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APPLICATION OF LINEAR PROGRAMMING TECHNIQUES IN MINIMIZING

COST OF TRANSPORTATION A CASE STUDY OF COCA COLA BOTLING
COMPANY DUTSE, JIGAWA STATE

Article · January 2015

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 Suleiman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125
APPLICATION OF LINEAR PROGRAMMING TECHNIQUES IN MINIMIZING COST OF
TRANSPORTATION A CASE STUDY OF COCA COLA BOTLING COMPANY DUTSE
JIGAWA STATE
Suleiman K1, , Aliyu A. Aliyu2, Cecillia .I3 Ibrahim Yusuf4 Bashir Yusuf5 and Habiba
Awwal6
Department of Mathematics Federal University, Dutse1,2,3,5
Department of Mathematical Sciences Bayero University, Kano4
Department of Mathematics Hussaini Adamu Federal Polytechnic Kazaure Jigawa State6
Abstract
The transportation model of distributing Coca-cola drinks from distributors to sales
outlets was considered, the data gathered were modeled as a linear programming model
of the transportation type and presented the transportation problem as tableau in which
the initial basic feasible solutions were obtained using the North-west corner method and
the least cost method with results as N5525 and N4525 respectively. The model was
solved for optimality using the stepping-sttone method and was verified using LINGO
software package. Based on our findings, it was discovered that the results from both
linear programming model and that of LINGO computer package yielded the same value.
Keywords: Minimizing, Maximizing, Transportation and Model
1.0 INTRODUCTION either minimizing the cost of shipping m
The transportation problem is primarily units to n destinations or maximizing the
concerned with the optimal way in which a profit of shipping m units to n destinations,
product produced at different factories or e.g. see Hammer (1969), Koopman (1947),
plant (called origins) can be transported to a Sharma and Swarup (1978) etc..
number of warehouses or customers (called The transportation problem was first
destinations) Consider m origin points, where formulated by Hitchcock (1941), and was
origin i has a supply of Si units of a particular independently treated by Koopmans and
item(Commodity). In addition, there are n Kantorovich. In fact Monge (1781) formulated
destination points, where destination j it and solve it by geometrical means. Dantzig
requires dj units of the commodity. We and Ramser (1951).gave the standard linear
assume that S;, dj >0. Associated with each programming formulation of transportation
link (i, j), from origin i to destination j, there problem and applied the simplex method to
is a unit cost Cij for transportation. The solve it. Since then the transportation
problem is to determine a feasible “Shipping problem has become the classical common
pattern” from origins to destinations that subject in almost every textbook on
minimizes the total transportation cost. This operation research and mathematical
problem is known as the transportation programming.
problem. The objective in a transportation Hammer (1969) introduced the time-
problem is to fully satisfy the destination minimizing transportation problem, and the
requirements within the operating algorithms for solving the problem. Rather
production capacity constraints at the than minimizing cost, the objective is to
minimum possible cost. Whenever there is a minimize the maximum time to transport all
physical movements of goods from the point supply to the destinations.
of production to the final consumers through Sharma and Swarup (1978) and Bhalia et al.
a variety of channels of distribution (1975) have given iterative methods for the
(wholesalers, retailers, distributor etc), solution of time-minimizing transportation
there is a need to minimize the cost of problem.
transportation so as to increase profit on Taghrid and Hassan (2009). considered a
sales. Transportation is a particular class of problem of preparing a minimum cost
linear programming, which is associated with transportation plan by simultaneously solving
day-to-day activities in our real life and following two sub-problems: Firstly, the
mainly deals with logistics. It helps in solving assignment of units available at a series of
problems on distribution and transportation origins to satisfy demand at a series of
