Application Of Linear Programming in the Minimization of Transportation Cost in Dangote Cement, Port Harcourt

Abstract:

This study delved into the optimization of transportation expenses for Dangote Cement in Port Harcourt, Rivers State. It aligned the quantities of products required by national distributors with the supply available from their depots, employing linear programming techniques to achieve cost minimization. Three sources (depots) - Onne, Rumuodumaya and Trans Amadi as well as six destinations (national distributors) - Aluu, Bori, Elelewon, Omagwa, Oyibo and Rumuola were examined. The secondary data was obtained from a field survey and it contained the unit cost (in Naira) of transporting the products per bag from their various sources to various destinations as at October, 2023. Also, the data obtained from Dangote Cement National Consumer Promotion 2020 (Redemption Centres Detail) contained the list of eleven national distributors in Port Harcourt; however, only six of the national distributors were used in this research. Initial feasible solutions for the secondary data collected were determined through the application of the North-West Corner Method, the Least Cost Method, and the Vogel Approximation Method resulting in values of ₦452,000, ₦380,750, and ₦370,500, respectively. Upon analyzing the outcomes, it was established that the allocation strategy proposed by the Vogel Approximation Method is the most advantageous for optimizing the company's transportation costs. As such, it is recommended to the company as it offers the potential to reduce transportation expenses to a minimum of ₦370,500.