The design of vehicle routes for a third-party logistics service provider using the simulated annealing algorithm

M. Raj Mohan, P. Shahabudeen and G. Kannan

International Journal of Business Performance Management, 2009, vol. 11, issue 1/2, 1-18

Abstract: Increased globalisation and the subsequent competitive pressures have emphasised the importance of Third-Party Logistics (3PL) in managing logistics processes as well as customer and supplier relationships in logistics and supply chain management. Organisations can gain approximately 9% of saved costs and a 15% increase in capacity and quality, on average, through outsourcing their logistics activity to 3PL service providers. Transportation planning and management is a basic service provided by 3PL service providers with the goal to provide customer value in excess of their cost to serve customers. Since the transportation cost constitutes a significant fraction of the total logistics cost, 3PL service providers are motivated to improve their efficiency by ensuring on-time deliveries and pick-ups by designing least-cost routes with efficient routing strategies. In this paper, a Simulated Annealing (SA)-based metaheuristic algorithm was developed for and used by a 3PL service provider for the efficient routing of the vehicles for pick-up for an automotive parts manufacturing company.

Keywords: supply chain management; 3PL; outsourcing; third-party logistics; metaheuristics; simulated annealing; vehicle routing; transportation planning; transportation management; automotive parts manufacturing; automobile industry. (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=23798 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbpma:v:11:y:2009:i:1/2:p:1-18

Access Statistics for this article

More articles in International Journal of Business Performance Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().