Chapter 2: Literature Review

Milk is the basic necessity of our daily life. When we hear the word “Milk” the first thing

that pops in our mind is health and purity. It is essential from the early birth of human till the old

age. It is recommended to drink 8 ounces of milk daily to achieve the daily dose of calcium, iron

and other minerals.

It is one of the important sector in agriculture which plays a vital role in development or

downfall in economy of Pakistan. It constitutes 55.9% of agricultural sector. The production of

milk is increased almost 3.2% in year 2013 and 2014 as compared to the production of last year.

The demand of milk is increasing day by day especially in urban cities such as Islamabad,

Faisalabad, Karachi, Lahore etc. Pakistan is the third largest milk producing country on the globe

as it is producing 42.4 million tons during year 20114 and 2015.But current milk sector is facing

numerous challenges.

Most of the milk market in Pakistan depend on conventional methods that are being used

for centuries. The thing is these methods are old and with the pollution nowadays it is impossible

to provide pure and healthy milk in current era. But now people are aware of this dilemma and

many are investing and opening up purpose built dairy farms which are both hygienically clean

and profitable.

Cost of logistics is usually generated by transportation of goods from one pace to another.

It can be solved either by using maximum capacity of fleet or scheduling route on proper grounds.

The better planning of route can reduce the cost in more effective manner. There are number of
problems associated with transportation. Sometime product is not ready to deliver while vehicle is

ready to go, sometime vehicle needs maintenance and product is ready to deliver.

There different problems related to transportation and many solutions are found using

transportation model The authors have studied milk collection points and observed that curdling

was one of the main problems. The model was deterministic in nature. Constraints were set like

Length of the trip that was fixed to 50km, Milk will be picked in a single visit from each center,

Time is dependent on seasonal variations, working hours were fixed, portion of cost is fixed

associated with transportation, diary should be able to implement proposed solution on their

microcomputers. CARS approach was used to find out a solution which is cost effective and

feasible at the same time. In 2001, it was analyzed that food items are perishable in nature and

milk collection routing problem is the most complex problem. Due to its perishable nature, it must

be transported within minimum time span to maintain its nutrients and better shelf life. They have

developed Heterogeneous Fixed Fleet Vehicle Routing Problem (HFFVRP) technique to formulate

a model.

In 2005, authors point out that milk collection is a complex and challenging logistic

problem. As in 1970, cost of labor and energy was increased which have ultimate impact on

transportation cost. In this scenario, operational research has gained interest to reduce cost and

provide effective and efficient routing plan. They have developed software to match real world

problems expressed in terms of operational research techniques. They declared that DSS is the

most appropriate approach to support scheduler.

Another paper has indicated the effect of transportation on organization and the system.

Transportation system consist of infrastructure, equipment and people who are operating and

managing. People are engaged with each other in different activities from collection towards
distribution of milk. All activities are greatly effecting transportation system in terms of time and

cost respectively. Management has responsibility to provide pattern for the movement and the

direct cost for performing these activities. In order to choose one of the best model for solution

of milk or any other transportation problem, we should keep in mind that:

 One should have clear idea of transportation links and their relationship with each other.

 Different kinds of vehicles used for transportation and passed by roads.

 Network of road

 Traffic flow

 Difference in expected transportation costs.

 Difference of time, cost and demand for individual area and their relationship.

 Demand variation

 Distribution pattern

In conclusion Diary Sector plays vital role in economy of country as well as its demand is

increasing day by day. A huge cost is associated with transportation system to transport milk

effectively and efficiently. For this reason, it is important to look upon factors which constitute

major of this cost. All the models and studies have been done on the basis of deterministic model

mostly, Reduction of cost, time, and distance to give a proper routing plan for specific industry in

necessary but there is a need to study probabilistic factor (traffic) too and the way it effects and

reduce quality of milk, shelf life and safety. In real life scenarios, situations are mostly probabilistic

and the models are deterministic. There are very few or negligible companies in Pakistan who are

using concepts of operational research for improving their systems. There is a need to optimize

systems and add to country’s economy.