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Supply Chain Management Optimization Problem

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The International Journal Of Engineering And Science (IJES)
|| Volume || 3 || Issue || 6 || Pages || 01-09 || 2014 ||
ISSN (e): 2319 – 1813 ISSN (p): 2319 – 1805

Supply Chain Management Optimization Problem

Engr. Dr. Uzorh,A.C1and Nnanna Innocent 2
1
Department of Mechanical Engineering,
FederalUniversity of Technology Owerri, Imo State, Nigeria
AkanuIbiam Federal Polytechnic Unwana, Ebonyi State Nigeria

--------------------------------------------------ABSTRACT --------------------------------------------------------
Supply chain management SCM has becoming a topic of critical importance for both companies and
researchers today. Supply chain optimization problems considered are formulated as linear programming
problems with costs of transportation that arise in several real-life applications. This work develops linear
programming method for solving the cost-related problems. The proposed method attempts to minimize the total
transportation costs with reference to available resources (trucks and manpower) at the plants, as well as at
each depot. Sensitivity Analysis SA was employed to investigate how a change in the model data changes the
optimal solution. An industrial case is used to demonstrate the feasibility of the applying LP method to a real
transportation problem.However, the research finding shows that 39.20% of the company total expenditure
under transportation sector for six years was on maintenance alone, while 20.50%, 8.79% and 5.05% was on
Fuel, drivers welfare and loading/offloading respectively.This study would assist the top management in
ascertaining how many units of a particular product should be transported from plant to each depot to that the
total prevailing demand for the company’s product is satisfied, while at the same time the total transportation
costs are minimized.This study will enable companies to take advantage of this opportunity to improve on their
supply chain.The objective of this paper was twofold: (1) To determine the best transportation schedule that
minimizes the total transportation costs with supply and demand limits and (2) To identify a research area for
future research in this area. More specifically, this paper reviewed the major decision areas in supply chain
management and identified areas for future research consideration that will facilitate the advancement of
knowledge and practice in the area of supply chain optimization.Based on the existing body of research in
supply chain management, suggestions were made for future research in the following three areas: (1)
Evaluation and development of supply chain performance measures, (2) development of a model that can
integrate the four major decision areas in supply chain management. (3) Consideration of issues affecting
supply chain modeling.

KEY WORDS: Supply chain management, Transportation model, Linearprogramming, Sensitivity analysis.
--------------------------------------------------------------------------------------------------------------------------------------
Date of Submission: 27 May 2014 Date of Publication: 10 June 2014
----------------------------------------------------------------------------------------------------------------------------- ---------

I. INTRODUCTION
Supply chain management is a field of growing interest for both companies and researchers. As nicely
told in the recent book by Tayur, Ganeshan, and Magazine (1999) every field has a golden age: This is the time
of supply chain management. Supply chain management (SCM) definition varies from one enterprise to another.
We define a supply chain (SC) as an integrated process where different business entities such as suppliers,
manufacturers, distributors, and retailers work together to plan, coordinate, and control the flow of materials,
parts, and finished goods from suppliers to customers. This chain is concerned with two distinct flows: a
forward flow of materials and a backward flow of information. Geunes J.B, and Chang, B., (2002) have edited a
book that provides a recent review on SCM models and applications.As mentioned above, a supply chain is an
integrated manufacturing process wherein raw materials are converted into final products, then delivered to
customers. At its highest level, a supply chain is comprised of two basic, integrated processes: (1) the
Production Planning and Inventory Control Process, and (2) the Distribution and Logistics Process.These
Processes, illustrated below in Figure 1, provide the basic framework for the conversion and movement of raw
materials into final products.

