Transportation Cost Reduction by Applying a Hybrid Ant Colony System Algorithm, a Case Study: V-Drink Factory, Kalasin, Thailand

Abstract

Logistics management is an essential component to increase business competitiveness for SMEs in the era of Thailand 4.0. With the aid of technology and innovation development, logistics management must provide both proper customer support and cost reduction in the delivery of goods. This research studied the routing of goods delivery for a drinking water factory seeking the shortest route with an objective of reducing the delivery cost. We proposed a hybrid goods delivery routing algorithm. The algorithm produced from the original routing was also tested and compared with the proposed hybrid algorithm. The comparison results showed that the Ant Colony System (ACS) routing gave the best solution when compared to the Genetic Algorithm (GA), the Simulated Annealing (SA) and the Tabu Search (TS). We then combined the ACS with an Iterated Local Search (ILS) and a TS. The results, when compared with the original route, indicated that the proposed Hybrid Ant Colony System Algorithm routing can reduce the distance and fuel cost by 2.24% per week, working out to approximately 887.52 baht per year. Meanwhile, it can reduce delivery time for 1 cycle from 7 days to 5 days, which can reduce labor costs by up to 46,080 baht per year. The proposed hybrid algorithm is a technological implementation that can be considered to reduce the manufacturing and transportation costs of for this drink factory business