Abstract
This study presents the Location Routing Problem (LRP) for which we have created a model for the integration of locating facilities and vehicle routing decisions to solve the problem. The case study is the Palm Oil Collection Center, which is also important for the supply chain system. A mathematical model was made to minimize the total cost of a facility-opening cost, fixed cost of vehicle uses and fuel consumption cost. The fuel consumption cost relies on the distance and road conditions, in case of poor physical condition of a road, and its width, which can be affected the speed of the vehicle as well as the used fuel. Thus, we propose an Adaptive Large Neighborhood Search (ALNS) based on heuristic for solving the LRP. The ALNS method was tested with three datasets of samples divided into small, medium and large problems. Then, the results were compared with the results from the exact method by the Lingo program. The computational study indicated that the ALNS algorithm was competitive to the results of the Lingo for all instance sizes. Moreover, the ALNS was more effective than the exact method; approximately 99% in terms of processing time. We extended this approach to solve the case study, which was considered to be the largest problem, and the ALNS algorithm was efficient with acceptable solutions and short processing time. Therefore, the proposed method provided an effective solution to manage location routing decision of the palm oil collection center.
Highlights
Logistics management and operations cost management are the major driver of economic growth in many countries
Thailand is ranked 45th with an logistic capability index (LPI) score of 3.26, which shows that the logistics performance of Thailand is at a low level
It is influenced by the development of logistics in various sectors, especially in the agricultural sector, which is considered the main sector of Thailand
Summary
Logistics management and operations cost management are the major driver of economic growth in many countries. There are many palm oil plantations in the case study area; it made the problem more complicated for the plan to find a collection point and transport to the palm oil processing plant. Inappropriate location of palm oil collection points, as well as improper transportation routes can be resulted in the higher cost of logistics system [3]. The purpose of this research was to study the selection of locations of palm oil collection points and to arrange vehicle routes for transportation, as well as proposing the form of problem and heuristic method used to solve Location Routing Problem. This research investigate the palm oil transportation routes from farms to the collection point with the lowest total cost which include fuel consumption cost and is consistent with constraint satisfaction.
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