Introduction
Existing decentralized company structure
Research problem
Description of the data
Significance of the research
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Decide on the best site for a central warehouse.
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A cost-optimized redistribution truck allocation system
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A root design for smooth redistribution
The study addresses a research gap
The importance of transportation mathematical models for policymakers
Related work
Assumptions and notation
Assumptions
Notation
Decision variables
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\({\text{R}}\) = total number of depots arranged in the method;
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\({\text{n}}_{{\text{i}}}\) = number of demand points in the ith depot, \({\text{i}} \in \left\{ {1,2,3 \ldots {\text{R}}} \right\};\)
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n = total number of demand points in the distribution;
Other parameters
Parameters for calculate warehouse operation and administration cost
Problem statement and model formulation
Problem statement
Identification of a new warehouse location by using the Gravity model
Demand Points | Demand value | Latitude | Longitude | Latitude*D/V(X) | Longitude*D/V(Y) |
---|---|---|---|---|---|
Dehiwala | 109,839,943.34 | 6.83667 | 79.8439262 | 750,939,445.47 | 8,770,052,330.22 |
Panadura | 50,534,312.42 | 6.7291202 | 79.8944164 | 340,051,462.48 | 4,037,409,398.77 |
Nugegoda | 30,837,303.75 | 6.8656182 | 79.8706401 | 211,717,153.84 | 2,462,995,189.16 |
Boralasgamuwa | 32,881,664.51 | 6.8365293 | 79.8897056 | 224,796,462.86 | 2,626,906,497.43 |
Battaramulla | 107,556,545.54 | 6.9001015 | 79.9029844 | 742,151,081.22 | 8,594,088,980.47 |
Maharagama | 79,324,049.21 | 6.8502516 | 79.9073489 | 543,389,695.00 | 6,338,574,476.17 |
Kottawa | 51,370,635.27 | 6.8690953 | 79.9797876 | 352,869,789.30 | 4,108,612,497.87 |
Homagama | 30,820,660.27 | 6.8451342 | 79.9887083 | 210,971,555.67 | 2,465,304,803.77 |
Malabe | 34,619,046.57 | 6.9043629 | 79.9479226 | 239,022,460.75 | 2,767,720,855.37 |
Angoda | 43,510,655.99 | 6.9333996 | 79.9161694 | 301,676,764.84 | 3,477,204,954.80 |
Piliyandala | 54,879,871.97 | 6.7896893 | 79.9012898 | 372,617,279.51 | 4,384,972,554.57 |
Kaduwela | 6,624,608.59 | 6.9299975 | 79.9733482 | 45,908,520.97 | 529,792,129.51 |
Maradana | 261,063,935.94 | 6.926745 | 79.8605224 | 1,808,323,312.95 | 20,848,702,303.98 |
Wattala | 168,494,022.45 | 6.989402 | 79.885278 | 1,177,672,457.50 | 13,460,191,824.71 |
Wellawatta | 31,208,418.96 | 6.8738385 | 79.8611775 | 214,521,631.74 | 2,492,341,085.72 |
Gampaha | 53,352,830.66 | 7.083605 | 80.006455 | 377,930,378.05 | 4,268,570,845.58 |
Kelaniya | 22,525,756.47 | 6.9559081 | 79.9169459 | 156,687,091.86 | 1,800,189,660.82 |
Kadawatha | 61,080,181.62 | 7.0097642 | 79.942525 | 428,157,670.46 | 4,882,903,946.33 |
Ja-Ela | 17,784,276.89 | 7.0742115 | 79.8937204 | 125,809,736.08 | 1,420,852,045.18 |
Negambo | 142,750,892.67 | 7.1963407 | 79.829926 | 1,027,284,058.88 | 11,395,793,198.20 |
Yakkala | 28,513,346.82 | 7.0877703 | 80.0232392 | 202,096,052.76 | 2,281,730,373.13 |
Meerigama | 47,583,630.89 | 7.253295 | 80.1096746 | 345,138,112.01 | 3,811,909,186.86 |
Weliweriya | 7,770,027.05 | 7.0346322 | 80.019072 | 54,659,282.47 | 621,750,353.84 |
Ragama | 6,554,858.77 | 7.0306524 | 79.9232021 | 46,084,933.58 | 523,885,302.59 |
Kochchikade | 13,327,673.99 | 7.2628576 | 79.8634837 | 96,796,998.30 | 1,064,394,474.15 |
Paliyagoda CWH | 1,569,243,475.83 | 6.954871182 | 79.91259064 | 10,913,886,227.89 | 125,402,311,494.85 |
Model construction
Model formulation for Calculate Fuel and Maintenance cost of Transportation
Total warehouse operation and administration cost calculation
A mathematical formula for calculating the total cost of transportation, warehouse operation, and administration.
