Track: Operations Research

Abstract

Transportation plays a vital role in logistics which is an inseparable part of today’s supply chain management. An effective transportation network can optimize the supply chain to a great extent by reducing total cost, total time as well as maximizing profit. In this paper, we deal with one stage (supplier to manufacturer) multimodal fixed cost transportation problem (FCTP) of a local paper mill. Here we have formulated three different models which are road transportation model, rail transportation model and a combination of road and rail transportation models using linear programming to analyze and select the most optimized one for the case. For solving the case, we collected data for keeping the capacity constraints of each source and the demand constraints for each destination. We have used an excel solver to solve the models and the results show that the Rail route is the most cost-effective, but it leaves some of the demands unfulfilled. But the combination of both road and rail routes provide the most cost-effective solution satisfying the demands of the destinations. Henceforth, we compared the results by conducting cost analysis to select the most optimized one for the organization.