ABSTRACT

Cross-docking is a process where goods from suppliers are delivered directly to the customers,

with minimal storage and material handling through a cross-dock yard. It is a strategy widely

used in the supply chain and logistics industry. This is to improve efficiency and productivity

in the industry. In a cross-dock, minimal storage space is needed just for product consolidation

as the goods do not stay there for long. However, for traditional warehouses, large amount of

storage spaces is needed to keep the goods. They must wait until there is a customer order then

it will be picked and delivered. Hence with cross-docking, it helps to reduce the total costs and

increases customer satisfaction with a shorter delivery time. However, to achieve a good

product flow in the cross-dock system, extensive use of planning software is needed. In this

study, issues on the vehicle routing and the scheduling of the vehicles is considered. A

mathematical model is proposed with the use of a meta-heuristic algorithm, Tabu search.

In this study, the literature on the cross-dock operations is done first. It covers the problem

faced on different operating levels. It then focuses on the vehicle routing and scheduling

problem under the operational level.

Followed by an extensive review on the model used with the incorporation of the Tabu search

algorithm. The use of the aspiration criteria is also included in this study to allow better and

attractive moves that are trapped in the restriction criteria to be overridden.

Lastly, the results showed that despite having long computation time, an optimal route for the

deliveries can be obtained which can minizine the total cost and lead to better customer

satisfaction.
 ACKNOWLEDGEMENTS

The author would like to express his heartfelt gratitude and appreciation towards the following

people in supporting and guiding towards the completion of this project.

Firstly, Associate Professor Rajesh Piplani, for his patience, guidance and trust that he gave

the author to complete the project. Without his guidance, the author would not have the luxury

of time and space to complete this project.

Next, PhD student Prakash Rakesh, for taking his timeout to guide the author despite his busy

schedule. His extensive help allowed the author to better understand the use of MATLAB

software and be able to apply it on his project.

Finally, to the friends who have helped the author along the way when he needed advice and

guidance along the way.

 Table of Contents
ABSTRACT................................................................................................................................................. i
ACKNOWLEDGEMENTS ........................................................................................................................... ii
LIST OF FIGURES & TABLES ..................................................................................................................... v
1. INTRODUCTION ................................................................................................................................... 1
1.1. RESEARCH BACKGROUND ....................................................................................................... 1
1.2. RESEARCH OBJECTIVES ........................................................................................................... 2
1.3. RESEARCH SCOPE .................................................................................................................... 2
2. LITERATURE REVIEW ........................................................................................................................... 3
2.1. CROSS-DOCKING .......................................................................................................................... 3
2.1.1. TACTICAL LEVEL..................................................................................................................... 3
2.1.2. STRATEGICAL LEVEL .............................................................................................................. 4
2.1.3. OPERATIONAL LEVEL ............................................................................................................. 5
2.1.3.1. SCHEDULING PROBLEM ................................................................................................. 5
2.1.3.2. ASSIGNMENT PROBLEM................................................................................................. 6
2.1.3.3. TRANSHIPMENT PROBLEM ............................................................................................ 6
2.1.3.4. VEHICLE ROUTING PROBLEM ......................................................................................... 7
2.1.3.5. PRODUCT ALLOCATION PROBLEM ................................................................................. 7
2.2 TABU SEARCH................................................................................................................................ 9
3. MATERIALS AND METHOD ............................................................................................................ 10
3.1 TABU SEARCH ALGORITHM ......................................................................................................... 10
3.1.1 RESTRICTION & ASPIRATION CRITERIA ................................................................................ 11
3.1.2 MEMORY FUNCTIONS .......................................................................................................... 11
3.2 DEVELOPMENT OF TABU SEARH ALGORITHM ............................................................................ 12
3.2.1 INTITAL PHASE...................................................................................................................... 13
3.2.2 GENERATION OF NEIGHBOURHOODS.................................................................................. 15
3.2.3 SELECTION OF NEIGHBOURHOOD ....................................................................................... 17
3.2.4 STOPPING CRITERIA ............................................................................................................. 17
3.3 MODEL DEVELOPMENT............................................................................................................... 18
3.3.1 FORMULATION OF MODEL .................................................................................................. 19
3.4 GENERATION OF DATA SETS ....................................................................................................... 27
3.4.1 TEST DATA SETS ................................................................................................................... 27
3.4.2 PROBLEM PARAMETERS ...................................................................................................... 28
4. RESULTS AND DISCUSSIONS .......................................................................................................... 31
4.1 RESULTS OF TS_VRSP .................................................................................................................. 31
4.2 EFFECTS OF ASPIRATION CRITERIA ............................................................................................. 32
5. CONCLUSION AND FUTURE WORKS ............................................................................................. 33
5.1 CONCLUSION ............................................................................................................................... 33
5.2 FUTURE WORKS .......................................................................................................................... 34
REFERENCES .......................................................................................................................................... 35
LIST OF FIGURES & TABLES

