Transport Planning: Linear Programming and the Transport Model

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Transport Planning: Linear Programming and the Transport Model Executive Summary This report aims to analyse the current transport planning procedures of a clothing company that sells T-Shirts and compare them to a linear programming transport model with the aim of minimizing total transport costs. A linear programming model was chosen due to the additional information that can be derived through sensitivity analysis. The model used gave an optimal solution where total transport costs were Php32, 250 compared to the current manual procedure giving a total transport cost of Php38, 900. This suggested savings of 17% in total transport costs were possible, given the historical data collected, simply through switching to a linear programming model for transport planning. Firstly, the report discusses why a linear programming model was chosen for comparison as opposed to other models. Background to the Company is provided as well as the historical data used. Supply and demand figures for each of the company’s factories and stores are provided along with unit transport costs between all nodes. Following the step by step development of the model used, results are analysed and suggestions for improvements are presented. The model clearly shows it is the preferred method for transport planning and also suggests there may be additional improvements possible through increases in capacity at specific factories. Table of Contents Executive Summary 2 Table of Contents 3 List of Figures 4 Introduction 5 Research Objective 5 Linear Programming & Transport Planning 5 Transport Planning at the Company 7 Developing a Linear Programming Model 10 Mathematical Model 12 Optimal Solution & Comparison 12 Suggestions for Improvement 15 Conclusion 16 References

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