Route Optimization of Raw-Milk Collection from Small Farmers located in Remote Villages in India

Inbound milk-run routing is a challenging problem that deals with the collection of raw-milk from remote villages to the dairy processing plants, especially in developing countries. The paper focuses on inbound logistics, which involves the gathering of raw-milk from farm producers and transferring the milk to the processing plant. The objectives of the study are to underpin the theoretical foundation of the routing problem and to optimize the inbound milk-run route of a dairy processing plant to reduce the cost of transportation. One of the processing units of a leading dairy company located in Madurai, a Tier II city in India, is the focal point of the study. The raw milk is collected from multiple small and remote villages in Madurai district and transported to the processing plant via nine milk-run routes. In order to optimize the milk-run routes involved in the collection of milk and to lower the transportation cost, the problem has been formulated as a traveling-salesman problem. Applying the genetic algorithm technique, the route optimization is achieved using Excel solver. Based on the output, five milk-run routes are altered and rerouted to reduce the total distance traveled. The proposed optimization model reduces the transportation costs significantly.