Independent Journal of Management & Production Licensed under a Creative Commons Attribution 3.0 United States License 746 DELIVERY AND PICK-UP PROBLEM TRANSPORTATION -MILK RUN OR CONVENTIONAL SYSTEMS

ABSTRACT This paper examines the role of inventory and transportation in the supply system of parts adopted by most of the Brazilian automotive companies to feed their assembly lines. It is a system for programmed collection of pieces called Milk Run that aims, within a window of time, to collect parts from suppliers, fulfilling established routes in order to minimize the cost of transport operations and reducing inventory in the supply chain. Milk Run, a scheduled collection system of parts can be carried out by automotive industry itself: the automaker manage the best route for its collector vehicle, determining the quantity of parts required to collect at each supplier within a given route, aiming to best utilize the capacity of the vehicle. Another way to work within the Milk Run system is the automaker to find the best routing and determines the amount of parts needed to be collected from each supplier on each trip. The collection, however, is held by a third carrier. As a third way of working, the assembler can determine the quantity of parts to collect and when it will require them. A logistics carrier determines the best routing for the collection of pieces in order to meet the production plan so that there is not a lack of parts or components on the assembly line, which would lead to a stop. In this case, the logistics carrier transports parts on its own fleet of vehicles or transfer the transport operation to a carrier