Abstract
Logistic cost and product availability are major issue in low value commodity industries such as wheat. Logistic cost and product availability affected by shipment planning and storage capacity. In this paper the effect of various factors on total costs and service level of a distribution system are investigated. The objective of this paper is to find alternative ways to reduce the logistic cost while still maintaining an acceptable service level. This research develops a simulation model of wheat transportation and distribution using ships in a large flour company. The system consists of silos at the plant, three depot and one plant. Several scenarios are developed, each factors are evaluated in terms of shipment costs and service level. Based on the simulation result, factor 2 appear to have the most substantial impacts on both total costs and service level. This paper brings an important recommendation to the company as well as insight for maritime logistics in general. Cost is a very important competitive factor for bulk items like wheat, and thus the proposed scenarios could be implemented by the company for increase the service level and decrease the distribution cost.
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