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 Supply Chain Management Optimization…

Suppliers
Distribution Center

Manufacturing Storage Transport Retailer

Facility FacilityVehicle

Production Planning Distribution and Logistics

and Inventory Control
Figure1. The Supply Chain Process

The Production Planning and Inventory Control Process encompasses the manufacturing and storage
sub-processes, and their interface(s). More specifically, production planning describes the design and
management of the entire manufacturing process (including raw material scheduling and acquisition,
manufacturing process design and scheduling, and material handling design and control). Inventory control
describes the design and management of the storage policies and procedures for raw materials, work-in-process
inventories, and usually, final products.The Distribution and Logistics Processdetermines how products are
retrieved and transported from the warehouse to retailers. These products may be transported to retailers
directly, or may first be moved to distribution facilities, which, in turn, transport products to retailers. This
process includes the management of inventory retrieval, transportation, and final product delivery, (Arntzen et
al, 1995).
These processes interact with one another to produce an integrated supply chain. The design and management of
these processes determine the extent to which the supply chain works as a unit to meet required performance
objectives.
There are four major decision areas in Supply Chain Management:
(1) Location (2) Production (3) Inventory (4) Transportation (distribution) and there are both strategic and
operational elements in each of these decision areas (Ganeshan and Terry, 1995).
The following describes each of the decisions:

Location
Location decisions depend on market demands and determination of customer satisfaction. Strategic
decisions must focus on the placement of production plants, distribution and stocking facilities, and placing
them in prime locations to the market served. Once customer markets are determined, long-term commitment
must be made to locate production and stocking facilities as close to the consumer as is practical. In industries
where components are lightweight and market driven, facilities should be located close to the end-user. In
heavier industries, careful consideration must be made to determine where plants should be located so as to be
close to the raw material source. Decisions concerning location should also take into consideration tax and tariff
issues, especially in inter-state and worldwide distribution.

Production
Strategic decisions regarding production focus on what customers want and the market demands. This
first stage in developing supply chain agility takes into consideration what and how many products to produce,
and what, if any, parts or components should be produced at which plants or outsourced to capable suppliers.
These strategic decisions regarding production must also focus on capacity, quality and volume of goods,
keeping in mind that customer demand and satisfaction must be met. Operational decisions, on the other hand,
focus on scheduling workloads, maintenance of equipment and meeting immediate client/market demands,
(Dantzig and Thapa, 1997). Quality control and workload balancing are issues which need to be considered
when making these decisions.

Inventory
Further strategic decisions focus on inventory and how much product should be in-house. A delicate
balance exists between too much inventory, which can cost anywhere between 20 and 40 percent of their value,
and not enough inventory to meet market demands. This is a critical issue in effective supply chain
management. Operational inventory decisions revolved around optimal levels of stock at each location to ensure

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 Supply Chain Management Optimization…

customer satisfaction as the market demands fluctuate. Control policies must be looked at to determine correct
levels of supplies at order and reorder points. These levels are critical to the day to day operation of
organizations and to keep customer satisfaction levels high.

Transportation
Strategic transportation decisions are closely related to inventory decisions as well as meeting customer
demands. Using air transport obviously gets the product out quicker and to the customer expediently, but the
costs are high as opposed to shipping by boat or rail. Yet using sea or rail often time means having higher levels
of inventory in-house to meet quick demands by the customer. It is wise to keep in mind that since 30% of the
cost of a product is encompassed by transportation, using the correct transport mode is a critical strategic
decision. Above all, customer service levels must be met, and this often times determines the mode of transport
used. Often times this may be an operational decision, but strategically, an organization must have transport
modes in place to ensure a smooth distribution of goods.

1.2 SCOPE AND LIMITATION OF THE STUDY

In this study Coca Cola Company at south-east and south-south geopolitical zone of Nigeria was our area of
interest.
This study would be limited to the use of linear programming technique (Transportation model) and TORA
software to produce optimal or nearly optimal of the problem.

