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Managerial Decisions for Cost in Transportation: An Applying Integer Linear Programming Model

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  • Ahmet Ergülen
  • Halim Kazan

Abstract

Managers in the firms are required to make several short and long term decisions. Such decisions for small firms are generally related with stocks and pricing policies and for big firms, such decisions are mostly related with production, investment, financing, stoking, and pricing the stock, employment and transportation policies. The most important element of the decision is uncertainty. As such, setting up mathematical models based on actual data to sort out the problems plays an important role in decision making process. The aim of this study is to set up a model to minimize distribution costs related with transportation policy which is off particular importance for the firms that are operating in the rather competitive environment. The results of this study suggest that financing structure of firms can be improved by using models. This model provides an alternative to the distribution system of the firm. While the cost results were compared with the annual solution of the model and of the firm, cost minimization was seen in annual distribution of the products.

Suggested Citation

  • Ahmet Ergülen & Halim Kazan, 2011. "Managerial Decisions for Cost in Transportation: An Applying Integer Linear Programming Model," Ekonomika a Management, Prague University of Economics and Business, vol. 2011(4), pages 15-36.
    • Handle: RePEc:prg:jnleam:v:2011:y:2011:i:4:id:147:p:15-36
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    References listed on IDEAS

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    1. Anantaram Balakrishnan & Harihara Prasad Natarajan & Michael S. Pangburn, 2000. "Optimizing Delivery Fees for a Network of Distributors," Manufacturing & Service Operations Management, INFORMS, vol. 2(3), pages 297-316, August.
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    More about this item

    Keywords

    MMT; ILP and LP;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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