An Optimization Model for Ordering and Transporting Raw Materials by Manufacturers Based on Linear Programming

Abstract

This study applies analytic hierarchy process (A­­­HP), 0-1 integer programming and other systematic programming models, combined with the needs of manufacturers to build a set of mathematical models to help manufacturers select suppliers, control raw material ordering costs, and transporting costs. As the production costs of products is linked to the ordering and transporting of raw materials, manufacturers need to choose suitable raw material suppliers and develop the most economical ordering and transporting schemes with the most negligible loss so as to improve profits and enhance the market competitiveness. Taking a building and decorative plate enterprise as a case, this model shows that AHP can effectively quantify the supplying characteristics of suppliers and obtain a list of high-quality suppliers. LINGO software combined with linear programming can be used to obtain the optimal weekly ordering and transporting schemes, thus reducing the raw material ordering costs and transporting losses. It is shown from the results that the production costs of enterprises from the source can be reduced so as to improve their cost control system. The present study seeks to fill the gap in ordering and transporting raw materials for manufacturers to control production costs. At the same time, this model provides references for producers who have the demand for processing raw materials and play a significant role in controlling production costs.