Track: Supply Chain Management

Abstract

The rapidly growing communication technology brings not only an opportunity but also a challenge to the printing industry. Consumers are significantly moving from conventional media to digital. Determining the optimal distribution route to ensure a smooth distribution flow is crucial to retaining customers by providing an optimal service. One of the limitations in the distribution process is related to vehicle capacity (Capacitated Vehicle Routing Problem). Previous research has succeeded in determining a combined route between three newspaper industry companies in Surakarta, but each company still needs optimal independent routes. Using the saving matrix method with the milk-run system, this study aims to determine the optimal route for distributing newspapers independently, focusing on one of the newspaper companies by considering three conditions: when demand increases, decreases, and is static. Nearest Insert and Nearest Neighbor methods are used to optimize the distribution route. The results show that each of the three conditions has two optimal routes. When the demand is static, the total monthly cost is IDR 618,750. When the demand increases, the total cost per month will be IDR 562,650, and when the demand decreases, the total cost per month will be IDR 592,350/month.