of resources from one place to another. The destinations. Secondly, the design of vehicle
two common objectives of such problems are
114
 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015
tours to transport these units, when the
vehicles have to be brought back to their
departure point. The cost minimization
mathematical model was constructed, which
is converted into a relaxation total distance
minimization. Finally, decompose to network
problems, a full vehicle problem and an
empty vehicle problem. The problems were
solved by tour construction and improvement
procedures. This approach allows large
problems to be solved quickly, and solutions
to large problems to be solved quickly, and
solutions to large test problems have been
shown to be one percent or two percent from
the optimum.
Equi et al. (1996) modelled a combined
transportation and scheduling in one problem
where a product such as sugar cane, timber
or mineral ore is transported from multi
origin supply points to multi destination
demand points or transhipment points using
carriers that can be ships, trains or trucks.
They defined a trip as a full-loaded vehicle
travel from one origin to one destination.
They solved the model optimally using
Langrangean Decomposition, Since then these
problem have been studied extensively by
many authors and have found applications in
such diverse fields as Geometry, Fluid
Mechanics, Statistics, Economics, Shape
recognition, Inequalities and Meteorology.
The aim of every business set-up is to
optimize cost (to maximize profit or minimize
the cost of operation) while meeting certain
constraints. In the course of this research, we
will find an optimal transportation schedule
that will minimize the total cost required for
transporting the company’s product to its
customers.
The main aim of the paper is to determine
the optimal transportation schedule that will
minimize the total cost of distribution of
Coca-cola drinks from three distributors in
Dutse to three sales outlets in Dutse, Jigawa
State with the following objectives:
1) To model the distribution of Coca-cola
drinks as a transportation problem
2) To minimize the transportation cost
needed to transport the drinks while
satisfying routing constraints to serve their
customers with the demand for the
commodity.
115
pp 114 - 125
2.0 MATERIALS AND METHODS
Data used in this project was collected by
means of interviews. The management of the
company were interviewed under the
following headings:
• Demand for Coca-cola drinks by
customers
• Number of bottle per crate
• Number of crates per truck
• Total cost of production and selling
price of a bottle of Coca-cola drink.
2.1 General formulation of a transportation
problem
Consider a general transportation problem
consisting of m origin points (O1, O2,…, Om ),
where origin i has a supply of Si units of a
particular items (commodity). In addition,
there are n destination points (Di, D2,…, Dn ),
where destination j requires dj units of the
commodity. Let the amount of commodity
available in ith source be ai (i=1,2,…,m) and
the demand in jth sink be bj (j=1,2…n). Let
the cost of transportation of unit amount
of material from i to j be Cij. Let the amount
of commodity supplied from i to j be denoted
as Xij . The cost of transporting Xij units of
commodity from i to j is Cij x Xij .
2.2 The Decision Variables
The variables in the Linear Programming (LP)
model of the TP will hold the values for the
number of units shipped from one source to a
destination.
The decision variables are: Xij = the size of
shipment from warehouse i to outlet j, where
i = 1, 2, 3, …, m and j = 1, 2, 3, …, n. This is
the set of m,n variables.
2.3 The Objective Function
The objective function contains cost
associated with each of the variables. It is a
minimization problem. Consider the shipment
from warehouse i to outlet j for any ii and j,
the transportation cost per unit Cij and the
size of the shipment is Xij. Since we assume
that the total cost function is linear, the
total cost of this shipment is given by Cij x Xij.
Summing over all ii and jj now yields the
overall transportation cost for all warehouse-
outlet combinations. That is, our objective
function is:
m n
Minimize ∑ ∑C ij X ij
i =1 j =1
 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

