Posted in Operations and Supply Chain Terms, Total Reads: 675
As the name implies transportation refers to the movement of good/people from one place to another. The topic gains significance in understanding and analyzing the cost implications and resource allocation.
To serve this purpose, in the field of operations research transportation models are employed in analyzing an existing transportation system and modifying it so that the resources are used optimally at minimum cost.
To implement this model, the following information is required:
(i) Number of Supply points from where the product is transported
(ii) Number of Destination points to where the product is transported
(iii) Cost per unit of the product to be transported (or) Distance between the supply & destination points
It is basically a mapping of the supply & demand points and then finding out the most effective way in order to meet the demand at destination. While working out on this model, certain assumptions are made like there is only one path from one point to another, the cost per unit remains same and the products are all of same type.
After mapping the points & cost/distances, the problem is solved by using Linear Programming method. This method gives the optimum number of products that needs to be transported from one point to another in such a way that the demand is met and also the cost is kept minimum.