Multi-Product Multi-Vehicle Inventory Routing ProblemWith Mixed Integer Linear Programming

Multiproduct Multivehicle Inventory Routing (MMIRP) is an extension of the Inventory Routing Problem (IRP) that integrating route and inventory decisions simultaneously to minimize total transportation and inventory costs. This paper aims to implement The MMIRP method to design the routes of LPG distribution in Indonesian LPG supply chain.The MMIRP model of this article considers two products: 5.5 kg and 12 kg LPG and 2 vehicles to dispersed sub-agent and retailer customers. The existing distribution activities the company does not pay attention a route sequence and inventory at the customers so the expenses of transportation costs are very high and when the customer visited the inventory level is still high. The problems are solved using Mixed Integer Linear Programming with LINGO software. The results obtained after applying MMIRP resulted in a total distance can savings of 1.75% or 9.77 km, reducing total fuel consumption of 13.39% or 11.84 liters and minimizing total transportation and inventory costs by 16.01%.

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