Case Study On Transport Of Petroleum In Nigerian Cities

Abstract

Every company in today's time intends to maximize their profits. As we are in a fast-growing world, the need for products has increased drastically. Price of products depends on majorly two things, the cost of production (including transportation costs) and profit margins. Transportation problems are used to either minimize transportation cost or to maximize profits on shipping commodities. In this paper, we focus on how to minimize transportation cost while fulfilling the supply and demand conditions. The problem taken by us contain 3 sources and 3 destinations based in Nigeria and the Cost matrix was converted from Nigerian currency (Naira) to Dollars (conversion done according to rates on 15th October, 2022) for ease of calculation. Using Vogel's Approximation Method (VAM), Least Cost Method (LCM) and the North-West Corner Method (NWCM), we found that VAM was the most optimal. Self-written Python codes were used to verify the manual solutions. The unavailable or forbidden routes have also been considered in the code. The output displayed the allocations for the 3x3 matrix, and printed the total cost. After this, MS-Excel and Excel-QM software were used for verification. We found that VAM is 25.11 percent better than the LCM and 52.65 percent better than the NWCM for this problem. In every enterprise, generating higher revenue remains one of the most essential objectives. If codes for such methods are made universally available, enterprises would benefit highly. Use of transportation problems for optimal solutions have great potential, if one has knowledge about them.