Transportation Cost Analysis and Route Optimization in Multi-Echelon Distribution System

Multiechelon distribution systems involving different layers like suppliers, warehouses, and retailers are paramount to the management of the supply chain. The research work develops a model for the analysis of transportation costs at all these echelons besides route optimization with the aim of reducing the overall operational costs without sacrificing service levels. The integration of inventory and transport planning through MILP models will ensure timely delivery while reducing the costs of transportation and holding. Computational experiments prove the validity of the model as substantial savings in cost and improved efficiency in distribution are noted compared to traditional approaches.