Title: An empirical analysis on robust Vehicle Routing Problem: a case study on drug industry

Authors: Babak Farhang Moghadam, Seyed Jafar Sadjadi, Seyed Mohamad Seyedhosseini

Addresses: Department of Industrial Engineering, Islamic Azad University – Parand Branch, Narmak, Tehran, Iran. ' Department of Industrial Engineering, Iran University of Science and Technology, Narmak, Tehran, Iran. ' Department of Industrial Engineering, Iran University of Science and Technology, Narmak, Tehran, Iran

Abstract: This study considers the application of Robust Optimisation (RO) to a basic Vehicle Routing Problem (VRP), in which customers with uncertain demand are supplied from a single depot. In particular, demands are assumed to be uncertain and no sufficient historical information is available to estimate the probability distributions of uncertain parameter values. We use the VRP model proposed by Miller et al. with the demand uncertainty. We present computational results that investigate the trade-offs, the robust and the deterministic solution. The proposed approach is also used in real world case study of medicine distribution and the preliminary results indicate that the method could reduce the unmet demand significantly.

Keywords: supply chain management; SCM; robust optimisation; VRP; vehicle routing problem; mathematical programming; uncertainty demand; logistics; medicine distribution; drug industry; pharmaceutical industry.

DOI: 10.1504/IJLSM.2010.035635

International Journal of Logistics Systems and Management, 2010 Vol.7 No.4, pp.507 - 518

Published online: 01 Oct 2010 *

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