Development of delivery consolidation procedures at courier service companies using Monte Carlo simulation

Courier service company offers several delivery time schemes. The longer the delivery time, the cheaper the tariff offered and vice versa. Longer delivery time scheme gives courier service company greater flexibility to consolidate delivery of product with different delivery time scheme so that utilization of vehicles and the number vehicle needed can be minimized. Therefore, it is very important for company to have good consolidation procedure to reduce cost of delivery. In this study, a procedure was developed to improve existing consolidation procedures. The main difficulty in developing procedures is due to uncertainty in the volume of goods and the scheme of the delivery time chosen by consumers both at origin and destination. Monte Carlo simulation is used to estimate improvements in utilization and the number of vehicle needed by using a new consolidation procedure. The simulation result shows that the proposed consolidation procedure able to increase utilization of the vehicle and reduce the number of vehicle needed. In the case of delivery goods on Jakarta-Bandung route, the proposed procedure able to reduce the number of vehicle needed by 13.4% and increase its utilization by 13%.