2.4 The Constraints But in real problems, these conditions may

The constraints are the conditions that force not be satisfied. Then the problem is said to
supply and demand needs to be satisfied. In a be unbalanced. However, the problem is
transportation problem, there is one modified by adding a fictitious (dummy)
constraint for each node. source or destination which will provide
Let ai denote a source capacity and bi denote surplus supply and demand respectively. The
destination needs transportation cost from this dummy source
i) The supply at each source must be to all destinations will be zero. Similarly, the
used: transportation costs from all sources to a
m dummy destination will be zero.
∑X ij = ai i = this mrestriction causes one of the
Thus,
i =1 constraints to be redundant. Thus the above
, problems have m x n decision variables and
(m+n-1) equality constraints.
ii) The demand at each destination must The non-negative constraint is expressed as
be met:
n

∑X ij = bj jX=ij ≥ 0 n ∀i = 1, 2,......m, j = 1, 2,...n

j =1
, (2.5)
iii) Non-negativity Where
X ij ≥ 0 ∀ i and j m= number of sources
n= number of destinations
The objective of minimizing the total cost of
si = number of units being received by
transportation is given as;
m n
source i
Z= ∑ dj = number of units being received (2.1)by
Minimize
i =1
∑C X
j =1
ij ij
destination j
ai = capacity of the source (in tons,
Generally in transportation problems, the Naira, liters, etc)
amount of commodity available in a bj = demand of the jth destination (in
particular source should be less than or tons, Naira, liters, etc.)
equal to the amount of commodity cij = cost per unit distribution from
supplied from that source. Thus, the source i to destination j (in N or as a
constraint is expressed as distance in kilometers, miles etc).
m xij = amount distributed from source i to
∑X ij ≤ Si ∀i = 1, 2,...m ; destination j (in tons, Naira, liters, etc)
i =1
(supply Constraint) 2.5 Problem Formulation
m n
(2.2)
Also the total amount supplied to Min Z =∑ ∑C ij X ij
i =1 j =1
particular sink should be greater than or
equal to the corresponding demand. Subject to
m
Hence
n ∑X ij ≤ Si ∀i = 1, 2,...m
∑X ij ≥ d j; ∀j = 1, 2,...n j =1

j =1 (supply constraints)
n
(Demand Constraints)
(2.3) ∑X ij ≥ dj ∀j = 1, 2..., n
i =1
The set of constraints given by equation (2.2)
and (2.3) are consistent only if total supply (demand constraints)
and total demand are equal, that is X ij ≥ 0 ∀i = 1, 2,......m, j = 1, 2,...n
m n

∑s = ∑d
i =1
i
j =1
j

(2.4) 116
 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

2.6 TRANSPORTATION TABLEAU
The transportation problem can be described
using linear programming mathematical
model and usually it appears in a
transportation tableau. The model of a
transportation problem can be represented in
a coincise tabular form with all the relevant
parameters.
The transportation tableau (A typical Tp is
represented in standard matrix form), where
supply availability at each source is shown in
the far right column and the destination
requirements are shown in the bottom row.
Each cell represents one route. The unit
shipping cost Cij is shown in the upper right
corner of the cell, the amount of shipped
material is shown in the center of the cell.
The transportation tableau implicitly
expresses the supply and demand constraints
and the shipping cost between each demand
and supply point.

Table 2.1: Parameter Table for the Transportation Problem

Cost per Unit Distributed Supply
Destination
1 2 --- N
Source 1 C11 C12 --- Cn S1
2 C21 C22 --- C2n S2
--- --- --- --- --- ---
M Cm1 Cm2 --- Cmn Sm
Demand d1 d2 --- dn

2.7 PROBLEM FORMULATION located in Zai Quaters, Yalwawa and Sabon

Coca-cola drinks supplied from three Takur.
different distributors in Dutse- SSD Hakimi Each distributor is able to supply the
street, SSD Mobile base and SSD Takur Adua. following number of crates of drinks to the
These distributors supply three sales outlets sales outlet on the month of June 2012.
Distributors Supply
SSD Hakimi Street 150
SSD Mobile Base 175
SSD Takur Adua 275
Total 600 Crates
Each outlets demands the following number of crates of Coca-cola drinks for the month of June
2012.
Sales Outlets Demand
Gida Dubu 200
Yalwawa 100
Sabon Takur 300
Total 600 Crates
The cost of transporting a crate of Coca-cola the distance. These costs are shown in the
drink from each distributor (Source) to each following table:
Sales outlet (destination) differs according to

