| A consolidation center was established near a set of suppliers with perishable products that have a deterioration rate to consolidate their products and reduce transportation costs. A deterministic demand was considered to solve the model for optimal transportation and holding costs to the suppliers via consolidation center. The products from all suppliers were consolidated at the center to reduce freight transportation costs, which would otherwise have been individually shipped by each supplier. A mixed integer programming (MIP) model was developed to solve the optimal cost of shipping considering the holding cost, transportation cost and deterioration rate. The MIP model was then solved using IBM ILOG CPLEX software. The results of the CPLEX model were compared to new model, which involves decomposition of the original model and using a Lagrangian relaxation heuristic. |
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