Intelligent cost optimized central warehouse and redistribution root plan with truck allocation system in Colombo region for Lion Brewery Ceylon PLC

Abstract

This research is a case study based on Lion Brewery Ceylon PLC, Biyagama, which is a famous beer company and the market leader in Sri Lanka. Researcher identifies that, currently Company outbound logistics is consisted with a decentralized distribution and a redistribution process for bottles and cans in Colombo region, and an extra cost is being spent for that unnecessarily. The main objective of this research is to build a cost minimized model for distributing Bottles and Cans for the region. For that, all demand regions in Colombo region was divided in to main 6 sub clusters. Then a centralized Warehouse and an optimal path which joins each sub cluster has been determined. The gravity model (By using excel solver) was used to find a centralized warehouse that can easily be connected with each sub cluster. The optimal path was determined through Hamiltanian cycle by using the lingo software. Finally, the milk run was completed with determining a cost optimized truck allocation system through linear programming model. At the end result proved that, the proposed model saves the monthly cost of bottles distribution by 17.2% and monthly cost of cans distribution by 11.6%.