Pick-up products from suppliers by milkrun method at a automotive factory

Pick up and delivery activities are important cost factors in the supply chain management system. Pick up the commodity from suppliers is an important issue as delivery of the products to customer in the logistic activities. The most important decision in the logistic management is routing supplier and demand points.Milk- Run in literature is a sophisticated application that aims to decrease the incoming material stock, estimate the delivery times, manage the job-sharing and forecast the demand by getting materials not from a distribution center but from various suppliers.The aim of this study is to determine the optimum route with vehicle routing and scheduling methods while decreasing the logistic and stock costs and keep production and supply coordinated.So, the milk run application is considered and a mixed integer mathematical model has been developed to calculate the routes. As a result of solving model by GAMS, Cplex solver, it has seen that in addition to decreasing on logistic and labor cost also delivery time savings can be obtained.Key Words: Supplier Chain Management, Vehicle Routing, Milk-run, Mixed Integer Programming.