STUDY OF TRANSPORTATION PROBLEM OF IRON AND STEEL INDUSTRY IN TURKEY BASED ON LINEAR PROGRAMMING, VAM AND MODI METHODS

Abstract

The subject of this study is the investigation of the minimization of the total transportation costs for finished product produced by Alter Iron and Steel Industry Company in its own production facilities in Karabuk. Firstly, the current situation in the Iron and Steel Industry in the world and Turkey are briefly discussed. In the second stage, the distribution to the demand point from the factory operating in the Iron and Steel Sector is considered as the basic problem. The demand points were determined as geographical regions. We have two targets: the total cost to be minimized and the total amount of goods to be sent from supply center to the demand centers to be equal to the total demand or supply amount. The optimum solution of the transportation model were solved both the traditional transportation model methods such as Vogels Approximation Method (VAM), Modified Distribution (MODI) method and the linear programming method. The optimal solution for last model was found using the R /SIMPLEX package program. Obtained results by different approachs are discussed. Critical aspect of this problem is to use the single source transportation model, where all demand amounts are met from a single production center.