Table 2.2
Distributors Sales outlets
Zai Yalwawa Sabon Takur
Quarters
SSD Hakimi Street 6 8 9
SSD Mobile Base 7 10 10
SSD Takur Adua 5 6 11

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 Suleman et al.
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The linear programming model for this problem can be formulated in the equation below;
Minimize Z = 6 X 11 + 8 X 12 + 9 X 13 + 7 X 21 + 10 X 22 + 10 X 23 + 5 X 31 + 6 X 32 + 11X 33
Subject to Supply constraints
X 11 + X 12 + X 13 ≤ 150
X 21 + X 22 + X 23 ≤ 175
X 31 + X 32 + X 33 ≤ 275
Demand Constraints
X 11 + X 21 + X 31 ≥ 200
X 12 + X 22 + X 32 ≥ 100
X 13 + X 23 + X 33 ≥ 300
X ij ≥ 0
where X ij represent the number of crates of Coca-cola drinks transported from each
distributor i (where i=1,2,3), to each sales outlet j (where j=1,2,3).
The objective function represents the total transportation cost for each route. The first three
constraints in the linear programming model represent the supply at each distributor, while the
last three constraints represent the demand at each outlet. The Coca-cola drinks
transportation model (tableau) is shown in the table below

Table 2.3: tableau for our Coca-cola drinks transportation model

To 1 2 3 Supply
From
1 6 8 9 150
2 175
7 10 10
3 275
5 6 11
Demand 200 100 300 600

2.8 FINDING INITIAL BASIC FEASIBLE SOLUTION OF A BALANCED TRANSPORTATION PROBLEM

Table 2.4 The Initial North-West Corner Solution
To 1 2 3 Supply
From
1 6 8 9 150
150
2 7 10 10 175
50 100 25
3 5 6 11 275
275
Demand 200 100 300 600

The transportation cost of this solution is computed by substituting the cell allocations
= N 5525
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 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125
2.8.1 The Least Cost Method
The initial allocation is made to the cell in
the tableau having the lowest cost which is
cell 31 as shown in the table below:
Table 2.5 The Initial Least Cell Cost Allocation
To 1 2 3 Supply
From
1 6 8 9 150

2 7 10 10 175

3 5 6 11 275
200
Demand 200 100 300 600

The next allocation is made to the cell that cell 32, which has a cost of N6 as shown
has the least cost and also is feasible. This is below
Table 2.6 The Second Least Cell Cost Allocation.
To 1 2 3 Supply
From
1 6 8 9 150

2 7 10 10 175

3 5 6 11 275
200
75
Demand 200 100 300 600
The third allocation is made to cell 12, which allocation of 175 crates is made to cell 23.
has the minimum cost of N8. The amount These allocations complete the initial least
allocated is 25crates. The fourth allocation of cell cost solution as shown in the table below:
125 crates is made to cell 13, and the last
Table 2.7 The Initial Solution
To 1 2 3 Supply
From
1 6 8 9 150
25 125
2 7 10 10 175
175
3 5 6 11 275
200
75
Demand 200 100 300 600

The transportation cost of this solution is computed by substituting the cell allocations,= N 4525

119
 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

2.8.2 FINDING THE OPTIMAL SOLUTION

In the paper the stepping-stone method was adopted to test for optimality.
Table 2.8
To 1 2 3 Supply
From
1 6 8 9 150
25 125
2 7 10 10 175
175

3 5 6 11 275
200
75
Demand 200 100 300 600

The basic solution principle in a Our first step in the stepping-stone method is
transportation problem is to determine to evaluate these empty cells to see whether
whether a transportation route not at present the use of any of them would reduce total
been used (ie., an empty cell) would result in cost. If such a route is found, then we
a lower total cost if it were used. Table 4.6 allocate as much as possible to it.
above shows four empty cells (11, 21, 22 and
33) representing unused routes.

