Transportation
Problems in
Business
What is a Transportation
Problem?
The Transportation Problem (TP) is a special case of Linear Programming.
Objective:
– Minimize transportation cost while meeting demand and supply.
Used widely in logistics, supply chain, and distribution planning.
– Ensures lowest logistics cost.
– Improves service levels & delivery times.
– Reduces fuel and route inefficiencies.
– Aligns with sustainability goals.
Transportation Problem Description
Transportation Problem Description
Transportation Problem Description
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Transportation Problem: Mathematical Formulation
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Flipkart / Amazon India - Fulfillment Assignment
• Fulfillment Centers → Metro & Tier-2 Cities.
• Constraints: Warehouse stock, city demand, delivery SLAs.
• TP Solution: Assigns shipments to closest FC at minimal cost.
• Impact: Faster deliveries & reduced shipping cost.
Reliance Retail - Fresh Produce Supply
• Farms & Mandis → Reliance Fresh Outlets.
• Constraints: Daily perishability, transport time, demand fluctuations.
• TP Solution: Allocate produce to outlets based on proximity & demand.
• Impact: Fresher produce, reduced spoilage, lower costs.
JSW Cement - Plant to Market Allocation
• Cement plants in South & West India → Markets nationwide.
• Constraints: Plant capacity, market demand, freight charges.
• TP Solution: Assigns plants to serve nearest markets at lowest cost.
• Impact: Competitive pricing and higher market share.
Benefits of Solving the
Transportation Problem Optimally
Minimizes total transportation cost.
Improves resource utilization and reduces empty runs.
Enhances timeliness and service levels.
Supports sustainability and lower carbon footprint.
IRduetransportation cost
cost penaltycost
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