Analysis of the research
Existing route analysis method
Distributor | Average Annual Demand (Values) | Average Annual Demand (Units) | Average Total Annual Demand (Values) | Average Total Annual Demand (Units) |
---|---|---|---|---|
Colombo District | 1,168,000,000.00 | 1,993,677 | 1,569,243,475.83 | 3,353,443.00 |
Gampaha District | 401,243,475.83 | 1,359,766 |
Calculation of the transportation cost—single depot cluster analysis vehicle routing method
Comparative study
Calculation of the optimal distances between each pair of towns using Algorithm
Starting Town | Ending town | Distance traveled (Km) | Capacity cubic volume | Transshipment node |
---|---|---|---|---|
Peliyagoda | Kelaniya | 2 | 10 | No |
Kelaniya | Angoda | 3 | 7 | Yes |
Angoda | Battaramulla | 6 | 30 | Yes |
Battaramulla | Malabe | 5 | 9 | Yes |
Malabe | Athurugiriya | 5 | 4 | Yes |
Athurugiriya | Kottawa | 7 | 17 | Yes |
Kottawa | Peliyagoda | 19 | 0 | Yes |
Total distance Traveled inside the cluster 1 | 47 km | |||
Total Volume within cluster (Cubic Volume) | 77 |
Starting town | Ending town | Distance traveled (Km) | Capacity cubic volume | Transshipment node |
---|---|---|---|---|
Peliyagoda | Wattala | 4 | 41 | No |
Wattala | Ragama | 8 | 2 | Yes |
Ragama | Kadawatha | 5 | 15 | Yes |
Kadawatha | Weliweriya | 10 | 2 | Yes |
Weliweriya | Gampaha | 7 | 15 | Yes |
Gampaha | Peliyagoda | 21 | 0 | Yes |
Total distance Traveled inside the cluster 2 | 55 km | |||
Total Volume within cluster (Cubic Volume) | 75 |
Starting town | Ending town | Distance traveled (Km) | Capacity cubic volume | Transshipment node |
---|---|---|---|---|
Peliyagoda | Ja-ela | 14 | 5 | No |
Ja-ela | Yakkala | 17 | 8 | Yes |
Yakkala | Meerigama | 24 | 12 | Yes |
Meerigama | Negambo | 32 | 35 | Yes |
Negambo | Peliyagoda | 33 | 0 | Yes |
Total distance Traveled inside the cluster 3 | 120 km | |||
Total Volume within cluster (Cubic Volume) | 60 |
Starting town | Ending town | Distance traveled (Km) | Capacity cubic volume | Transshipment node |
---|---|---|---|---|
Peliyagoda | Kaduwela | 12 | 2 | No |
Kaduwela | Homagama | 14 | 9 | Yes |
Homagama | Maharagama | 10 | 22 | Yes |
Maharagama | Piliyandala | 7 | 7 | Yes |
Piliyandala | Boralasgamuwa | 5 | 9 | Yes |
Boralasgamuwa | Nugegoda | 4 | 9 | Yes |
Nugegoda | Wellawatta | 4 | 9 | Yes |
Wellawatta | Peliyagoda | 15 | 0 | Yes |
Total distance Traveled inside the cluster 4 | 71 km | |||
Total Volume within cluster (Cubic Volume) | 67 |
Starting town | Ending town | Distance traveled (Km) | Capacity cubic volume | Transshipment node |
---|---|---|---|---|
Peliyagoda | Dehiwala | 18 | 28 | No |
Dehiwala | Panadura | 20 | 12 | Yes |
Panadura | Peliyagoda | 35 | 0 | Yes |
Total distance Traveled inside the cluster 5 | 73 km | |||
Total Volume within cluster (Cubic Volume) | 40 |
Starting town | Ending town | Distance traveled (Km) | Capacity cubic volume | Transshipment node |
---|---|---|---|---|
Peliyagoda | Kochchikade | 7 | 4 | No |
Kochchikade | Maradaana | 4 | 72 | Yes |
Maradaana | Peliyagoda | 8.5 | 0 | Yes |
Total distance Traveled inside the cluster 6 | 19.5 km | |||
Total Volume within cluster (Cubic Volume) | 76 |
Cluster | Kilometers | Total Volume |
---|---|---|
1 | 47 | 77 |
2 | 55 | 75 |
3 | 120 | 60 |
4 | 71 | 67 |
5 | 73 | 40 |
6 | 19.5 | 76 |
Total | 385.5 km |
Calculation of the transportation cost—single depot cluster analysis vehicle routing method
Cluster 01 | |||||||
---|---|---|---|---|---|---|---|
Description | Cost | QTY | Distance | Fixed cost | Extra distance | Extra distance cost (1 km = Rs.200) | Total cost |
Transport Cost | 77 | 47 km | 35,000 | 0 | 0 | 35,000 | |
Insurance for Goods | 1300 | 77 | 100,100 | ||||
Other Expenses | 3400 | 3400 | |||||
Supporting Staff Service Salary | 3*3500 | 10,500 | |||||
Total Cost | 149,000 |
Cluster 02 | |||||||
---|---|---|---|---|---|---|---|
Description | Cost | QTY | Distance | Fixed cost | Extra distance | Extra distance cost (1 km = Rs.200) | Total cost |
