An Application of the Transportation Model: the Case of Inter-factory Transfer of Bulk Whole Liquid Milk at the Kenya Co-operative Creameries (Kcc) Limited

Abstract

Business organizations are faced with ever increasing costs in transportation of goods, more so especially in view of the high prices of transportation equipment and the continually rising running expenses. Organizations should therefore seek ways and means to reduce such costs. Optimization techniques in the field of operations research (OR) could provide a solution. It is within such a background that this study was initiated to see if the KCC's inter-factory transfer of bulk whole liquid milk is amenable to transportation model techniques. The paper attempts to model the transfers of bulk whole milk between the KCC factories as a transportation problem. In so doing It incorporates both the technical and managerial considerations as viewed by the KCC management. Using a past financial year's data, the- author attempts and shows that if the transportation model had been used in planning the transfers then savings in the transportation costs could have been realized. The major recommendation of the study is the need for an OR specialist in the KCC management. Such a specialist would, together with others, develop an integral vie~ of the KCC set up and hence plan for the achievement of optimal conditions in making the transfers