Solving Transshipment Problem in Glove Manufacturing Under the FSC Standard

Abstract

This study proposes a mathematical transshipment model to optimize transportation in glove manufacturing by Forest Stewardship Council (FSC) standards. The objective is to minimize total transportation costs across a multi-tiered network comprising rubber farmers, small-scale intermediary traders, large-scale intermediary traders, a concentrated latex factory, and a rubber glove factory. Unlike conventional transshipment models, this approach explicitly distinguishes parallel product flows from FSC-certified and non-FSC-certified sources, reflecting segregation requirements mandated by FSC standards. This dual-flow structure introduces unique routing constraints and decision variables that are rarely addressed in the existing literature. The model incorporates real-world constraints related to supply availability, demand fulfillment, and transportation capacity, based on empirical data from a representative case study. The optimization problem was solved using LINGO software. The case study involved 250 farmers (125 non-FSC-certified and 125 FSC-certified), 125 small-scale intermediary traders, 6 large-scale intermediary traders, a concentrated latex factory, and a rubber glove factory producing approximately 50% FSC-certified and 50% non-FSC-certified gloves. This separation is critical for ensuring FSC compliance and achieving precise cost optimization. Before implementation, transportation costs totaled 82,228 baht per million gloves produced. Upon applying the model, costs decreased to 75,503.33 baht per million gloves, indicating a reduction of 6,724.67 baht or approximately 8.18%. These results affirm the effectiveness of mathematical modeling in reducing logistics costs within sustainable supply chains and offer a framework adaptable to other industries with similarly structured supply chains.