Transport Cost | 75 | 55 km | 35,000 | 5 km | 1000 | 36,000 | |
Insurance for Goods | 1300 | 75 | 97,500 | ||||
Other Expenses | 3400 | 3400 | |||||
Supporting Staff Service Salary | 3*3500 | 10,500 | |||||
Total Cost | 147,400 |
Cluster 03 | |||||||
---|---|---|---|---|---|---|---|
Description | Cost | QTY | Distance | Fixed cost | Extra distance | Extra distance cost (1 km = Rs.200) | Total cost |
Transport Cost | 60 | 120 km | 35,000 | 70 km | 14,000 | 49,000 | |
Insurance for Goods | 1300 | 60 | 78,000 | ||||
Other Expenses | 3400 | 3400 | |||||
Supporting Staff Service Salary | 3*3500 | 10,500 | |||||
Total Cost | 140,900 |
Cluster 04 | |||||||
---|---|---|---|---|---|---|---|
Description | Cost | QTY | Distance | Fixed cost | Extra distance | Extra distance cost (1 km = Rs.200) | Total cost |
Transport Cost | 67 | 71 km | 35,000 | 21 km | 4200 | 39,200 | |
Insurance for Goods | 1300 | 68 | 88,400 | ||||
Other Expenses | 3400 | 3400 | |||||
Supporting Staff Service Salary | 3*3500 | 10,500 | |||||
Total Cost | 141,500 |
Cluster 05 | |||||||
---|---|---|---|---|---|---|---|
Description | Cost | QTY | Distance | Fixed cost | Extra distance | Extra distance cost (1 km = Rs.200) | Total cost |
Transport Cost | 40 | 73 km | 35,000 | 23 km | 4600 | 39,600 | |
Insurance for Goods | 1300 | 40 | 52,000 | ||||
Other Expenses | 3400 | 3400 | |||||
Supporting Staff Service Salary | 3*3500 | 10,500 | |||||
Total Cost | 105,500 |
Cluster 06 | |||||||
---|---|---|---|---|---|---|---|
Description | Cost | QTY | Distance | Fixed cost | Extra distance | Extra distance cost (1 km = Rs.200) | Total cost |
Transport Cost | 76 | 19.5 | 35,000 | 0 | 0 | 35,000 | |
Insurance for Goods | 1300 | 76 | 98,800 | ||||
Other Expenses | 3400 | 3400 | |||||
Supporting Staff Service Salary | 3*3500 | 10,500 | |||||
Total Cost | 147,700 |
Comparing salaries and wages in the current situation and the proposed system.
Salary | Existing system | Proposed system | |||
---|---|---|---|---|---|
Number of employees | Total Cost | number of employees | Total Cost | ||
Area Manager | 85,000 | 2 | 170,000 | 1 | 85,000 |
Warehouse Manager | 80,000 | 1 | 80,000 | ||
Accountant | 70,000 | 2 | 140,000 | 1 | 70,000 |
Assistant Accountant | 55,000 | 2 | 110,000 | 1 | 55,000 |
IT Officer | 50,000 | 2 | 100,000 | 1 | 50,000 |
Logistics Officer | 50,000 | 2 | 100,000 | 1 | 50,000 |
Assistant Logistics Officer | 35,000 | 4 | 140,000 | 2 | 70,000 |
Clark | 20,000 | 2 | 40,000 | 3 | 60,000 |
sales ref | 30,000 | 18 | 540,000 | 6 | 180,000 |
Forklift Drivers | 28,000 | 9 | 252,000 | 3 | 84,000 |
Porters | 25,000 | 27 | 675,000 | 15 | 375,000 |
Store Porters | 25,000 | 9 | 225,000 | 4 | 100,000 |
Driver | 32,000 | 10 | 320,000 | 0 | |
Total | 89 | 2,812,000 | 39 | 1,259,000 |
Cost analysis of the total cost of the existing system and proposed system.
Destription | Total cost | Total Cost per Week | Total Cost per Month |
---|---|---|---|
Total Transportation Cost for Argent Point to Retail Market | 11*12,500 = 137,500 | 137,500 | 550,000 |
Total Lorry | 11 | ||
Total cubic volume capacity per week | 123 | ||
Lorry Insurance | 11*4190 = 46,090 | 46,090 | 184,360 |
Insurance of Goods (per cubic volume) | 123*1300 = 1,562,100 | 159,900 | 639,600 |
Total Safety Stock Cost | 87,000 | ||
Transportation Cost of Goods delivery from CWH to Argent Points | 87,500 | 350,000 | |
Salaries & Wages | 2,812,000 | ||
Total Cost Per Month | Rs. 4,535,960 |
Description | Cost value |
---|---|
Total Distribution Cost | 832,000 |
Warehouse Rent Cost | 600,000 |
Holding Cost | 240,000 |
Total Salaries Cost & Wages | 1,259,000 |
Electricity | 45,000 |
Water | 8500 |
Total Cost | Rs. 2,984,500 |
Total Transportation, Warehouse Operation and Administration Cost for Existing System | Rs. 4,535,960.00 |
Total Transportation, Warehouse Operation and Administration Cost for Proposed System | Rs. 2,984,500.00 |
Total Cost saving through new heuristic compared to the Existing Model | Rs. 1,551,460.00 (34.2%) |