Cost minimisation of product transhipment for physical distribution management

Abstract

The objective of this study was to determine the optimal allocation of shipments (least cost) of two manufactured products between depots and places of consumption. In this study, the least-cost method was used in solving the transportation algorithm using Tora 2.0 version software. The study was necessary because of the high operating costs associated with physical distribution when deliveries are not properly planned and considered with reference to alternative strategies. In contrast, significant savings can be achieved by using techniques available for determining the cheapest methods of transporting goods from several origins to several destinations. Cost minimisation is a very useful approach to the solution of transportation problems.