Determination distribution route of beverage products with the application of the vehicle routing problem model and sensitivity analysis

Abstract

Vehicle Routing Problem (VRP) is the problem of determining the optimal route to distribute goods or products using vehicles to some customers. The goals are to minimize the cost and distance of distribution by observing some constraints or restrictions. The problem of determining the distribution route of beverage products in Serang City by a beverage distribution company can be solved by applying the VRP model by considering the vehicle capacity limit. The optimal solution of route determination models is obtained by using Branch and Bound method of the LINGO 18.0. Results showed that the optimal route of distribution with the implementation of the VRP model could minimize the total distribution costs incurred by the company compared to the existing distribution route used by the company. Sensitivity analysis results showed that changes in fuel costs resulted in optimal routes gained by the application of the VRP model could not be sustained, so a new decision was required by the company in determining the distribution route. The reduction in fuel costs resulted in a reduction in total distribution costs and increased fuel costs increased the total cost of distribution.