Determination of Optimal Distribution and Transportation Network

Abstract

Today, transportation network optimization has become one of the significant aspects of supply chain planning, and even a slight rise in productivity can significantly reduce costs of distribution of wood in the transportation network. In the forest based industry, given that transportation is the main cost of raw wood supply, using transportation planning, distribution should be done in a way so as to minimize the overall wood displacement. Such planning must meet the needs of all demand centers and the distribution supplier points must be used to their full capacity. Accordingly, the present study strived to find an optimal solution for transportation and distribution of raw wood from the main supplier points to small and large centers of wood and paper industries in Iran. This optimization simultaneously focuses on several products and is at the macroeconomic level of the country wood market. To achieve this goal, linear programming – Transportation Simplex Algorithm was used. The results show a significant fall in transportation costs and a more organized wood distribution network than the current situation. This cost reduction can be attributed to decisions about the optimal distribution of wood types, determining transport routes, and opting for the right type of truck supplier based on load tonnage and distance. This plummet in transportation costs plunges the cost of wood and wood products, which will surge competition in the business and will be of interest to manufacturers, distributors, customers and stakeholders in general.