Figure 2. 1 Cross-dock planning model .................................................................................................. 8

Figure 3. 1 Tabu search short-term memory component ...................................................................... 12
Figure 3. 2 An illustration on greedy algorithm.................................................................................... 14
Figure 3. 3 Illustration on the adjacent pairwise interchange mechanism ............................................ 16
Figure 3. 4 Process flow in cross-docking ............................................................................................ 19
Figure 3. 5 Decision variables relating to receiving process at the inbound dock area ........................ 22
Figure 3. 6 Decision variables concerning the outbound area and customer location .......................... 23
Figure 3. 7 Decision variables of the model ......................................................................................... 24
Figure 3. 8 TS_VRSP workflow ........................................................................................................... 26
Table 3. 1 Test data sets ........................................................................................................................ 27
Table 3. 2 Illustration of parameters values .......................................................................................... 30
Table 4. 1 Test data results ................................................................................................................... 31
 CHAPTER 1

1. INTRODUCTION

1.1. RESEARCH BACKGROUND

Cross-docking is an operation process where goods from suppliers are delivered directly to the

customers, with minimal storage and material handling through a cross-dock yard.

(Viswanathan, 2000). As speed and productivity is key to the growth of the organisations,

cross-docking is a strategy widely used in the supply chain and logistics industry. The

difference between a traditional warehouse and a cross-dock yard is the process flow in the

facility itself. For a traditional warehouse, large amount of storage space is needed to keep the

products. Only when there is a customer order then it will be picked and delivered. For the

cross-dock, goods will arrive and might not even need storage space. They will be consolidated

and being delivered. This can significantly reduce the costs that are involved in this cross-

docking process.

However, there are several constraints to achieve a smooth product and process flow in the

cross-dock. The constraints are mainly vehicle routing and scheduling problem (VRSP), the

cross-dock layout design and the network design. The network and layout design problem have

been researched on by many, but not on the VRSP. Minimizing of total cost in the cross-dock

system was done through optimization of the VRSP (Young Hae Lee, 2006). However, no

optimal solution could be found.

Truck scheduling in the cross-dock yards were also researched on. However, fixed outbound

schedules were not delved into (N. Boysen, 2010). Numerous algorithms have been designed

and proposed to solve the VRSP. (Wu, 2015) proposed using 4 different heuristics algorithms

to solve the VRSP, but real sized problems could not be solved. (José Brandão, 1997) proposed
incorporating Tabu Search (TS) algorithm to develop a mathematical model to solve the VRSP.

Due to some intrinsic differences between the problems, it could not be implemented on real

sized problems as well. (Agustina, 2016) proved that TS algorithm has the most potential in

solving the VRSP. Nonetheless, there is still much research to be on TS algorithm. The

previous work done by (Agustina, 2016) only covered the basis of short-term memory function.

Components such as the aspiration criteria could be considered to achieve a better solution for

the routing of vehicles and eventually minimize the costs as well.

1.2. RESEARCH OBJECTIVES

This paper proposed and developed a mathematical model to solve the VRSP through the

implementation of TS algorithm. To achieve the objectives, 3 tasks were required to be

completed. Firstly, the aspiration criteria was included into the mathematical model which

ensured that if a better solution is classified as forbidden, it would be allowed to override the

current solution. Next, to optimise the VRSP, a program was generated. Lastly, in the process

of testing the model on real sized problem the algorithm was validated.

1.3. RESEARCH SCOPE

Firstly, the constraints in the VRSP and how TS algorithm can help with the problem were

discussed in this study. Next, a mathematical model was generated using TS algorithm that was

needed to solve the VRSP. Subsequently, it showed that by using aspiration criteria, a better

routing solution can be obtained.