A hybrid fuzzy-optimization approach to customer grouping-based logistics distribution operations

Abstract

This paper presents an integrated fuzzy-optimization customer grouping based logistics distribution methodology for quickly responding to a variety of customer demands. The proposed methodology involves three main mechanisms: (1) pre-route customer classification using fuzzy clustering techniques, (2) determination of customer group-based delivery service priority and (3) en-route goods delivery using multi-objective optimization programming methods. In the process of pre-route customer classification, the proposed method groups customers' orders primarily based on the multiple attributes of customer demands, rather than by static geographic attributes, which are mainly considered in classical vehicle routing algorithms. Numerical studies including a real-world application are conducted to illustrate the applicability of the proposed method and its potential advantages over existing operational strategies. Using the proposed method, it is shown that the overall performance of a logistics distribution system can be improved by more than 20%, according to the numerical results from the case studied. (c) 2006 Elsevier Inc. All rights reserved.