Optimal solution techniques to the vehicle routing problem arising in Lion Beer distribution in Sri Lanka

The problem investigated in this paper originated from the distribution of beers by a Colombo-based company, Lion Brewery (Ceylon) PLC, in Sri Lanka. Currently, this company’s outbound logistics consist of a decentralized distribution model and a redistribution process for its beer bottles and cans in the Colombo region. Extra routing costs due to unreasonable consumption of additional distance have been noticed in the current decentralized redistribution process. Here, the problem is modeled as a variant of the vehicle routing problem with a heterogeneous fleet. Our objective is to minimize the routing costs by imposing constraints on the volume of company vehicles. Centralized heuristic and genetic algorithm solution procedures for the problem are presented. The superior performance of the proposed heuristic is demonstrated relative to existing heuristics through a beer distribution instance and 10 additional small-scale real-world application instances. The computational investigation highlights the cost savings that the proposed heuristic can accrue. The cost savings can be as significant as 19.84% compared to a company’s existing decentralized method, 4.34% compared to the genetic algorithm, and 6.73% and 2.47% compared to the two recent methods. This cost-saving has a practical impact on supplying customers with a necessary drink, beer, at a reduced price.