Integrated Logistics and Transportation Routing in Rural Logistics System

Abstract

The agricultural distribution problem of Rural Logistics System is addressed in this paper to improve farmers' income by minimizing annual total cost. The system consists of three entities: (i) logistics terminal, (ii) distribution warehouses, and (iii) industries. The logistics terminal collects agricultural products from farmers' crops, which are stored in distribution warehouses, which are further distribution based on demand of industries. This study developed non-linear mix integer programming model to minimize the annual total costs by incorporating (i) the approach of coordinated planning system, (ii) concept of echelon stock, (iii) single time cycle policy and (iv) transportation route. Many constraints were developed using various criteria. Feasible solution to the mathematical model was obtained by using heuristics method by Clarke and Wright.