An intelligent Cost Optimized Central Warehouse and Redistribution Root Plan With Truck Allocation System in Colombo Region for Lion Brewery Ceylon Plc

Abstract

This thesis is a case study based on Lion Brewery Ceylon PLC, Biyagama, which is a famous beer company and the market leader in Sri Lank. Company outbound logistics has been considered in this research and it is mainly focuses on distribution and redistribution process in Colombo region. A Centralized distribution strategy has been applied for the region under three ways in order to find an optimal location of new facility through determining a route plan with cost optimized truck allocation system. Current trucks have been allocated to new roots and the purpose is to find a cost optimized distribution system. To find an optimal location, Gravity model has been used and Hamiltonian cycle was used to find an optimal path between sub clusters. Lingo software has been used to solve Hamiltonian cycle problem and linear programming model solved using MS excel solver. According to the unit cost, linear programming model result has been manually adjusted. Central warehouse capacity plan, cost comparison of existing model and proposed model including milk run and the labour cost has been embedded to this research. Finally, author has compared total cost of centralized distribution and decentralized distribution while proving a huge cost benefits/savings (21.8% savings) than decentralized distribution.