09/02/2025

Lesson 5

Technical tools
in supply chain
design

Do Thi Thu Ha, PhD.

Do Thi Thu Ha, PhD.

Chapter objectives
After completing this chapter, you should be able to:
 Discuss methods of solving vehicle routing and scheduling
problems
 Apply these methods to your business plans as well as
your individual plans

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Lecture outline
In this chapter, you will learn about:
1. Introduction to optimisation
2. Vehicle routing and scheduling
3. Travelling salesman problem (TSP)
 Nearest-Neighbor Algorithm (NNA)
 Cheapest-Link Algorithm (CLA)

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Introduction to optimisation
Optimisation: Many problems in practice consist of the search for a
solving problems in which “best” solution of a set of variables to achieve some
one seeks to minimise or goals: optimization problems.
maximise an objective
Service type Objective
function by systematically
choosing the values of the School bus Minimize student-minutes on the bus
decision variables from Logistics Minimize the distance travelled to pick
within an allowed set. up and/or to deliver parcels following
optimum routes
Scheduling or routing Emergency Minimize response time
objectives of different types of (ambulance,
services police, fire)

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Travelling salesman problem (TSP)

The simplest case, a classic
combinatorial optimisation problem.
 nodes have no precedence
relationship
 travel costs between two nodes are
the same regardless of the direction TSP:
traveled Given n cities, find the
 no delivery time restrictions shortest route that visits all
the cities once, and starts
 vehicle capacity is not considered
and ends at the same city

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Travelling salesman problem (TSP)

 Given n cities, total possible routes:
½ (n-1)!
 The number of routes grow exponentially with growth in
the size of the problem: combinatorial explosion.
 Do for all the cities:
1. select a city as current city.
2. find out the shortest edge connecting the current
An optimal TSP tour through city and an unvisited city.
Germany’s 15 largest cities. 3. set the new city as current city.
It is the shortest among
4. mark the previous current city as visited.
43,589,145,600 possible
tours visiting each city 5. if all the cities are visited, then terminate.
exactly once. 6. go to step 2.
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This map shows how to

take an epic road trip
across Europe
 45 European cities
 50 must-see places in Europe
 14 days of driving
 Several months of sightseeing

By Randal Olson
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Do Thi Thu Ha, PhD.

48 contiguous US
states; visiting only
National Natural
Landmarks, Historic
Sites, Parks, and
Monuments; and
never leaving the
US

The perfect road trip across the US would take you to all
the must-see landmarks and historical sites and minimize
unnecessary driving
By Randal Olson
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Vehicle routing and scheduling

 Consider a milk van delivering milk to 4 distribution centers (DC)
everyday morning as shown below
DC a
2
3 DC b

DEPOT 1 7 miles

10 miles 4 DC c
5
DC d
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Vehicle routing and scheduling

 Nodes: 1 2 3 4 5
 Arcs:
DC a
 Tour:
2 DC b
123451 total distance
3 traveled is 53 miles
DEPOT 154321
1  Feasibility: Minimum-cost solution or
7 miles
any other criterion like time or distance
10 miles 4
traveled is subject to the tour being
feasible
5 DC c (i) A tour must include all nodes
DC d (ii) A node must be visited only once
(iii) A tour must begin and end at a depot.

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Solutions 1:
Nearest-Neighbor Algorithm (NNA)
To node (distances in
DC a From miles)
node
2 DC b 1 2 3 4 5
3
DEPOT 1 - 12 3 12 10
1 7 miles 2 12 - 8 10 4
10 miles 4 3 3 8 - 7 6
5 DC c 4 12 10 7 - 16
DC d 5 10 4 6 16 -

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Solutions 2:
Cheapest-Link Algorithm (CLA)
DC a
2

3 DC b

DEPOT 1

4 DC c

5
DC d
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Solutions 2:
Cheapest-Link Algorithm (CLA)
From To node (distances in miles)
node 1 2 3 4 5
1 - 10 12 9 8
2 10 - 14 13 8
3 12 14 - 6 7
4 9 13 6 - 9
5 8 8 7 9 -
125341
 The length of the tour is 40 miles
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If you can’t
describe what
you are doing as
a process, you
don’t know what
you’re doing.

– W. Edwards Deming –

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