The vehicle routing problem with time windows: A case study of fresh food distribution center

Abstract

Inefficient routing leading to an increase in cost for outbound is a common problem many distribution centers encounter. This paper introduces an approach to establish a routing system to be cost saving and sustainable, ensuring better utilization of truckload comparing to the current situation as well as strictly following retailer time for receiving orders. Vehicle Routing Problem (VRP) would be reviewed and a mathematical model will be proposed in order to find optimal set of routes with minimum total cost. To satisfy the requirements of orders, VRP with time window (VRPTW) is applied to consider upper time and lower time constraints, and capacity of vehicles constraints. However, this model follows a NP-hard problem, the new approach is introduced divided into 2 stages to reduce size of the model. The approach includes a heuristic-based clustering algorithm which was applied to group of locations into a certain number of clusters, and then VRPTW is used to solve for each cluster to find optimal set of routes.