ABSTRACT

In this case we have discussed mainly on manufacturing sector, like how new trends or concepts have emerged in the manufacturing sector, manufacturing industry has undergone dramatic changes due to significant and steady improvement in productivity. In fact, manufacturing is the all-industry leader in the rate of productivity improvement over the last 20 years, in manufacturing sector one of the important is physical distribution so we have described the physical distribution management. Its connected with ensuring the product in the right place at the right time. Marketing management realized that distribution could be organized in a scientific way so the concept of business logistics developed, focusing attention on the

increasing the importance of PDM. Business logistics techniques can be applied to PDM so the cost and customer satisfaction are optimized. So the operational research techniques will support

to minimize the transportation cost by various methods , that always decision maker should try to minimize the transportation cost to increase the companys profit like which we have used in the case by justification and analyzing.

INTRODUCTION

The manufacturing industry has undergone dramatic changes due to significant and steady improvement in productivity. In fact, manufacturing is the all-industry leader in the rate of productivity improvement over the last 20 years. To remain globally competitive, the manufacturing industry fundamentally transformed itself through rapidly improving technology,

implementation of manufacturing principles, multi-skilling, and innovative production-process improvement techniques. This transformation, has led to a new manufacturing paradigm

requiring fewer workers, but higher skills for those remaining. Simultaneously, this transformation has created a mismatch between skills required and the ability of existing and new workers. The result - even as overall employment in the manufacturing industry has declined, many employers report difficulty in finding and hiring the highly skilled employees they need. In a recent study, 80% of manufacturers stated a need for workers in one or more skill areas, but the lingering image of the old, dying, smokestack industry makes it hard to recruit young workers. The study documented that manufacturers have difficulty in recruiting skilled workers because of longstanding misperceptions of the manufacturing industry.

National Association of Manufacturing (NAM) ideas and changes opines, Manufacturing in America is the engine that drives the U.S. economy by creating job opportunity, and prosperity. Manufacturing sector employs 14.3 million people in U.S., plus another 6 million in related fields such as supply chain, finance, and wholesale. No other sector of the economy performs more R&D, drives more innovation, generates more exports or contributes more to economic growth. The future strength of the American economy, and the ability to maintain a high standard of living in the face of fierce global competition, depends on manufacturing..

MANUFACTURING INDUSTRY WORKFORCE CHALLENGES The rapid evolution of manufacturing processes demands a comprehensive foundation in

basic employability skills, advanced technical skills, and a commitment to life-long learning to keep pace with the rate of innovation that is commonplace in the industry today. For the industry to remain competitive, it must address the following workforce challenges:

Poor industry image within the community, education system, and government, making it an unattractive or unappealing career choice.

Lack of a coordinated manufacturing industry involvement in educational curriculum development to effectively address skill requirements.

Lack of relevant education content available upto +2 levels, caused by insufficient revenue streams to create, support and sustain educational programs, as well as upgrade faculty skill.

PHYSICAL DISTRIBUTION MANAGEMENT

An earlier resource pack described the decisions that must be taken when a company organizes a channel or network of intermediaries who take responsibility for the management of goods as they move from the producer to the consumer. Each channel member must be carefully selected and the company must decide what type of relationship it seeks with each of its

intermediate partners. Having established such a network, the organization must next consider how these goods can be efficiently transferred, in the physical sense, from the place of

manufacture to the place of consumption.

Physical distribution management (PDM) is concerned with ensuring the product is in the right place at the right time.

Place has always been thought of as being the least dynamic of the 4Ps. Marketing practitioners and academics have tended to concentrate on the more conspicuous aspects of marketing. It is now recognized that PDM is a critical area of overall marketing management. Much of its expertise is borrowed from military practice. During the Second World War and the Korean and Vietnam wars, supplies officers had to perform extraordinary feats of PDM, in

terms of food, clothing, ammunition, weapons and a whole range of support equipment having to be transported across the world. The military skill that marketing has adopted and applied to PDM is that of logistics. Marketing management realized that distribution could be organized in a scientific way so the concept of business logistics developed, focusing attention on and increasing the importance of PDM. Business logistical techniques can be applied to PDM so that costs and customer satisfaction are optimized. There is little point in making large savings in the cost of distribution if, in the long-run, sales are lost because of customer dissatisfaction. Similarly, it does not make economic sense to provide a level of service that is not really

required by the customer and leads to an erosion of profits. This cost/service balance is a basic dilemma that faces physical distribution managers.

TRANPORTATION

Transportation sector -- An energy-consuming sector that consists of all vehicles whose

primary purpose is transporting people and/or goods from one physical location to another. Included are automobiles; trucks; buses; motorcycles; trains, subways, and other rail vehicles; aircraft; and ships, barges, and other waterborne vehicles. Transportation usually represents the greatest distribution cost. It is usually easy to calculate because it can be related directly to weight or numbers of units. Costs must be carefully controlled through the mode of transport selected amongst alternatives, and these must be constantly reviewed.

TRANSPORTATION DIFFICULTIES

There are so many difficulties in transportation system in manufacturing sector. Manager always try to minimize the transportation cost. There are very many techniques to minimize the

transportation cost, In this OPERATIONAL RESEARCH will help to justify the critical transport system.

OPERATIONS RESEARCH TRANSPORTATION PROBLEM

Transportation problems are a focus of operations research.

