In today’s highly competitive and demanding environment, the pressure on both public and private organizations is to achieve a better way to deliver values to end customers. There has been a growing recognition that the two goals, cost reduction and customer service are achieved through Logistics and Supply Chain Management (SCM). Transportation of goods continues an important part of in-bound as well as outbound logistics of Supply Chain Management (SCM). Efficient distribution of goods and services is of great importance in today’s competitive market, because transportation constitutes a considerable portion of the purchase price of most products or services. Vehicle routing is considered as an important resource in a distribution logistics management system. Effective plan and control of vehicle operation can significantly reduce the cost of physical distribution system. To overcome the challenges of changing environment, the scheme of vehicle control of a physical distribution system should be dynamic. Thus India has become the top milk producing country in the world. This study addresses the vehicle routing aspect of distribution logistics in Sangam dairy supply chain of Guntur district in Andhra Pradesh. The problem is viewed as Vehicle Routing Problem with Backhauls (VRPB) and a mathematical model is developed with the consideration of various practical constraints. Moreover, a decision support system is developed for dynamic VRPB, which would help the manager in making operational and tactical decisions.
