Optimizing Transportation Cost in Information Media Equipment Distribution: A Transportation Model Approach

Abstract

Organization X is an agency that distributes electronic products supporting broadcasting information systems for the community. There are 8 supply locations that will deliver goods to 21 destination points, with a total of 87,310 units. The large transportation demand and geographically dispersed delivery locations across Indonesia create challenges related to high transportation costs. To optimize the distribution plan, a Transportation Method analysis was conducted using Northwest Corner, Least Cost, and Vogel’s Approximation Method (VAM). POM-QM was used as a mathematical operations tool to verify and generate the optimal shipment allocation. The study objective is to minimize total transportation cost subject to supply and demand constraints. Previously, Organization X had planned distribution with a total transportation cost of IDR 2,859,935,100. Based on the optimization analysis, cost was reduced to IDR 2,707,472,000, resulting in cost savings of IDR 152,463,100, equivalent to a 5.33% reduction in transportation expenses. All three methods—Northwest Corner, Least Cost, and VAM—converged to the same optimal cost after MODI verification, confirming robustness of the solution. As a secondary observation, the optimized allocation also produced shorter estimated delivery times in several routes; however, this is noted as a favorable by-product and warrants further analysis in future studies.