Multi Products Distribution Using

Direct Shipping and Cross

Docking

Amelia Santoso
Department of Industrial Engineering
University of Surabaya, Indonesia
Email: amelia@ubaya.ac.id
Agenda
 Introduction
 Research Framework
 Model Development
 Results & Discussion
 Conclusion

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 need coordination for
distributing product
Introduction
Distribution systems

Distribution types

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 Integrated cross docking & VRP
cross docking terminal transfers
multi products that were
consolidated from supplier
using direct shipping

Supplier Retailer

S1 R1

Cross docking
R2
terminal

no
inventory considered the possibility for
SS RJ This paper: integrated transferring from supplier to
cross docking, VRP & retailer beside via cross docking
direct shipping
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 Research Framework
Supplier Retailer
Multi Product distribution
S1 R1
considering direct shipping
Cross docking
terminal
R2
and cross docking
SS
no
inventory
RJ
• multi supplier
• multi retailer

The optimization model is developed by integrating

VRP concept

cross docking concepts

direct shipping

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Model development
 To determine which the retailers order will be fulfilled
• directly from suppliers or
• from cross docking terminal
in order to minimize total system cost
ASSUMPTIONS
 time consumption of repacking is assumed not
significant  the products from suppliers are still
delivered to retailers in the same period
 The product prices at all suppliers are assumed
similar

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The objective function: Minimize
total system cost (TC) = total direct shipping cost (DSC) +
total cross docking cost (CDC)
Fixed direct shipping cost Variable direct shipping cost
DSC   FCTsi  ZSRsit   VCT psi  QSR psit
s i t p s i t

Fixed & variable transportation cost from supplier to cross dock

CDC   FCTC s  ZSC st   VCTC ps  QSC pst 
s t p s t

repacking cost Fixed cross docking cost

 Cpack  N
i v t
ivt   FCC v  ZCR vt 
v t

Variable cross docking cost Variable cost based on distance

 

p

v 
VCC pv  
i t
QCR pivt    CTijv  X ijvt
 i j v t 7
 to ensure transferring product directly
constraints from supplier to retailer when there is a
shipment from supplier to retailer
to ensure every retailer order is fulfilled  QSR psit  M  ZSRsit ; s, i, t
 QSR psit  QCR pivt  D pit ; p, i, t
p

s v  QSR
p
psit  MORD  ZSRsit ; s, i, t

 QSR
vehicle capacity constraint
psit  TQSRsit ; s, i, t
 QCR
p i
pivt  K v  ZCRvt ; v, t p

to ensure product is transferred in cross

to guarantee no inventory at cross docking system when there is a shipment
docking terminal
 QSC pst  M  ZSC st ; s, t
 QSC pst   QCR pivt ; p, t p

s i v QCR pivt  M  ZC pivt ; p, i, v, t

number of consolidated packing  QCR pivt  M  Z ivt ; i, v, t
 ZCR
p
pivt  N ivt ; i, v, t p

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 (15)

Constraint (2)
(16)

common VRP constraints

to guarantee VRP is used for transferring X

j
1 jvt  1 ; v, t
products from cross docking terminal to
multi retailers X i1vt  1 ; v, t
X ijvt  Z ivt ; i, v, t i
j
X ikvt   X kjvt  0 ; k , v, t
Z i
ivt  M   X 1 jvt ; v, t
j
i j

Nivt ≥ 0 and integer ;i,v,t

Xijvt; Zivt; ZSCst; ZCRv; ZCpivt; ZSRsit = {0,1}

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Results & discussion
Numerical example: the distribution system consists of
3 suppliers,
a cross docking terminal and
9 retailers
with time planning horizon is 4 period
each supplier can supply 5 types of product via cross
docking terminal or directly to retailers.
at cross docking terminal, there are 2 vehicles

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the product quantity shipped from supplier
to cross docking terminal per period

Period 1 Period 2 Period 3 Period 4

P3 = 118
Supplier 1 - - -
P5 = 73
P1 = 83 P1 = 54 P1 = 37 P1 = 68
Supplier 2
P4 = 46 P4 = 63 P4 = 73 P4 = 76
P2 = 42 P2 = 43 P2 = 100
Suplier 3 P2 = 51 P3 = 60 P3 = 46 P3 = 50
P5 = 65 P5 = 65 P3 = 81

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Vehicle Route for transferring product per period
from cross dock terminal to retailers

Vehicle 2
Period 1 Period 2 Period 3 Period 4
Cross dock Cross dock Cross dock Cross dock
Retailer 1 Retailer 1 Retailer 4 Retailer 1
Retailer 9 Retailer 8 Retailer 5 Retailer 2
Route
Retailer 8 Retailer 5 Retailer 8 Retailer 6
Cross dock Cross dock Cross dock Retailer 3
Cross dock

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 Product Location Period 1 Period 2 Period 3 Period 4
Supplier 1 Retailer 1 0 0 194 0
Retailer 2 0 0 0 0
Retailer 3 0 0 174 0
Retailer 4 220 187 0 187
Retailer 5 0 0 0 0
Direct Retailer 6 0 0 0 0

shipping for Retailer 7

Retailer 8
176
0
186
0
0
0
176
0
transferring Supplier 2
Retailer 9
Retailer 1
0
0
0
167
0
0
0
0
product per Retailer 2 0 167 159 0
Retailer 3 0 0 0 0
period from Retailer 4 0 0 0 0

suppliers to Retailer 5
Retailer 6
0
0
0
0
0
0
0
0
retailers Retailer 7
Retailer 8
0
0
0
0
0
0
0
156
Retailer 9 0 196 219 0
Supplier 3 Retailer 1 0 0 0 203
Retailer 2 227 0 0 0
Retailer 3 169 183 0 0
Retailer 4 0 0 0 0
Retailer 5 167 0 174 222
Retailer 6 162 171 167 0
Retailer 7 0 0 195 0
Retailer 8 0 0 0 013
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Retailer 9 0 0 0 167
Conclusion
 This paper proposed integrated direct shipping, cross
docking and vehicle routing problem for distributing multi
product from multi supplier to multi retailers.
 The model determine simultaneously which retailer will be
fulfilled directly from supplier or via cross docking; and
vehicle route of shipment from cross docking terminal in
order.
 Further researches: considering product price, considering
VRP for transferring product from supplier to cross
docking terminal

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