An Operations Research Approach to Transportation Cost Minimization

Transportation is an important component of supply chain and logistics management because the movement of goods from suppliers to destinations directly affects total operating cost.The Transportation Problem (TP) is a classical Operations Research model used to determine the optimal allocation of goods from several sources to several destinations while satisfying supply and demand constraints at minimum transportation cost.This paper presents an Operations Research approach to transportation cost minimization using mathematical modeling and standard optimization techniques.The proposed approach includes the North-West Corner Method, Least Cost Method, Vogel's Approximation Method (VAM), and the Modified Distribution Method (MODI).A numerical transportation problem is formulated and solved to demonstrate the methodology.The results show that an appropriate optimization procedure can reduce transportation cost and provide an efficient allocation plan.The study demonstrates the practical usefulness of transportation models for logistics, distribution, supply-chain management, and resource allocation.