Application of Linear Programming to Minimize Transportation Cost in Nigeria Breweries Plc, Ibadan, Oyo State, Nigeria

Abstract

This research paper work analyzed the transportation cost of Nigeria Breweries Plc, Ibadan in Oyo State in relation to the units of its products demanded at the various deports and the capacity of the factories. Five origins which are Ibadan, Osogbo, Ikeja, Oyo and Ondo as well as twelve destinations (warehouses): Gbagi, Dugbe, Oje, Ikorodu, Mowe, Ife, Ilesa, Iseyin, Ogbomosho, Owode, Akure and Ore were examined. The data also include the requirements at each destination and capacity at each source. The costs represent the average transportation cost from June to December 2019. Initial feasible solution was obtained for the secondary data collected by using North-West corner Method, and Vogel Approximation Method. The result of the analysis showed that the allocations of Vogel Approximation Method will give the optimal transportation cost of the company and is recommended to the company for reduction in transportation with a minimum transportation cost of ₦1,168,431.