1.3 STATEMENT OF PROBLEM

Transportation models are primarily concerned with the optimal way in which a product produced at
different plants can be transported to number of depots or warehouses. The objective in a transportation model is
to fully satisfy the destination requirements within the operating production at capacity constraints at minimum
possible cost. Whenever there is a physical movement of goods from the point of manufacture to the final
consumers through a variety of channels of distribution (wholesalers, retailers, distributors etc.), there is need to
minimize the cost of transportation (such as maintenance cost, personnel cost, fuel cost, and loading/offloading
cost) so as to increase the profit on sales.Coca Cola Company has four major plants and five major depots in the
southern part of Nigeria. Considering a transportation problem faced by this company for six years. This
problem involves the transportation of a truckload of their products from the four plants to the five depots at a
minimal transportation cost. Production capacities of the Plants are adequate to satisfy their customers, but with
limited available of number trucks.This work tends to develop new optimization tool that can minimized
transportation costs. This will enable companies to take advantage of this opportunity to improve on their supply
chain.

TRANSPORTATION MODEL
In 1941 Hitchcock first developed the transportation model. Dantzig (1963) then uses the simplex
method on the transportation problem as the primal simplex transportation method. The modified distribution
method is useful in finding the optimal solution for the transportation problem.Transportation models are
primarily concerned with the optimal way in which a product produced at different plants can be transported to
number of depots or warehouses. The objective in a transportation model is to fully satisfy the destination
requirements within the operating production at capacity constraints at minimum possible cost. Whenever there
is a physical movement of goods from the point of manufacture to the final consumers through a variety of
channels of distribution (wholesalers, retailers, distributors etc.), there is need to minimize the cost of
transportation (such as maintenance cost, personnel cost, fuel cost, and loading/offloading cost) so as to increase
the profit on sales. Transportation problems arise in all such cases. It aims at providing assistance to top
management in ascertaining how many units of a particular product should be transported from plant to each
depot to that the total prevailing demand for the company’s product is satisfied, while at the same time the total
transportation costs are minimized (Hamdy, 2008).
Transportation model generally deal with get the minimum cost plan to transport a product from a source (Plant)
(m), to number of destination (Depot) (n).

II. RESEARCH METHODOLOGY

A questionnaire related to SCM optimization in the Coca Cola Company were designed, to identify
views of Supply Chain Mangers about the transportation cost problem in Supply Chain Management.

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 Supply Chain Management Optimization…

2.1 DATA COLLECTION

The model provides a systematic tool to identify the relevant information required to answer the question: how
transportation cost can be minimized.
The data was acquired after an extensive search that involved personal and telephonic interviews with experts in
the area.
In the model it is possible to specify many depots and years in business as required in transporting the products.
For the purpose of this research, five depots and six years (2003 to 2008) in business were selected to give a
diverse range of characteristics. Table 4 shows the yearly transportation costs per truckload from the plant to the
depots. These costs are based on mileage, maintenance, fuel, driver’s welfare, and loading/Offloading rates.

2.2 TRANSPORTATION PROBLEM ILLUSTRATIVE EXAMPLE

Coca Cola Company was our area of interest. Coca Cola Company has four major plants and five major depots
in Nigeria. Considering a transportation problem faced by this company for six years. This problem involves the
transportation of a truckload of their products from the four plants to the five depots at a minimal transportation
cost. Production capacities of the Plants are adequate to satisfy their customers, but with limited available of
number trucks. Table 1 shows the average number of truckloads/month per Plant.
Table 1: Average number of truckloads/month per Plant

Plant Ave. number of truckloads/month per plant (Supply)

Aba 16
Owerri 16
Port Harcourt 16
Enugu 16

Table 2 shows the five depots and average number of truckloads/month (demand) per depot.

Table 2: The five depots and average number of truckloads/month (demand) per depot

Depot Average truckloads/month per depot (Demand)

Mbaise 4
Orlu 7
Umuahia 16
Calabar 18
Uyo 18

Table 3 shows the average distance from each plant to each depot.
Table 3: Average distance from Plants to Depots

Distance to depot (miles)

Plant Mbaise Orlu Umuahia Calabar Uyo
Aba 39 58 32 77 96
Owerri 32 30 39 96 116
Enugu 77 96 58 116 135
Port Harcourt 52 64 39 77 96

The average transportation cost is N50.00 per mile for both loaded and empty trucks. The Plant Supply chain
Managers estimated the number of truckloads of the products coming off each plant monthly. The depots
Managers have estimated the number of truckloads of the products their depot need each month. Table 4 shows
round trip transportation costs per truckload.

