Determination of optimal depot location for a capacitated vehicle routing problem (CVRP) based on gross vehicle weight

The fuel consumption of a vehicle depends on its gross weight, which varies as goods are successively unloaded at each wholesaler site or distribution centre within a transportation network. There exist multiple routes and many wholesalers with different demand quantities within the network. Again, transportation cost varies according to the route and the depot location (DL) from which the vehicle departs. Hence, this article aims to determine the optimal DL for Ly-Foods Ltd.'s transportation network, utilising a capacitated vehicle to fulfil wholesalers’ demands, based on gross vehicle weight (GVW). First, we develop some analytical and mathematical models (mixed-integer programming-MIP) to determine the minimum transportation cost for each location. Second, we verify our models for other instances and compare our results with some heuristic results. We find the optimal location for the depot for the transportation network of Ly-Foods, which saves a maximum of 10.43 litres of fuel in a trip. This research holds significance for the manufacturing or distribution companies aiming to set up depots within a new transportation network. Furthermore, our models are applicable to transportation networks featuring multiple routes and numerous wholesalers, where the management is planning to shift DL with the changes in wholesalers’ demands.