What is Level of Significance

This chapter focuses on the distribution-allocation problem with fixed cost for transportation routes in a two-stage supply chain. The supply chain considered in this research consists of suppliers, distributors and customers. Each transportation route is associated with a fixed charge (or a fixed cost) and a transportation cost per unit transported. The presence of this fixed cost makes the problem difficult to solve. This motivates the researchers to develop heuristics based on non-traditional optimization techniques that can provide near-optimal solutions in reasonable time. In this research, an ant colony optimization based heuristic is proposed to solve a distribution-allocation problem with fixed cost for transportation routes in a two-stage supply chain. The comparative analysis carried out in this study reveals that the solutions obtained using proposed heuristic are better than those obtained using an existing heuristic in terms of total cost and computational time. In addition, special emphasis is placed in developing heuristics based on ant colony optimization for solving supply chain related problems and identifying opportunities for further research in this area.