COVER PAGE). TABLE of CONTENTS. EXECUTIVE SUMMANY 3. I.

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1(COVER PAGE)
2TABLE of CONTENTSEXECUTIVE SUMMANY.......................................................................................................................3I.INTRODUCTION.............................................................................................................................4II.PROBLEM STATEMENT...........................................................................................................4III.ANALYSIS & DISCUSSION........................................................................................................5a.ANALYSIS.....................................................................................................................................5b.DISCUSSION...............................................................................................................................13IV.CONCLUSION............................................................................................................................13V.REFERENCES................................................................................................................................15
3EXECUTIVE SUMMANYThe paper is about the future improvement plan that VietSteel’s transportation manager woulddeliver to support the company having an optimal transportation cost, which could contribute tothe company’s profitability. The issue here is the significant rising demand for steel products,and VietSteel must outsource their overloaded shipments. It is the manager’s task to balance thedemand and supply capacity between shipping points and destinations while still ensuremaximum profitability.The first section of the paper addresses briefly about VietSteel’s challenge. The second section,which is the highlight of the paper, is an analysis of steps on how to solve VietSteel’s challenge.There are two steps: step one is to find the initial feasible solution/ initial basic feasible solutionusing the “Least Cost method”; step two is to test the optimality of step one to see whether existsa better solution or not, using the “Stepping-stone method” and the “Modified Distribution(MODI) method”. This section provides detailed insights and calculations for each approachused to help readers understand how the transportation manager came to a conclusion, and howare those three approaches would assist VietSteel in solving their current problem.Notably, the result obtained is that the initial feasible solution is optimal. VietSteel will have atotal of four shipment schedules to choose, whereas still endure to the same transportation fee of$6,950. Furthermore, different shipment allocations equivalent with their schedule are presentedas well.It is suggested that after determining the initial feasible solution, the transportation managershould use mathematical equations of the MODI method instead of using the traditionalcalculations of the Stepping-stone method to reduce solving time
4I.INTRODUCTIONInexpensive transportation costs are what any business would strike to (Buu Dien 2015)associated with high availability as they allow firms to be more responsive to demands regardingaccurate and punctual shipping schedules (Russell et al. 2014). However, high transportationexpenses have been a burden to the logistic industry in Vietnam, as well as the whole economysince they have occupied 40% to 60% of total logistics costs (Saigon Times 2018). VietSteelCorporation, a Vietnamese producer and distributor of steel products located in Vietnam, isexperiencing the same challenge.The paper will present different methods conducted by VietSteel’s transportation manager whichwould assist the company in arranging shipping schedule effectively and accuratelyII.PROBLEM STATEMENTDue to the recent increase of demand, VietSteel’s truck fleet is operating over capacity and nowmust outsource their excessive shipping requirements to third-party transportation firms. Theaddressed problem here is that the company must find a way not only to allocate their shippingorder wisely to ensure accurate material availability between destinations but also to bear aminimal transportation cost. According to Deep, Jain and Salhi (2019), VietSteel is facing aproblem called a “Transportation Problem (TP)”, which deals with optimal distribution fromseveral sources to different destinations while still maintaining minimal total cost, demand aswell as capacity constraints.
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