Transportation Problem for a Beverage Firm in Kumasi, Ghana

Abstract

This paper seeks to find the optimal transportation cost of a beverage firm in Kumasi-Ashanti Region, Ghana, using POM-QM for Windows 4 (Software for Quantitative Methods, Production and Operation Management by Howard J. Weiss) with Vogel’s Approximation Method (VAM) as the initial method. An administered questionnaire was used for data collection from the firm.  The results of the analysis revealed that, optimal transportation cost of the beverage firm is GH?3, 174635.00 if it transports 769785, 615410 and 1014805 numbers of cases of bottles with drinks from Plant 1 to Accra, Tamale and Kumasi respectively. Again, if they transport 667887, 698463, and 633650 numbers of cases of bottles with drinks to Accra, Techiman and Sunyani from Plant 2, and also from Plant 3, with 11273 and 988727 number of cases of bottles with drinks to Accra and Koforidua respectively.

The company’s transportation cost will reduce from GH?3,209,897.86 to GH?3, 174635.00 if it transports beverage (in cases) from the sources to the various destinations as in the optimal tableau (, Appendix 1, Table 3). It is believed that if the beverage firm applies this mathematical model then, it can save as much as GH?35262.86 equivalent to US$ 11,020.00 which could be used in other areas of the firm to boost production.

Keywords: Transportation, Beverage firm, Optimal Tableau, Production, Optimal transportation cost.