Table 4: Round-trip transportation costs per truckload

Transportation cost (Nm) per truckload per depot

Plant Mbaise Orlu Umuahia Calabar Uyo
Aba 0.2808 0.4176 0.2304 0.5544 0.6912
Owerri 0.2304 0.216 0.2808 0.6912 0.8352
Enugu 0.5544 0.6912 0.4176 0.8352 0.9720
Port Harcourt 0.3744 0.4608 0.2808 0.5544 0.6912

*(39miles x 2) x (12months x 6years) x (N50 per mile) = N0.2808million

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 Supply Chain Management Optimization…

Table 5 shows the four Costs element of transportation costs per truckload per plant of the company.
Table 5: Costs element of transportation costs per truckload per plant

Cost Element of Transportation cost (Nm) per truckload per plant

Plant Maintenance Fuel Personnel Loading/off loading
Aba 1.173 0.5867 0.2933 0.1467
Owerri 1.227 0.6133 0.3067 0.1533
Enugu 1.867 0.9333 0.4667 0.2333
Port Harcourt 1.280 0.6400 0.3200 0.1600

Table 6 shows the summary of the transportation problem

Table 6: Transporting costs, truckloads available and truckloads demanded

Transportation cost (Nm) per truckload per depot

Plant Mbaise Orlu Umuahia Calabar Uyo Ave. available
truckloads/plant
Aba 0.2808 0.4176 0.2304 0.5544 0.6912 1152
Owerri 0.2304 0.2160 0.2808 0.6912 0.8352 1152
Enugu 0.5544 0.6912 0.4176 0.8352 0.9720 1152
Port Harcourt 0.3744 0.4608 0.2808 0.5544 0.6912 1152
Depot demand (truckloads) 288 504 1152 1296 1296

*(12months x 16 x 6years) = 1152truckloads (supply)

*(12months x 4 x 6years) = 288truckloads (demand)
As can be seen from table 4 and 5, there are some differences in transportation costs because of difference in the
number of truckloads per depot and distances from plants to depots. This suggests that the realized sample may
be considered acceptable representation of the transportation problem in Supply Chain Management.
Management would like to determine how many of its trucks should be used to transport its product from each
plant to each depot based on the number of trucks available.
Figure 2 shows the network representation of the problem.

DEPOTS

PLANT Mbaise 288

1152 Aba

1152Owerri Orlu 504

Umuahia1152
1152 Enugu

Calabar1296
1152Port Harcourt

Supplies
Uyo1296
Distribution route

Demand
Figure 2: Network representation of the problem.

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 Supply Chain Management Optimization…

III. ANALYSIS OF THE SURVEY DATA

The data obtained from the survey were analyzed using one approach Operation Research (OR). The
OR approach involves the use of the tools of linear programming to model the problem.
The general problem of LP is the search for the optimal minimum of a linear function of variables constrained
by linear relations (equations or inequalities).
Considering the company’spresent situation, the objective is to determine the number of truckload to be
transported via each depot that provides the minimum total transportation cost. The cost for each truckload
transported to each depot is given in table 4.
Solving this transportation problem with linear programming model, we use double-subscripted decision
variables, with:
X11 = Number of truckload transportation from plant 1 (Aba Plant) to depot 1 (Mabise)
X12 = Number of truckload transportation from plant 1 (Aba Plant) to depot 2 (Orlu)
X13 = Number of truckload transportation from plant 1 (Aba Plant) to depot 3 (Umuahia)
X14 = Number of truckload transportation from plant 1 (Aba Plant) to depot 4 (Calabar)
X15 = Number of truckload transportation from plant 1 (Aba Plant) to depot 5 (Uyo)
X21 = Number of truckload transportation from plant 2 (Owerri Plant) to depot 1
X22 = Number of truckload transportation from plant 2 (Owerri Plant) to depot 2
X23 = Number of truckload transportation from plant 2 (Owerri Plant) to depot 3
X24 = Number of truckload transportation from plant 2 (Owerri Plant) to depot 4
X25 = Number of truckload transportation from plant 2 (Owerri Plant) to depot 5
X31 = Number of truckload transportation from plant 3 (Enugu Plant) to depot 1
X32 = Number of truckload transportation from plant 3 (Enugu Plant) to depot 2
X33 = Number of truckload transportation from plant 3 (Enugu Plant) to depot 3
X34 = Number of truckload transportation from plant 3 (Enugu Plant) to depot 4
X35 = Number of truckload transportation from plant 3 (Enugu Plant) to depot 5
X41 = Number of truckload transportation from plant 4 (Port Harcourt Plant) to depot 1
X42 = Number of truckload transportation from plant 4 (Port Harcourt Plant) to depot 2
X43 = Number of truckload transportation from plant 4 (Port Harcourt Plant) to depot 3
X44 = Number of truckload transportation from plant 4 (Port Harcourt Plant) to depot 4
X45 = Number of truckload transportation from plant 4 (Port Harcourt Plant) to depot 5

