n Journal of Emerging Trends in Engineering and Applied Sciences - The application of transportation algorithm with volume discount on distribution cost (A case study of Port Harcourt flour mills Company Ltd.)

Volume 4, Issue 2
  • ISSN : 2141-7016
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Until recently, heavy trucks could load up to any capacity without limit. These trucks normally exceed the average loading capacity of the truck. This was partially due to high transportation cost. Drivers and transport owners together with transport users had to find a way of compensating for the high cost of transport by increasing the truck load so as to maximize profit. This had ripple effect on the state as a whole: increased road accidents, destruction of roads and longer time being spent on the road before getting to destination. There is also the effect of increased cost of goods thereby increasing inflation. This drives the attention of the government to find a lasting solution to the problems. The government therefore went into agreement with transport owners to determine maximum loading capacity of trucks. The purpose of this paper is to find out whether giving discounts on transportation charges could minimize total transportation cost thereby increasing total revenue of both producers and retailers. This study is focused on the Application of Transportation Algorithm with volume Discount on distribution cost using Portharcourt flour mills company plc. This paper is intended to determine the quantity of Golden Penny Flour (in 50kg bags), Golden Penny Semovita (in 10kg bags) and Wheat Offals (also in 50kg bags) that porthacourt flour mills company should distribute in a month in order to minimize transportation cost and maximize profit. A problem of this nature was identified as a Nonlinear Transportation Problem (NTP), formulated in mathematical terms and solved by the KKT optimality condition for the NTP. Thus, analysis revealed the following allocations: 10000 bags of Golden Penny Flour should be supplied to Aba, 7000 of the same product should be supplied to Bayelsa. Allocate 2000 bags of Wheat Offals to Aba, and 9000 bags of the same product to Enugu. Finally, allocate 4000 bags of Golden Penny Semovita to Enugu and 11000 bags of the same product to Onitsha. Hence, the total minimum transportation cost for the above distribution is 394,000.

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