A Model to Choose Hub and Route Determination

Abstract

Determining a transport hub is a strategic decision to build a good distribution flow. In this paper, We suggested a model for choosing hub locations as sources for companies. In previous studies, The determination of hub locations with a vehicle routing problem is not integrated. Therefore, This study built a model to assess the position of the hubs by considering the budget. The business should have a decision on vehicle routing with hubs to reduce total transport costs. In addition, the method of distribution of goods for hubs and non-hubs with third-party logistics was determined by the use of a vehicle routing problem. The optimal weight obtained through the analysis of sensitivity. In the sensitivity analysis, This study found that the best choice in this study was to use a weight of 0.9–1.0. This provides the lowest total cost of transport.

The Model for Location Routing Problem with Roaming Delivery Locations

“…For that purpose, the LRP model was developed to accommodate the determination of depot locations and vehicle routing. Another study conducted by Kevin, Aritonang, and Lesmono [23] also successfully integrated the two decision-making areas. Nagy and Salhi [24] found that location routing could decrease costs over a long planning horizon.…”