3.1 GENERAL LP FORMATION FOR TRANSPORTATION PROBLEM

The general transportation problem minimization model is:

Objective Function

Minimize Z = 𝑚 𝑛
𝑖=1 𝑗 =1 𝐶𝑖𝑗 𝑋𝑖𝑗 ……………………..…………………………………….... (1)
Subject to:
1. Constraints on total available truckloads at each plant
𝑛
𝑗 =1 𝑋𝑖𝑗 = Si for i = 1, 2,…m ……………………………………………...…….(2)
2. Constraints on total truckloads needed at each depot
𝑚
𝑖=1 𝑋𝑖𝑗 = Dj for j = 1, 2,….n. ……………………………………………….....(3)

And Xij≤ 0 for all i and j.

j = 1, 2, 3 ….n; i = 1, 2… m
Where
Z= objective function that minimized transportation costs (Nm)
Xj = choice variable (truckloads) for which the problem solved
Cj = coefficient measuring the contribution of the jth choice variable to the objective function.
Si and Dj = constraint or restrictions placed upon the problem.
The above problem can be solved using Software packages such as TORA and MS-Excel SOLVER, which
provide following LP information: (Hamdy, 2008)

1. Information about the objective function:

a. Objective function optimal value

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 Supply Chain Management Optimization…

b. Coefficient ranges (ranges of optimality). The range of optimality for each coefficient provides the range of
values over which the current solution will remain optimal. Managers should focus on those objective
coefficients that have a narrow range of optimality and coefficients near the endpoints of the range.
2. Information about the decision variables:
a. Their optimal values
b. Their reduced costs
3. Information about the constraints:
a. The amount of slack or surplus
b. The dual prices that represent the improvement in the value of the optimal solution per truck increase in
the right-hand side.
c. Right-hand side ranges (ranges of feasibility) that represent the range over which the dual price is
applicable. As the RHS increases, other constraints will become binding and limit the change in the value of
the objective function.

Sensitivity Analysis Rules

 For the objective function coefficients):
If 𝛿 𝐶𝑗 /ΔCj≥ 1, the optimal solution will not change
Where:
δCjis the actual increase (decrease) in the coefficient,
ΔCj is the minimum allowable increase (decrease) from the sensitivity analysis.

 For the RHS Constraints

If ∑δbj/Δbj ≥1, the optimal basis and number of truckloads monthly will not change
δbjis the actual increase (decrease) in the coefficient,
Δbj is the minimum allowable increase (decrease) from the sensitivity analysis.

