The optimal production-transportation problem of Latex Foam Ghana Ltd.

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Manufacturing firms are tasked to produce to meet market demand at a minimum cost. Production and transportation are the major components of total cost to such firms. Coordinating production and distribution functions of such firms is seen as a step towards cost optimization. Latex Foam Ghana. Ltd. was incorporated in March, 1969 to produce quality foam products for the bedding and furniture Industry. In this thesis, we assume that the customers' monthly demand for high density mattress as well as the monthly production capacities of each plant is known. We consider the problem of finding an optimal monthly production program for each plant as well as the optimal monthly transportation of products to customers for which the sum of the production and transportation costs is minimized. We solve the production and transportation planning problems sequentially each by the transportation model for the available data from Latex Foam Ghana Ltd for the 2012 operation year. As a result we get a complete solution consisting of production and transportation plans. The study revealed that with the introduction this model, management could reduce production and transportation cost by 43% and 38% respectively. The model is useful for annual budget planning and financial planning. The proposed model solution has demonstrated improvement in cost optimization as compared to the rule-of-thumb based planning.
A thesis submitted to the Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fufillment of the requirement for the degree of M.Phil Applied Mathematics