Optimizing rice distribution routes in Indonesia using a two-step linear programming considering logistics costs

Abstract

The increase in rice consumption should be balanced with an increase in rice production. However, although the national rice production was declared a surplus, the volume of national rice imports also increased. The imports in 2018 were 2.2 million tons and showed that surplus rice production is not effectively taken as an advantage in overcoming the deficit in some provinces in Indonesia. Some provinces that experiencing surplus should be able to fill the shortage in the other provinces. This paper contributes to determine distribution routes and help the government to fulfill the shortage demand. This study uses the two-steps linear programming method. The first step is performed by the transportation model and followed by the Capacitated Vehicle Routing Problem (CVRP) model in sequence. This two-step linear programming reaches an optimal global solution in distributing goods from oversupply provinces to the over-demand one. The results show cost savings are gained if this strategy is performed to meet the demand, rather than importing the rice.