Abstract
Sourcing involves alot of transportation activities and it is the role of the sourcing office to minimize the transportation cost. With such an objective, it is the necessity of the hour to compare and optimize the transportation costs from various sources to destinations. Optimization is a vast technique, which when applied diligently will have very serious benefits such as quality improvement and efficiency improvement in any process. By converting the real time transportation case into a Linear Programming problem of optimization, costs can be tremendously brought down. This article has discussed about the various techniques to minimize the transportation costs. Major methods such as North-West Corner Method, Least Cost Entry method, MODI method have been discussed. The sourcing office teams often use Microsoft Excel for their day-to-day sourcing activities. Hence an algorithm to apply these techniques with the aid of Microsoft Excel will be released in the upcoming episodes of the series.
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