Periodic Route Optimization for FMCG Distributors

Abstract

Izmir based Information Technology (IT) solution provider develops supply chain management software tools for many customers from fast moving consumer goods sector (FMCG). Customers of the FMCG sector needs to be visited a certain number of times in a given period by sales representatives. The company must decide which customers must be visited in which sequence by each sales representative while obeying visit frequency and time windows requirements. These decisions have significant impact on total cost. For this reason, finding an optimal route for every sales representative for each day of the planning horizon is important. This practically challenging and technically important problem can be described as periodic multiple depot traveling salesman problem with time windows (PMDTSPTW). We propose a novel mathematical model for the optimal solution of this problem. The proposed model minimizes the total distance traveled by sales representatives by deciding which sales representative will visit which customer on which day while following the time windows to collect demand data. The proposed model is applicable to any company from FMCG sector. The solution approach in this study is implemented and tested with real life including coordinates and location data of customers and sales representatives from Turkey’s largest beer distributor. The proposed model is solved using IBM ILOG CPLEX Optimization Studio version 12.8. The results show significant improvement over the current situation. To ensure efficient usage of the proposed approach, a user-friendly decision support system (DSS) is constructed and implemented.