Transshipment Problem in Supply Chainsystem (Case Study: Juaben Oil Mills Ltd)
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Date
2011-10-05
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Abstract
Transportation is the physical distribution of resources from one place to the other, to meet a specific set of requirements. It is easy to express a transportation problem mathematically in terms of an LP model, which can be solved by the Simplex Method. Since transportation problem involves a large number of variables and constraints, it takes a very long time to solve it by simple Simplex Method. Simplex algorithms can be specialized to solve several linear programming models that arise from Network flow problems.
The transshipment problem is an extension of the framework of transportation problem in which intermediate nodes, referred to as transshipment nodes are added to account for locations such as warehouses. We will show that any given transshipment problem can be converted into an equivalent transportation problem. Hence our procedure for solving the latter problems can be applied to the solution of transshipment problems as well.
The transshipment problem is concerned with the allocating and routing flow from supply centers to destination centers via intermediate points. In addition to transshipment flow, supply centers generates a surplus that must be distributed and each destination generates a given deficit. Intermediate points (transshipment nodes) neither generate nor absorb flow. The total supply must equal the total demand, so dummy nodes should be added appropriately. No connection may have a capacity, and all costs should be nonnegative. This defines a transshipment problem. The problem of interest is to determine an optimal transportation scheme that minimizes the total cost of shipments, subject to supply and demand constraints.
The research presented in this paper applies the Quantitative method to reveal and analyse transshipment problems in manufacturing industries using data collected from Juaben Oil Mills Limited
The main objective of this research is to minimize the cost of transporting goods from origins to destinations in a manufacturing industry.
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A Thesis submitted to the Department of Mathematics
Institute of Distance Learning
Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Science (Industrial Mathematics)