An Optimization Model for Single-Warehouse Multi-Agents Distribution Network Problems under Varying of Transportation Facilities: A Case Study

The transportation cost of goods is the highest day-to-day operational cost associated with the food industry sector. A company may be able to reduce logistics cost and simultaneously improve service level by optimizing of distribution network. In reality, a company faces problems considering capacitated transportation facilities and time constraint of delivery. In this paper, we develop a new model of order fulfillment physical distribution to minimize transportation cost under limited of transportation facilities. The first step is defined problem description. After that, we formulate a integer linear programming model for the single-warehouse, multiple-agents considering varying of transportation facilities in multi-period shipment planning. We analyze problems faced by company when should decide policy of distribution due to varying of transportation facilities in volume, type of vehicle, delivery cost, lead time and ownership of facilities. We assumed transportation costs are modeled with a linear term in the objective function. Then, we solve the model with Microsoft Excel Solver 8.0 Version. Finally, we analyze the results with considering amount of transportation facilities, volume usage and total transportation cost. Keywords: physical distribution, shipment planning, integer linear programming, transportation cost, transportation facilities