Integration of Multi-period Vehicle Routing Problem and Economic Selection of Customers with the Objective of Optimizing Distribution, Sales and Discounts Planning

Abstract

Making decisions about the economic selection of the customers plays a significant role in the sale and logistic management of the companies. Furthermore, another issue affecting the relationship between the suppliers and the customers is the proper and timely distribution of the products as well as the optimum mixing of the distribution routes to reduce transportation costs. In this paper, the issues of the integration of routing, and the economic selection of customers has been explored aiming at minimizing the transportation, maintenance, and discount costs and maximizing the products selling profits. In addition to the amount of customer's purchasing, costumers' collection period is effective to offer them discounts. The economic customers are selected due to three factors: the discount on the price of the product, the marginal profit of the requested products, and the distance from the supplier's warehouse. Games software was used for the exact solution of the model, and Simulated annealing algorithm was used to solve the model in larger dimension. The efficiency and applicability of the proposed model was approved comparing the optimum results with a high preciseness as 98.91 percent. Moreover, in the case study of Kalleh Company, the results revealed 14% increase in pure profits.