*Corresponding author. Tel.: +66 832 8112 Email address: somsakkp@hotmail.com doi: 10.14456/kkuenj.2016.82 KKU ENGINEERING JOURNAL 2016;43(S1):103-107 Research Article KKU Engineering Journal https://www.tci-thaijo.org/index.php/kkuenj/index A solution approach for solving the location routing problem of the central rubber market Somsak Kaewploy* and Sombat Sindhuchao Department of Industrial Engineering, Faculty of Engineering, Ubon Ratchathani University, Ubon Ratchathani 34190, Thailand. Received April 2016 Accepted June 2016 Abstract At present, the central rubber market system is still inefficient, especially when it comes to aspects of the difficulty of transportation for certain rubber sellers moving their wares to the central rubber market, because their plantations are far from the central market, and in addition, rubber selling prices are unfair. Therefore, the researchers have designed an algorithm by applying Tabu Search to find the solution to solving location selection problems of rubber purchasing depots replacing the central rubber market and managing vehicle routes from it to the rubber purchasing depot, where the owner must be a member of the Office of Rubber Replanting Aid Fund (ORRAF) or of the Rubber Plantation Fund Cooperative. The capacity of the purchasing location is divided into three types, small size (10 tons), medium size (25 tons) and large size (50 tons), with truck capacities of two sizes, namely, 20 tons maximum and 25.5 tons maximum. The testing results found that the selection of appropriate purchasing depots and the management of appropriate vehicle routes consist of establishing purchasing depots at seven points, along with vehicle capacity of less than 25 tons, leading to a minimum cost of 58,110.58 baht/day. Keywords: Tabu search, Central rubber market, Location routing problem, Office of Rubber Replanting Aid Fund (ORRAF) 1. Introduction The country’s rubber market is considered to be inefficient with no system, and it has not been accepted by any organization due to the characteristics of the market as buyer owner, causing the farmers, the main producers of the country, to be in trouble about the unfair rubber prices, low standard rubber quality and the rubber weight not being the actual weight. These things affect the profession and income of rubber farmers directly. In the first operation period of the central rubber market, the sellers did not need to deliver all the rubber to the central market but just sent some samples to the market so that buyers could offer the auction price according to the quality of the sample rubber. The central market is a rubber collection source with different qualities or grades of rubber sent from the sellers and are a bargaining point. After that, each vendor will deliver the rubber to the winning bidder. Such an approach is not succeful and does not benefit either buyers or sellers because when the seller has delivered the rubber to the buyer, there are often conflicting problems about rubber weight and quality. To solve these problems, the sellers must transport all the rubber to the central market and the rubber should be bought through the auction from buyers, but this method also has a problem due to different rubber prices; even though, in fact, whole rubber is of the same quality [1-3]. Facing these problems, the market service system has been improved and it is found that for a good central market system, the seller must deliver all rubber to the central market which will carry out services for all rubber procedures starting from grading, weighing, auctioning and payment, and including delivering the rubber to the buyer [3]. Another problem is that each vendor needs to deliver the whole amount of raw rubber to the central rubber market by himself. The locations of certain vendors are far from the central market and some vendors sometimes need to have a lot of rubber transported to the market, such as more than one truck load per day. These problems make transportation costs increase. Therefore, to have good management, purchasing depots are built to make the transportation distance shorter than distances from farmers’ locations to the rubber market. This helps the rubber farmers or agriculturalists to have an opportunity to sell their products at good prices and also make the delivery costs decrease [4-6]. These are other ways to help the farmers according to policies of the central markets and the government as well [2]. With the importance of the problems mentioned above, this research focuses on solving the location selection problem efficiently and the solving of vehicle routing problems between the purchasing depot and the central rubber market [7-10] under the regulations and various constraints by good planning to reduce the sophisticated routes. Besides, it can also be applied to solve other forms of vehicle routing problems. Previously, this problem was very