Optimizing Multimodal Transportation: A Case Study In Phong Phu Joint Stock Company

Abstract

The extraordinary expansion of global trade has led to a huge increase in the movement of commodities worldwide. A big number of businesses have widely embraced the multimodal transportation system to achieve commodities circulation between diverse areas and countries. The costs of foreign and domestic logistics, meanwhile, account for roughly 30-50% of a company’s total production costs, according to the pertinent figures. One of the most crucial ways for a business to increase earnings and keep its competitiveness in the global market is to reduce transportation expenses. As a result, how to optimize freight routes selection to move commodities across the multimodal transportation network has gained great concern of both the decision makers and multimodal transport operators. Phong Phu JSC is one of the well-known textile company which exported their goods to a wide range of places both domestically and internationally. Therefore, the optimization of transportation costs is an essential issue that needs to be paid attention. In this study, the concern will be solved by using variety of transportation modes of the transport network with the beginning at one factory to the ending at one customer. Transportation times and expenses vary due to different types of transportation. In this research, to achieve the ideal objective-optimize the transportation such as time, cost, labor, a Linear Programming model was developed with different constraints and objectives as well as parameters and solving with IBM CPLEX and Python. The proposed model can be used to make strategic decisions, such as choosing the right number of facilities to build in order to reduce the overall costs of the supply chain network.