An optimization method for designing ecological and economical procurement logistics system

Abstract

This paper proposes an optimization method by milk-run logistics for designing ecological and economical procurement logistics systems for an e-commerce company, especially the case in which the trucks pick up goods at several suppliers and deliver them to a different logistics center where the trucks started. The method consists of two major processes; selection process and optimization process. The system optimizes the following factors of procurement logistics: The number of trucks, the suppliers' depots each of the trucks picks up goods, and their order in which the truck travels. We conducted a case study for an existing Japanese e-commerce company, and demonstrated the effectiveness of the optimization system. © Springer-Verlag London 2013.