situated in Varanasi, India. The cooperative dairy distributes on an average 10K litres of milk per day through hired homogeneous vehicles to its retailers. The cost of distribution is paid on the basis of per litre milk distribution, making the distribution cost quite high. Presently, the cooperative dairy has existing seven routes with approximately 64 retailers. The routes are reduced to seven supply nodes called stockists. These stockist points were further reduced to four cluster served by four vehicles by a formulation of vehicle routing problem with appropriate constraints like demand matching, time window with arrival and departure and vehicle capacity. Further, clusters of retailers to be served from stockist points with optimum number of small capacity vehicles were also found. LINGO was used as a platform to solve the problem and the result shows that distribution cost has substantially reduced, giving a competitive advantage to the dairy. © 2017 Inderscience Enterprises Ltd.