Optimization of transport

Optimization of transport used for transportation link planning and cost reduction. Is used mainly by companies whose business requires to transport large quantities of products such as cereals, coal, sand and cement. Optimizing of transport is also known under the term "transportation problem".

Stages of the classical transportation algorithm

• determination of the initial basic solution by using the selected method, for example:
  • method of the Northwest angle,
  • method of the minimum element of a row or column of a cost matrix,
  • method of the minimum element of the cost matrix.
• using the method of potentials it is necessary to check which solution is optimal. For this purpose it is necessary to use a measure of optimality: o = (ui + vj) – cij = 0, where cij= ui + vj
• in the case when the solution that we got is not optimal, it is necessary to find another solution.

Elements of the transportation problem

• The supply of providers - the supply of providers is understood the number of suppliers m with am products.
• Consumer demand - the needs of buyers understood as the number of customers n, which the company intends to provide the bn products.
• The matrix of transportation cost - kij, where i = (1,...,m) and j = (1,...,n), i.e. cost of transporting the product from the i-th supplier to the j-th recipient.
• The traffic matrix - xij, where i = (1,...,m) and j = (1,...,n), i.e. quantity of products transported from the i-th supplier to the j-th recipient.

Types of transportation problems

• closed - occurs when supply of providers equals the demand, if there is the following relationship ai = bj
• open - occurs when supply of providers does not equal customer demand, i.e. when there is the following relationship:
  • ai > aj, this means that the supply of providers is greater than the needs of consumers.
  • ai < aj, this means that the supply of providers is lower than the needs.

Form of classical transportation algorithm for closed transportation problems.

Limiting conditions for suppliers:

xij = ai where xij is transport matrix

Limiting conditions for recipients:

xij=bj

ai = bj

cij xij –> min

Optimization of transport connections in logistics

The optimization of transport links from the point of view of logistics management should be understood as all efforts for the smooth flow of goods from the manufacturer to the individual customer. Companies are part of the "pipeline" or chain. The chain is formed by both suppliers, companies and customers.

Supply chain management aims to save costs and / or improved customer service. The objective of supply chain management is to give the company the best position in the global market and keeping it in spite of ongoing changes in customer needs and competition.

To optimize the transport using logistics supply chain, company should pay attention to all segments and links in chain sequence:

• Transport
• Storage - including: inventory management and warehousing.
• Packaging - affects the mean of transport used.
• Manipulation of materials
• Performance - time from an order by the customer until the delivery of goods ordered. We can distinguish following elements:
  • Order adoption
  • Order development
  • Preparation of goods
  • Delivery (transportation).

Examples of Optimization of transport

• Vehicle Routing: Companies use optimization of transport to determine the most efficient routes for their delivery vehicles. This involves analyzing the delivery locations, the time of day, traffic conditions, and the capacities of the vehicles. This optimization can help reduce costs by ensuring that vehicles are running as efficiently as possible.
• Fleet Management: Companies use optimization of transport to manage their fleet of vehicles, including optimizing fleet size, determining the most cost-effective maintenance schedules, and scheduling routes for the most efficient delivery of goods.
• Logistics Network Design: Companies use optimization of transport to design their logistics networks, including optimizing the placement of warehouses and distribution centers, determining the most efficient routes between locations, and optimizing the inventory levels at each location.
• Load Optimization: Companies use optimization of transport to determine the most efficient way to load their vehicles. This involves analyzing the size and weight of each item, the type of vehicle, and the layout of the vehicle to ensure that the most efficient loading pattern is used.

Advantages of Optimization of transport

Optimization of transport is a process that helps companies reduce their transportation costs by improving the efficiency of their transportation links. It is a powerful tool that can help companies maximize their profits and minimize their costs. Here are some of the advantages of optimizing transport:

• Improved transportation efficiency: Optimization of transport helps identify the most efficient routes to ship goods. This can result in shorter transit times, fewer delays, and lower costs for companies.
• Reduced fuel costs: Optimization of transport can help companies identify the most fuel-efficient routes, resulting in lower fuel costs.
• Improved customer service: By optimizing their transportation links, companies can ensure that their customers receive their goods on time, which can improve customer satisfaction.
• Improved logistics: Optimizing transport can help companies better manage their supply chain and logistics, resulting in improved efficiency and cost savings.
• Reduced emissions: By optimizing their transportation routes, companies can reduce their carbon emissions, helping them meet their sustainability goals.

Limitations of Optimization of transport

Optimization of transport is a useful tool for companies whose business requires the transportation of large quantities of products. However, there are certain limitations to this approach that must be taken into consideration when implementing a transportation problem:

• Time and cost constraints: Optimization of transport can be a time-consuming process, with the costs involved depending on the size, complexity, and route of the transportation problem.
• Data accuracy: The success of the optimization of transport depends on the accuracy of the data that is used as input, such as the distances between different points, the cost of transportation, and other factors.
• Potential conflicts between parties: When optimization of transport involves multiple parties, there may be potential conflicts between them that can affect the efficiency of the transportation problem.
• Unforeseen events: Unexpected events, such as inclement weather, may cause delays or other disruptions that can affect the optimization of transport.
• Limited transport options: Depending on the type of transportation problem, the number of available transport options may be limited, making it difficult to find the most cost-effective and efficient solution.

Other approaches related to Optimization of transport

The following are other approaches to Optimization of transport:

• Route Optimization: The aim of route optimization is to reduce the costs associated with transportation by selecting the most efficient route to take. It involves the selection of the best route, considering the time and cost of each option.
• Fleet Optimization: Fleet optimization is the process of optimizing the utilization of an organization's fleet. It involves the selection of the most efficient and cost-effective vehicles and drivers, as well as the optimization of the routes taken by the vehicles.
• Load Consolidation: Load consolidation is the process of combining multiple shipments into one shipment, thus reducing the number of trips needed to deliver the goods and thus reducing the overall cost.
• Mode Optimization: Mode optimization is the process of choosing the most efficient mode of transport for a particular shipment, such as air, rail, or truck. It involves the selection of the most cost-effective and efficient mode, taking into account factors such as time, cost, and reliability.

In conclusion, Optimization of transport is an important process to reduce transportation costs. It involves the selection of the most efficient routes, vehicles, drivers, and modes of transport. By optimizing these elements, organizations can save money and increase efficiency.

Optimization of transport — recommended articles

Distribution logistics subsystem — Optimum size of the order — Material stream — Added value (logistics) — Coordinative function of logistics — Logistics — Dependent demand — Logistic process — Production logistics subsystem

References

• Aneja, Y. P., & Nair, K. P. (1979). Bicriteria transportation problem. Management Science, 25(1), 73-78.
• Danila, B., Yu, Y., Marsh, J. A., & Bassler, K. E. (2006). Optimal transport on complex networks. Physical Review E, 74(4), 046106.
• Ford Jr, L. R., & Fulkerson, D. R. (1956). Solving the transportation problem. Management Science, 3(1), 24-32.
• Gleyzal, A. (1955). An algorithm for solving the transportation problem. Journal of Research of the National Bureau of Standards, 54(4), 213-216.
• Munkres, J. (1957). Algorithms for the assignment and transportation problems. Journal of the Society for Industrial and Applied Mathematics, 5(1), 32-38.
• Scellato, S., Fortuna, L., Frasca, M., Gómez-Gardeñes, J., & Latora, V. (2010). Traffic optimization in transport networks based on local routing. The European Physical Journal B, 73(2), 303-308.