Operations research (OR) is a field of study using mathematical tools to determine the most efficient way to design business processes. One topic of study in OR is the problem of maximizing transportation efficiency./ Minimizing the Total Transportation Cost.

Transportation problems in OR deal with the physical distribution of products from place to place. Because of the costs involved in transporting goods, maximizing its efficiency is of great interest to businesses. OR uses linear programming (LP) to address transportation problems. LP is a mathematical planning process allocating resources in the most efficient manner. These

resources include physical and human capital. Setting up an LP to solve transportation problems rests on a number of assumptions. Among these are that supply will always meet demand and the number of transportation routes must equal the number of source sites plus the number of

destination sites.

The following table shows all necessary in formation on the availability of supply to each warehouse.the requirement of each market and the unit transportation cost from each warehouse to each market.

warehouse P Q R S Supply

Market

A 6 3 5 4 22

B 5 9 2 7 15

C 5 7 8 6 8

Requirement 7 12 17 9 45

The shipping clerk has worked out the following schedule from experience.

12 units from A to Q: 1 unit from A to R: 9 units from A to S: 15 units from B to R: 7 units from C to P: 1 unit from C to R.

C heck and see if the clerk has the optimal schedule.

Find the optimal schedule and minimum cost of total transportation.

If the clerk is approached by carrier to route C to Q, Who offers to reduce his rate in the hope of getting some business, by how much the rate should be reduced so that the clerk will offer him the business.

SOLUTION:- 1.MINIMUM MATRIX METHOD:

P Q R S SUPPLY

A 6

3

12

5

1

4

9

22

B 5 9 2

15

7

15

0

C 5

7

7 8

1

6

8

0

DEMAND 7

0

12

0

17

0

9

0

45

0

M+N-1

4+3-1=6

NOTE:- it has a initial basic feasible solution.

COMPUTATION OF MINIMUM TOTAL TRANSPORTATION COST

Market warehouse Cellentry allotted entry Total cost

A -Q

R

S

B- R

C-P

R

5 12

5 1

4 9

2 15

5 7

8 1

36

5

36

30

35

8

TOTAL 150

Vogels approximation method or penalty method:

P Q R S SUUPLY ROW PENALTIES

1 2 3 4

A 6 3

12

5

12

4

8

22

0

1 1 1 2

B 5 9 2

15

7 15

0

3 3 - --

C 5

7

7 8 6

1

8

0

1 1 1 1

DEMAND 7

0

12

0

17

0

9

0

45

0

1 - 3

2 - - 2

3 1 - 2

4 1 - -

4

3

3

2

COMPUTATION OF MINIMUM TOTAL TRANSPORTATION COST

Market warehouse Cell entry allotted entry Total cost

A -Q

R

S

B- R

C-P

R

3 12

5 2

4 8

2 15

5 7

6 1

36

10

32

30

35

6

TOTAL 149

3.MINIMUM MATRIX METHOD:

P Q R S SUPPLY

A 6

7

3

4

5

2

4

9

22

0

B 5 9 2

15

7

15

0

C 5 7

8

8 6

8

0

DEMAND 7

12

0

17

0

9

0

45

0

M+N-1

4+3-1=6

NOTE:- it has a initial basic feasible solution.

COMPUTATION OF MINIMUM TOTAL TRANSPORTATION COST

Market warehouse Cell entry allotted entry Total cost

A -P

Q

R

S

B-R

C- Q

6 7

3 4

5 2

4 9

2 15

7 8

42

12

10

36

30

56

TOTAL 186

Statement showing total transportation cost computed under various method:-

1. Clerks schedule.Rs 150 2. MMMRs 150 3. VAM..Rs 149 4. When the consignment is routed through

C to QRs 186

Differential cost statement

Reduction anticipated

1. Clerical schedule

2. MMM

3. VAM

186-150=36

186-150=36

186-149=37

36/8 =4.50

36/8 =4.50

37/8 =4.50

INFERENCE:- when minimum transaction cost of clerical schedule is compared with the anticipated cost and the difference will calculated by total cost per unit then you will get Rs 4.50. similarly NWCR,MMM and VAMSS cost is compared with the anticipated cost and difference

will be calculated by total cost per unit then we get Rs 1.25, Rs4.50 and Rs4.60 respectively.

When compared to all reduction anticipated cost,VAM is the best method to reduce the anticipated cost ie,Rs4.60. so, clerk will offer him this consignment.

Transportation Models are typically been designed to deal with critical logistic problems. In the modern business world, when competition is order of the day, every businessman seeks to optimize the end-results associated with his venture. The problem occurs with the logistics manager as to how to minimize his total transportation cost keeping in tact the quality of material

he supplies on the one hand and time efficiency on the other hand. The credit of innovating this model goes to George B. Dantzig and he came out with Linear Programming algorithm to tackle the typical logistics problems.

There is a special offer which is made by a supplier of a carrier to reduce the

transportation cost per unit if at all the order is placed to him. But the clerk is in a dilemma as to how much of reduction he should anticipate to reap the benefit of this offer?

To support and aid the clerk in proper decision-making, the following calculations have been made.

Firstly, the total transportation cost associated with the conditioned supply of

supplying the consignment from C to Q is calculated. Secondly, a differential cost statement is prepared to find out the amount of

reduction anticiapated in total cost per unit.

Warehouse

P Q R S Supply

Market

A 6 3 5 4 22

B 5 9 2 7 15

C 5 7 8 6 8

Requirement 7 12 17 9 45