Table 2.9:The Allocation of One Crate To Cell 11

To 1 2 3 Supply
From
1 +1 6 8 9 150
25 125
2 7 10 10 175
175
3
200 5 75 6 11 275
Demand 200 100 300 600

Table 2.10 The Subtraction of One Crate From Cell 12

To 1 2 3 Supply
From
+1 -1
1 6 8 9 150
25 125
2 175
7 10 10
175
3 275
200 5 6 11
75
Demand 200 100 300 600

99

120
 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

Table 2.11 The Addition of One Crate to Cell 32 and the Subtraction of One Crate From Cell
31
To 1 2 3 Supply
From
1 +1 6 -1 8 9 150
25 125
2 7 10 10 175
175
3 200 -1 5 6 11 275
+1 75

Demand 200 100 300 600

Table 2.12 The Stepping-Stone Path for Cell 21

To evaluate the cost reduction potential of an empty cell, a closed path connecting
used cells to the empty cell is identified.
To 1 2 3 Supply
From
1 6 8 + 9 150
-

2 + 7 10 - 10 175

3 5 6 11 275
- +
Demand 200 100 300 600

21 23 13 12 32 31
+ N7 - N 10+ N 9 – N 8 + N 6 – N 5 = - N1

Table 2.13: The Stepping-Stone Path for Cell 22

To 1 2 3 Supply
From
1 + 150
6 - 9
25 8 125
2 7 - 10 + 10 175
175
3 200 5 6 11 275
75
Demand 200 100 300 600

22 23 13 12
N10 + N 10- N 9 + N 8 = - N1

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 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

Table 2.14: The Stepping –Stone Path For Cell 33

To 1 2 3 Supply
From
1 6 + 8 9 150
- 125
25
2 7 10 10 175
175
3 200 5 6 11 275
- 75 +

Demand 200 100 300 600

33 13 12 32
+ N11 - N 9 + N 8 - N 6 = + N4

Table 2.15: The Stepping-Stone Path For Cell 11

After all empty cells are evaluated, the one with the greatest cost reduction potential is
the entering variable
A tie can be broken arbitrarily

To 1 2 3 Supply
From
1 6 8 9 150
+ - 125
25
2 7 10 10 175
175
3 - 5 + 6 11 275
200 75
Demand 200 100 300 600

Table 2.16:The Second Iteration of the Stepping-Stone Method

When reallocating Units to the entering variable (cell), the amount is the minimum amount
subtracted on the stepping-stone path.
At each iteration one variable enters and one leaves.
To 1 2 3 Supply
From
1 6 8 9 150
25 125
2 7 10 10 175
175
3 5 6 11 275
175 100

Demand 200 100 300 600

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Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

Table 2.17 :The Stepping-Stone path For Cell 21

Check to see if the solution is optimal
To 1 2 3 Supply
From
1 6 8 9 150
25 - + 125
2 7 10 10 175
+ - 175
3 5 6 11 275
175 10075
Demand 200 100 300 600

21 23 13 11
+ N7 - N 10 + N 9 - N 6 = N0

Table 2.18: The Stepping-Stone Path For Cell 12

To 1 2 3 Supply
From
1 6 8 9 150
- +

2 7 10 10 175

3 5 6 11 275
+ -

Demand 200 100 300 600

12 32 31 11
+ N8 - N 6 + N 5 - N 6 = +N1

Table 2.19 : The Stepping-Stone Path For Cell 22

Continuing check for optimality
To 1 2 3 Supply
From
1 - 6 8 + 9 150
25 125
2 7 + 10 - 10 175
175
3 5 6 11 275
175 + - 100

Demand 200 100 300 600

22 32 31 11 13
+ N10 - N 6 + N 5 - N 6 + N 9 - N 10 = +N 2

123
 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

Table 2.20 : The Stepping-Stone Path for Cell 33

To 1 2 3 Supply
From
1 + 6 8 - 9 150
25 125
2 7 10 10 175
175
3 5 6 11 275
175 - +
100
Demand 200 100 300 600
33 31 11 13
+ N11 - N 5 + N 6 - N 9 = +N 3