3.2 FORMULATION OF TRANSPORTATION PROBLEM AS A LINEAR PROGRAMMING MODEL

The LP model and analysis exploit the structural advantages that accompany deterministic data and avoid
representing potentially costly errors. In reality, the decisions occur sequentially over time. From the Survey
data table 6:
The objective function can be represented as
Minimize Z = 0.2808X11 + 0.4176X12 + 0.2304X13 + 0.5544X14 + 0.6912X15
+ 0.2304X21 + 0.2160X22 + 0.2808X23 + 0.6912X24 + 0.8352X25
+ 0.5544X31 + 0.6912X32 + 0.4176X33 + 0.8352X34 + 0.9720X35 …………………………….(4)
+ 0.3744X41 + 0.4608X42 + 0.2808X43 + 0.5544X44 + 0.6912X45{i.e. cost of transporting from
coca cola plants to depots}
Subject to:
X11 + X12 + X13 + X14 + X15≤ 1080 Truckloads from Aba plant
X21 + X22 + X23 + X24 + X25≤ 1080 Truckloads from Owerri plant
X31 +X32 + X33 + X24 + X35≤ 1080 Truckloads from Enugu plant
X41 + X42 + X43+ X44+ X45≤ 1080 Truckloads from Port Harcourt plant
X11 + X21 + X31 + X41≥ 288 Truckloads to Mbaise depot
X12 + X22 + X32 + X42≥ 504 Truckloads to Orlu depot
X13 +X23 + X33 + X43 ≥ 1152 Truckloads to Umuahia depot
X14 + X24 + X34 + X44 ≥ 1296 Truckloads to Calabar depot
X15 + X25 +X35 +X45≥ 1296 Truckloads to Uyo depot
And X11, X12, ……X45all such values are ≥ 0

IV. RESULTS AND DISCUSSIONS

The results of the data obtained are discussed, summarized and presented in simplex tableaus formats as well as
in chart.
Solving the above transportation problem using TORA software package will result:
Minimum transportation cost Z = N2300.1408million. The amount (N2300.1408million) represents the minimum
monthly transportation costs for the company to transport its products from the four plants to the five depots.
From the computer result sheet, values in the Value column are assigning to our variables to determine the truck
schedules for the company.

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 Supply Chain Management Optimization…

Table 7: Company truck schedule

Plant Depot Truckload per month Cost per load Total cost
Aba Mbaise 0.0000 0.2808 0.0000
Aba Orlu 0.0000 0.4176 0.0000
Aba Umuahia 0.0000 0.2304 0.0000
Aba Calabar 1008.0000 0.5544 558.8352
Aba Uyo 144.0000 0.6912 99.5328
Owerri Mbaise 288.0000 0.2304 66.3552
Owerri Orlu 504.0000 0.2160 108.8640
Owerri Umuahia 72.0000 0.2808 20.2176
Owerri Calabar 288.0000 0.6912 199.0656
Owerri Uyo 0.0000 0.8352 0.0000
Enugu Mbaise 0.0000 0.5544 0.0000
Enugu Orlu 0.0000 0.6912 0.0000
Enugu Umuahia 1080.0000 0.4176 451.008
Enugu Calabar 0.0000 0/8352 0.0000
Enugu Uyo 0.0000 0.9720 0.0000
Port-Harcourt Mbaise 0.0000 0.3744 0.0000
Port-Harcourt Orlu 0.0000 0.4608 0.0000
Port-Harcourt Umuahia 0.0000 0.2808 0.0000
Port-Harcourt Calabar 0.0000 0.5544 0.0000
Port-Harcourt Uyo 1152 0.6912 796.2624
Total monthly transportation costs for the company N2300.1408

From the computer result sheet, variable X11, which is Aba Plant to Mbaise Depot, the value – Number of
truckloads per month is zero (see table 7), therefore, no truck movement from Aba Plant to Mbaise Depot.
For variable X14, which is Aba Plant to Calabar Depot, the Value is 1008truckloads per month.
For X15, which Aba Plant to Uyo Depot the monthly number of truckloads is 144, and so on.

