Title: Analysing salesmen itinerary with agglomerative hierarchical clustering and vehicle routing algorithm - a case study of a confectionery supplier in Indonesia

Authors: Elia Oey; Alexander B. Marpaung; M. Idham Sofyan

Addresses: International Business and Management Program, Management Department, BINUS Business School Undergraduate Program, Bina Nusantara University, Jakarta, 11480, Indonesia ' International Business and Management Program, Management Department, BINUS Business School Undergraduate Program, Bina Nusantara University, Jakarta, 11480, Indonesia ' International Business and Management Program, Management Department, BINUS Business School Undergraduate Program, Bina Nusantara University, Jakarta, 11480, Indonesia

Abstract: The study analysed salesmen itinerary of a confectionery supplier in Indonesia. Channel management and robust product distribution are important elements for confectionery business, since growth heavily depends on healthy product distribution. To support product distribution, optimising salesmen itinerary plays an important role in the firm's sales operation. The study was limited to optimising salesmen schedule for its wholesalers' outlet type, since it contributed to 78% of its revenue. The analyses were carried out using 'cluster first-route second' approach. For clustering the customer nodes, it recommended agglomerative hierarchical clustering (AHC) method. For routing within each customer's cluster, it tested two algorithms, i.e., Clarke-Wright and weighted-serving time-visual approach. The result showed that AHC-weighted-serving-time-visual algorithm was as good as AHC-Clarke-Wright with 2.1% cheaper variable cost. The proposed algorithm was adapted from practical insight and easier to be understood.

Keywords: cluster first-route second; vehicle routing problem; VRP; agglomerative hierarchical clustering; AHC; Clarke-Wright; weighted-serving time-visual approach; Indonesia.

DOI: 10.1504/IJISE.2019.098541

International Journal of Industrial and Systems Engineering, 2019 Vol.31 No.3, pp.287 - 303

Received: 08 Dec 2016
Accepted: 16 Mar 2017
Published online: 26 Mar 2019 *

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