The stepping-stone process is repeated until
none of the empty cells will reduce cost (i.e.,
an optimal solution). From above, evaluation
of four paths indicates no cost reductions;
therefore table 4.15 solution is optimal.
Solution and total minimum cost = N 4500
3.1 RESULTS AND DISCUSSION
The CBCN problem was solved with the linear
programming technique and the
transportation module of the LINGO software.
The result from both the linear programming
technique (Stepping-stone method) and that
of the LINGO software yielded the same value,
in term of the optimal solution obtained. The
computer solution shows the minimum total
transportation cost of N4500.
To minimize the total transportation cost the
management of CBCN Dutse distributors
should make the following shipments:
- Ship 25 crates of Coca-cola drink from DIST
SSD Hakimi Street to SALES OUTLET Zai
Quarters.
- Ship no crate of Coca-cola drink from DIST
SSD Hakimi Street to SALES OUTLET Yalwawa.
- Ship 125 crates of Coca-cola drink from DIST
SSD Hakimi Street to SALES OUTLET Sabon
Takur.
- Ship no crate of Coca-cola drink from DIST
SSD Mobile Base to Zai Quarters.
- Ship no crate of Coca-cola drink from DIST
SSD Mobile Base to Yalwawa.
- Ship 175 crates of Coca-cola drink from DIST
SSD Mobile Base to Sabon Takur.
- Ship 175 crates of Coca-cola drink from DIST
SSD Takur Adua to SALES OUTLET Zai
Quarters.
- Ship 100 crates of Coca-cola drink from SSD
Takur Adua to SALES OUTLET Yalwawa.
- Ship no crate of Coca-cola drink from SSD
Takur Adua to SALES OUTLET Sabon Takur.

Table 4.20 Transportation Output

DISTRIBUTOR SALESOUTLET COST VALUE (N) REDUCED COST
VALUE (N)
Distributor 1 Sales outlet 1 6.00 0.00
Distributor 1 Sales outlet 2 8.00 0.00
Distributor 1 Sales outlet 3 9.00 0.00
Distributor 2 Sales outlet 1 7.00 0.00
Distributor 2 Sales outlet 2 10.00 0.00
Distributor 2 Sales outlet 3 10.00 0.00
Distributor 3 Sales outlet 1 5.00 0.00
Distributor 3 Sales outlet 2 6.00 0.00
Distributor 3 Sales outlet 3 11.00 0.00

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 Suleman et al.
Dutse Journal of Pure and Applied Sciences 1(2) December 2015 pp 114 - 125

Table 4.21 Shipment Output

DISTRIBUTOR SALESOUTLET SHIPMENT REDUCED COST VALUE (N)
(CRATES)

Distributor 1 Sales outlet 1 25 0.00

Distributor 1 Sales outlet 2 0 1.00
Distributor 1 Sales outlet 3 125 0.00
Distributor 2 Sales outlet 1 0 0.00
Distributor 2 Sales outlet 2 0 2.00
Distributor 2 Sales outlet 3 175 0.00
Distributor 3 Sales outlet 1 175 0.00
Distributor 3 Sales outlet 2 100 0.00
Distributor 3 Sales outlet 3 0 3.00

The techniques of the linear programming
and LINGO computer software was used to
verify the total cost of transporting Coca-cola
drinks from three distributors to three sales
outlets in Dutse Jigawa State.
The steeping-stone method and the LINGO
software used, gives the same values, in term
of the optimal solutions obtained. Through
the Transportation Model the (CBCN) can
efficiently plan its transportation schedule,
so that it can not only minimize the cost of
transporting goods and services but also
create time utility by reaching the goods and
services at the right place and right time.
This intends will enable them to meet the
corporate objective such as education fund,
entertainment and other support they
offered to people of Nigeria. The study
recorded total minimization of transportation
cost during the periods of 1st June 2012-30th
June 2012 financial period. The value for the
decision variable produced the optimal
amounts to be ship to each Dutse sales outlet
of Coca-cola bottling company of Nigeria Plc.

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