OPTIMAL ALLOCATION OF CUSTOMER LOCATION FOR DISTRIBUTION CENTER: A CASE STUDY OF ICE MANUFACTURING COMPANY IN CHONBURI PROVINCE

Abstract

The case study company has faced high transportation costs and decreased in customers due to Covid-19 situation and lack of technology to manage transportation system in terms of specifying the location of the customer, transport routing and customer zoning. The objectives of the research were 1) to establish a database indicating the customer's location on an online map and 2) to allocate the optimal customer groups of each distribution center using integer linear programming for the minimization of total transport distance. This will result in lower overall transportation costs. It was found that the transportation cost in the company's transportation operations can be reduced by 27.08% in terms of distance and working hours of drivers, representing a reduction in costs of 85,315 baht/year.