Applications of linear programming. : Case study,minimizing the costs of transportation problem

Abstract

This research work represents transportation modeling approaches and forecasting techniques addressing the transportation flow of cargo containers with semi-processed goods on the selected routes from a certain number of suppliers with various production capacities to the certain points of destination. The aim is to achieve the minimum cost of transportation flow and to forecast the future for the company’s activities. Since the cost minimization directly relates to the company’s profitability of which is representing operation efficiency that can be expressed as a fraction, respective transportation modeling methods can be solved using linear programming. The models were studied based on a real-life data and as example of transportation flow of containers of SMT transport and services Ltd, operating on Russian market was taken. Since the forecast of future activities can be also related to the company’s strategic planning. The forecasting problem was solved by one of the most common forecasting techniques used in business life, namely the trend adjusted forecast approach.