Monday, June 23, 2014

Minimizing Cost in Transportation using Linear Transportation Method


Feel free to download my pdf for full reading =)


The following solution was used to demonstrate the formulation of the transportation model. LPG is process and stored in Petronas refinery in three different places—Malacca refinery, Klang Port, and Kertih Port. These refineries supply three different zone in peninsular Malaysia. North Zone (Perlis, Penang, Kedah, Kelantan & Terengganu), Center Zone (Perak, Sekangor, Kuala Lumpur & Pahang),  South Zone (Malacca, Negeri Sembilan & Johor Bahru). LPG is shipped to the customer in road cars, using lorry tanker each of which is capable of holding ten ton of LPG. Each grain refinery is able to supply the following number of ton of LPG to the customer on a daily basis:

                        Petronas Refinery                 Supply
1.      Malacca refinery                175
2.      Klang Port                         275
3.      Kertih Port                        350
-----
800 tons

Figure 4.1 : Petronas Refinery supply of LPG on daily basis


Each zone demands the following number of tons of LPG per day.

                            Zone                                    Demand
1.      North                                 200
2.      Center                               300
3.      South                                 300
----
800 tons

Figure 4.2 : LPG demand per day


The cost of transporting ten tons of LPG from each refinery (source) to each zone (destination) differs according to the distance and type of road used. These costs are shown in the Table 4.1. For example, the cost of shipping ten tons of LPG from the Klang Port to the North Zone is RM1300





Table 4.1 : Cost for shipment of 10 tons LPG from refinery to peninsular zone in Malaysia.

ZONE
REFINERY
North
Center
South
Malacca
RM 1300
800
900
Klang Port
1100
900
1200
Kertih Port
600
1600
2000


*To make an easy calculation, we change the data into a single digit :
**Note : real cost for each tons =  cost x

Table 4.2 : Adjusted cost for shipment from refinery to zone in peninsular Malaysia.

ZONE
REFINERY
A.    North
B.     Center
C.     South
1.      Malacca
 13
8
9
2.      Klang Port
11
9
12
3.      Kertih Port
6
16
20


The problem is to determine how many tons of LPG to transport from each refinery to each zone on daily basis in order to minimize the total cost of transportation. The linear programming model for this problem is formulated in the equations that follow:


..........................download Minimizing Cost in Transportation using Linear Transportation Method pdf for full reading......................



4.3       DISCUSSION



In this model the decision variables, , represent the number of tons of LPG transported from each refinery, i (where i = 1,2,3 ),to each zone, j (where j = A, B, C). The objective function represents the total transportation cost for each route. Each term in the objective function reflects the cost of the tonnage transported for one route. For example, if 20 tons are transported from refinery 1 to zone A, the cost of 13 is multiplied by 20 which equals RM260. (Real cost = 260x10 = RM2600). The first three constraints in the linear programming model represent the supply at each refinery; the last three constraints represent the demand at each zone. 

..........................download Minimizing Cost in Transportation using Linear Transportation Method pdf for full reading......................