Utilization of Transportation Model for Profit Maximization for Strategic Cement Sdn Bhd
This project is entitled' Utilization of Transportation Model for profit maximization for Strategic Cement Sdn Bhd '. Transportation Model in this project is one class of linear programming which is one of the decision tool for solving problem in management science. The transportation m...
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| Format: | Project Paper Report |
| Language: | English English |
| Published: |
1997
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/7906/ http://psasir.upm.edu.my/id/eprint/7906/1/GSM_1997_22_A.pdf |
| Summary: | This project is entitled' Utilization of Transportation Model for profit maximization for
Strategic Cement Sdn Bhd '.
Transportation Model in this project is one class of linear programming which is one of
the decision tool for solving problem in management science. The transportation model
utilized in this project is based _on the modelling developed by Anderson et. af. . The
objective of this project is to determine the optimum delivery schedule of cement from
two plants of Strategic Cement Sdn Bhd to fulfill the demand of twenty three different
locations/destinations in Peninsular Malaysia. The factors involved in determining the
profit maximization of the company are cement selling price to the various destinations,
production cost, paper bag cost, stevedoring cost, commission to distributors and
transportation cost.
The result generated by the Model shows that the optimum distribution pattern is
following the profit or revenue maximum pattern i.e. delivery of cement to the maximum
profit contribution areas. The trade-off in the Transportation Model is the unsatisfied or
unfulfilled demand area or market share which will in tum affect customer satisfaction
level. The current practice by Strategic Cement Sdn Bhd reveals that company is
supplying to certain demand location/destination despite with lower profit margin as
compared to the empirical result generated/guided by the Transportation Model. This is
mainly attributed to the fact that in the real business world, other factors shall be taking
into consideration besides profits , such as customer service, market share and long term
business relationship.The sensitivity analysis reveals that 1% change of the variables and demand has direct
effect on the profit margin and transportation schedule for the company. Management of
Strategic Cement Sdn Bhd can therefore utilizes this information to control cost and
delivery schedule to achieve higher profit margin. |
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