DIRE DAWA UNIVERSITY

SCHOOL OF POST GRADUATE STUDIES

DEPARTEMENT OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT

OPERATION RESEARCH Assignment 1/Individual.

BY: Gizaw Magarsa.

ID No: DDU 1205942.

Submitted to: Instructor, Girmaye. A (PhD candidate).

Submission Date: 03, February 2021.

February: 2021

Dire Dawa: Ethiopia

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INTRODUCTION

T
ransportation problem is a particular class of linear programming, which is associated
with day-to-day activities in our real life and mainly deals with logistics. It helps in
solving problems on distribution and transportation of resources from one place to
another. The goods are transported from a set of sources (e.g., factory) to a set of destinations
(e.g., warehouse) to meet the specific requirements. In other words, transportation problems deal
with the transportation of a single product manufactured at different plants (supply origins) to a
number of different warehouses (demand destinations). The objective is to satisfy the demand at
destinations from the supply constraints at the minimum transportation cost possible. To achieve
this objective, we must know the quantity of available supplies and the quantities demanded. In
addition, we must also know the location, to find the cost of transporting one unit of commodity
from the place of origin to the destination. The model is useful for making strategic decisions
involved in selecting optimum transportation routes so as to allocate the production of various
plants to several warehouses or distribution centers.

Suppose there are more than one centers, called origins, from where the goods need to be
transported to more than one places called destinations and the costs of transporting or shipping
from each of the origin to each of the destination being different and known. The problem is to
transport the goods from various origins to different destinations in such a manner that the cost
of shipping or transportation is minimum.

Thus, the transportation problem is to transport various amounts of a single homogenous

commodity, which are initially stored at various origins, to different destinations in such a way
that the transportation cost is minimum.

The objective of the transportation model is to determine the amount to be shipped from each
source to each destination so as to maintain the supply and demand requirements at the lowest
transportation cost.

The transportation model can also be used in making location decisions. The model helps in
locating a new facility, a manufacturing plant or an office when two or more number of locations

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is under consideration. The total transportation cost, distribution cost or shipping cost and
production costs are to be minimized by applying the model.

Dangote Cement has inaugurated its US$480m integrated cement works in Ethiopia. The new
facility has a capacity of 2.5Mta and is located in West Shewa Zone, near Muger town of
Oromia Regional State, about 85km from the capital Addis Ababa. During the inauguration
ceremony, Aliko Dangote, owner of the Dangote Group, said: "The ease of investing in Ethiopia
proves the enduring political stability in the country and a favorable investment climate. It
provide social amenities and build infrastructure in our host communities in the Mugher area as
part of our policy of corporate social responsibility, Dangote added.

Dangote Cement is of the highest quality and comparable to any quality cement brand in the
world. Cement from Dangote’s modern factories is sold in 50 Kg bags, 1.5 tonne jumbo bags and
in bulk tankers. Stringent quality assurance processes are put in place so that customers can be
assured of receiving a high-quality product that meets all the required technical standards.
Dangote Cement plant has transformed Ethiopia’s construction capacity in the past half-decade,
delivering 2.5 million tonnes of high-quality building materials to the local market every year.

Economic diversification Described by the World Bank as arguably the greatest challenge facing
developing countries, small economies and landlocked nations that are primary commodity
dependent, it is crucial to achieving sustained, job intensive and inclusive growth, Dangote
Cement itself, Africa’s leading cement producer, was one such investor.

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