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Analysing salesmen itinerary with agglomerative hierarchical clustering and vehicle routing algorithm - a case study of a confectionery supplier in Indonesia

Author

Listed:
  • Elia Oey
  • Alexander B. Marpaung
  • M. Idham Sofyan

Abstract

The study analysed salesmen itinerary of a confectionery supplier in Indonesia. Channel management and robust product distribution are important elements for confectionery business, since growth heavily depends on healthy product distribution. To support product distribution, optimising salesmen itinerary plays an important role in the firm's sales operation. The study was limited to optimising salesmen schedule for its wholesalers' outlet type, since it contributed to 78% of its revenue. The analyses were carried out using 'cluster first-route second' approach. For clustering the customer nodes, it recommended agglomerative hierarchical clustering (AHC) method. For routing within each customer's cluster, it tested two algorithms, i.e., Clarke-Wright and weighted-serving time-visual approach. The result showed that AHC-weighted-serving-time-visual algorithm was as good as AHC-Clarke-Wright with 2.1% cheaper variable cost. The proposed algorithm was adapted from practical insight and easier to be understood.

Suggested Citation

  • Elia Oey & Alexander B. Marpaung & M. Idham Sofyan, 2019. "Analysing salesmen itinerary with agglomerative hierarchical clustering and vehicle routing algorithm - a case study of a confectionery supplier in Indonesia," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 31(3), pages 287-303.
    • Handle: RePEc:ids:ijisen:v:31:y:2019:i:3:p:287-303
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