4.1 SENSITIVITY ANALYSIS SA OF THE INPUT DATA

In linear programming input data of the model can change within certain limits without causing the
optimal solution to change. This is referred to as sensitivity analysis, (Taha 2008).
However, exactness of our LP model was confirmed by running sensitivity analysis. Through this the impact of
uncertainty on the quality of the optimal solution was ascertained.
Through SA, it is possible to change the corresponding coefficient in the objective function and resolve the LP
problem once more.These observations give rise to the investigation of the SA.
Knowing that the structure of the problem does not change, it is possible to investigate how changes in
individual data elements change the optimal solution as follows:

• If nothing else changes except the objective function value when slightly change, the number of truckloads,
transportation cost and the nature of the solution changes considerably.
• On the other hand, if the transportation cost is kept fixed, and the number of truckloads needed increase or
drop by e.g. 10% and there would be no major impact on the solution, Firm would still transport their
products and take the initial LP problem solution into consideration.

This result shows that maintenance, fuel, driver’s welfare, mileage, and loading/offloading costs have significant
effect on transportation costs. Given these constrains due consideration, transportation costs will be minimize.
Figure 3 represents the four costs element of transportation cost/month per plant for six years.
This shows that 39.20% of the Company total expenditure under transportation sector for six years was on
maintenance alone. While 20.79%, 8.79% and 5.05% was on fuel, driver’s welfare and loading/offloading
respectively.

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 Supply Chain Management Optimization…

FOUR COSTS ELEMENT OF TRANSPORTATION COST

2
1.8
1.6
1.4
1.2 Maintenance
Fuel
COST

1
Personnel
0.8 Loading/Off loading
0.6
0.4
0.2
0
1 2 3 4
PLANT

Figure 3: The four costs element of transportation cost/month per plant for six years

The solution recommends the reduction in cost of maintenance per truck. The results conclude that the optimal
decision is not to increase the number of truckloads per depot, but to reduce the cost of maintenance of trucks by
adopting predictive and preventive maintenance rather than corrective maintenance. It also recommends that the
issue of conventional wisdom (i.e. if it is not broke, then don’t fix it or that parts are expendable to some degree)
should be eliminated.

V. CONCLUSION
Managing data when constructing LP models can be challenging. The data used in LP models is often
clouded with uncertainty. A transportation problem was developed with respect to the operations of the Coca
Cola Company of Aba, Owerri, Port Harcourt and Enugu in its depots in Mbaise, Orlu, Umuahia, Calabar and
Uyo with respect to truckload movement between the cities. The data obtained in the study was used with
respect to the cities, an objective equation developed took this from: Z = 0.2808X 11 + ……. + 0.6912X45 (ie
cost of transportation from Coca Cola plants to depots). The problem was solved by using TORA software
package. The objective was determined, deduced, solved, and the minimum cost for the operation obtained.
An industrial case was used to demonstrate the feasibility of applying the LP method to real-world
transportation costs problem. Consequently, the LP and SA methods developed in this work yield an efficient
compromise solution and overall decision maker satisfaction.

REFERENCE
[1] Arntzen B.C, Brown G.G, Harrison T.P and Trafton L.L (1995), “Global supply chain management at Digital Equipment
Corporation”, Interfaces, vol.25, pp. 69-93
[2] Dantzig, G.B. and Thapa, M.N. (1997). Linear programming 1: Introduction. Springer-Verlag.
[3] Dantzig, G.B., (1963) Linear Programming and Extensions, PrincetonUniversity Press.
[4] Geunes J.B, and Chang, B., (2002) Operations Research models for Supply Chain Management and Design, Working paper,
University of Florida, Forthcoming in C.A. Floudas and P.M. Pardalos, editors, Encyclopedia of Optimization, Kluwer Academic
Publishers, Dordrecht, The Netherlands.
[5] Hamdy A. Taha (2008), Operations Research, An Introduction eight edition, Prentice – Hall, Inc. Upper Saddle River, New
JerseyU.S.A.
[6] Ganeshan, R. and Terry P.H., (1995), An Introduction to Supply Chain ManagementInterfaces, vol.1, pp. 2-3
[7] Tayur, S., Ganeshan, R. and Magazine M. (eds.), (1999) Quantitative models for supply chain management, 2nd ed., Kluwer
Academic Publishers, Boston.

www.theijes.com The IJES Page 9

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