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Developing an Optimization Model for Reducing the Transportation Costs of River Vessels (Case Study: Lafarge Surma Cement Ltd.)

Tasminur Mannan Adnan1 and Amit Das2

1. Industrial Engineering and Management, University of Oulu, FI 90014, Finland

2. Industrial and Production Engineering, Bangladesh University of Engineering and Technology, Dhaka 1000, Bangladesh


Abstract: Nowadays, supply chain management plays an important role for any organization and creates a competitive advantage. Supply chain management increase efficiency and makes processes faster by optimizing industrial operations. Supply chain not only generates cost, but also generates revenue through the provision of availability. Thus, it is important to understand the profit impact of logistics and supply chain decisions. However, data analysis is a better way for the province of optimization. The potential of data analysis and knowledge discovery techniques is largely untapped. This paper aims at providing a better understanding of the core concept of logistics and cost associated with it along with some optimization tools and techniques. The goal of this paper is to analyze cost model of river vessels at Lafarge Surma Cement (LSC) and developing a cost optimization model based on some factors. The results obtained from solutions are compared to make analysis and prove the result by showing percentage of cost reduction and total savings in Bangladeshi Taka (BDT). From the study, it is proved that considering some identical factors, it is possible to reduce the overall logistics cost notably. This paper seeks to identify best practice for logistics of LSC that might help run the organization more economically.

Key words: Optimization model, logistics management, transportation cost model, supply chain management.
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