Annals of Management Science


Collection and transportation of milk from farms to production factories is a crucial issue around the world. This problem can often be seen as a special case of the Truck and Trailer Vehicle Routing Problem (TTVRP) in which a trailer cannot be driven along with a truck to the farms and must be parked in the nearest available parking place while the truck visits farms and collects milk. Then, the truck returns to the parking place, transfers milk to the trailer and starts a new sub route or continues the route with the trailer. The collections, transportation, and distribution operations in TINE SA, a leading dairy company in Norway, is a typical example of this problem. In this paper, we solve a real world planning and distribution problem for the company (TINE SA). A method involving a clustering technique followed by a heuristic based on tabu search is developed to solve this problem. The proposed method is able to find a cost-effective solution by using natural geographical clusters and choosing vehicle types that fit better to the farms production and the dairy plants demand. The new suggested solution produces a more suitable vehicle mix and collecting frequency, a better utilization of vehicles and smaller variable costs than the current route structure of the company.