Minimising the Transportation Cost of an Oil Mill Company

It is very common in Ghana to transport products from sources to destinations by road, which can be seen in multiple business entities whose daily activities include manufacturing. The manufacturing sites, storage and final destinations are sometimes linked by road. Finding methods to reduce the transportation costs has always been an issue and it continues to affect the decision-making process of several establishments. In this study, the cost of transporting raw materials of an Oil Mill Company from its various farm gates (sources) to its various warehouses (destinations) is minimised using the transportation problem. The initial feasible solution is generated using the Least Cost and the Vogel Approximation Method, after which the Modified Distribution Method is then applied to determine optimality. From the optimal solution, the cost of transporting the raw materials from the various farm gates to the factory warehouses was obtained to be GH 30351.45.