Solving the Two Echelon Vehicle Routing Problem Using Simulated Annealing Algorithm Considering Drop Box Facilities and Emission Cost: A Case Study of Reverse Logistics Application in Indonesia

Abstract

A two echelon distribution system is often used to solve logistics problems. This study considers a two-echelon distribution system in reverse logistics context with the use of drop box facility as an intermediary facility. An optimization model of integer linear programming is proposed, representing a two-echelon vehicle routing problem with a drop box facility (2EVRP-DF). The aim is to find the minimum total costs consisting of vehicle transportation costs and the costs to compensate customers who have to travel to access these intermediary facilities. The results are then compared to those of common practice in reverse logistics. In common practice, customers are assumed to go directly to the depot to drop their goods. In addition, this study analyzes the environmental impact by adding a component of carbon emissions emitted by the vehicles. A set of comprehensive computational experiments is conducted. The results indicate that the 2EVRP-DF model can provide optimal costs and lower carbon emissions than the common practice.