A PROJECT ON TRANSPORTATION

PROBLEM

Submitted To:-Prof. B. K. Soam

Submitted by:-
Amit Kumar Verma(TL)
Sudhanshu Singh
Isha Rai
Rashmi Sing
5/5/2011
 ACKNOWLEDGEMEN

It is not possible to prepare a project report without the assistance &

encouragement of other people. This one is certainly no exception.
On the very outset of this report, I would like to extend my sincere &
hear felt obligation towards all the personages. Without their active
guidance, help, cooperation & encouragement, I would not have
made headway in the project.
I would like to express my sincere thanks to everyone who has
continuously guided me & supported in all the tasks by giving me
valuable insight into issues like the meaning of HR practices, its uses,
objectives and tools as well as steps to be considered in developing
and studying an organizational structure.
We sincerely thank help provided by my institute “Accman Institute
of Management” which provided me necessary material for
completion of this project.

We are also thankful to our sincere MSDM faculty Mr. B. K. Soam

and our dear friend Sunil Kumar Yadav(accounted), Aklakh Khan()
of Ultra tech Cement.

Also, we thank all respondents who supported me lot without their

help project completion was not possible.

Amit Kumar Verma(Tl)

Sudhanshu Singh
Isha Rai
Rashmi Sing
 PREFACE

It is era of globalization. Now World becomes global village. In

present scenario there is a growth in market in our country.
Sometimes, we see some fluctuation in market. It is happening
because there is changing in taste and choice of customers/consumers.
Now a days Market is very much dependent to consumers/customers
choice and taste. To understand the taste and choice of
customers/consumers and take step according to customers/consumers
choice is very necessary to become the market leader. These things
are very common for all company. In this context comparative study
of determining transportation cost by different method and choosing
those method which offer least cost and maximize the profit.

Management Science for Decision Making project is one of the

essential parts towards the partial fulfillment of the requirement of
two-year full time PGDM program. In this line we had an opportunity
to undergo practical project of ULTRA TECH CEMENT .

During project time, We visited to ULTRA TECH OFFICE and meet

with SUNIL KUMAR YADAV and collect full information about
company, his warehouses, his plant production capacity and different
warehouses requirement in particular interval of time i.e. one month.
Also collect the cost paid by the company to sending product from
plant to warehouses.

Through this study my company would get valuable information and

this project will help me to have a valuable experience of real market
which would be fruitful in my career.
 Table of Contents

Page No.
Topic
3
1.History of transportation
4-6
2. mode of transportation
7
3. Preface
8
4. Acknowledge
9
5. Executive summary
10-11
6, Objective of study
11-13
7. Introduction of Yamaha motors
13-15
8. Industrial Profile
16
9. Collected Primary Data
17-18
10.General Mathematical Model of
Transportation Problem
19
11.Calculation of transportation cost
19-21
11. a. North west corner rules
21-22
11.b. Least Cost Method
11.c. Vogel’s Approximation Method 22-24
24-25
12.Cost of different Depot to Dealer of
Yamaha Motors
26
12.a. Cost calculated by North West Method
27
12.b. Cost calculated by Least Cost Method
12.c. Cost calculated by Vogel’s method 28
30
13.Conclusion
30
14. Recommendation
30
Lists of Respondents
 What is Transportation:-

Transportation is the movement of people and goods from one

place to another. The term is derived from the Latin trans ("across")
and portare ("to carry"). Industries which have the business of
providing equipment, actual transport, or goods and services used in
transport of goods or people make up a large broad and important
sector of most national economies, and are collectively refered to as
transport industries.
 The History of Transportation

3500BC Fixed wheels on carts are invented - the first wheeled

vehicles in history. Other early wheeled vehicles include the
chariot
3500BC River boats are invented - ships with oars
2000BC Horses are domesticated and used for transportation
181-234 The wheelbarrow is invented.
770 Iron horseshoes improve transportation by horse
1492 Leonardo da Vinci first to seriously theorize about flying
machines - with over 100 drawings that illustrated his
theories on fligh
1620 Cornelis Drebbel invented the first submarine - an human
oared submersible
1662 Blaise Pascal invents the first public bus - horse-drawn,
regular route, schedule, and fare system
1740 Jacques de Vaucanson demonstrates his clockwork powered
carriage
1738 First practical steamboat demonstrated by Marquis Claude
Francois de Jouffroy d'Abbans - a paddle wheel steamboat
1769 First self-propelled road vehicle invented by Nicolas Joseph
Cugnot
1783 The Montgolfier brothers invent the first hot air balloons
1787 Steamboat invented
1790 Modern bicycles invented
1801 Richard Trevithick invented the first steam powered
locomotive (designed for roads)
1807 Isaac de Rivas makes a hydrogen gas powered vehicle - first
with internal combustion power - however, very
unsuccessful design
1807 First steamboat with regular passenger service -
inventor Robert Fulton's Clermont.
1814 George Stephenson invents the first practical steam
powered railroad locomotiv
1862 Jean Lenoir makes a gasoline engine automobile
1867 First motorcycle invented
1868 George Westinghouse invents the compressed air
locomotive brake - enabled trains to be stopped with fail-
safe accuracy
1871 First cable car invented
1885 Karl Benz builds the world's first practical automobile to be
powered by an internal combustion engine
1899 Ferdinand von Zeppelin invents the first successful dirigible
- the Zeppelin
1903 The Wright Brothers invent and fly the first
engined airplane.
1907 Very first helicopter - unsuccessful design
1908 Henry Ford improves the assembly line for automobile
manufacturing
1908 Hydrofoil boats co-invented by Alexander Graham Bell &
Casey Baldwin - boats that skimmed water
1926 First liquid propelled rocket launched
1940 Modern helicopters invented
1947 First supersonic jet flight
1956 Hovercraft invented
1964 Bullet train transportation invented
1969 First manned mission (Apollo) to the Moon
1970 First jumbo jet
1981 Space shuttle launched
 MODE OF TRANSPORTATION

Broadly speaking, transportation means can be classified as under:-

1. Land transport
2. Water transport
3. Air transport

Land Transport:-
Sometime around the late Neolithic age, man learned how to
domesticate animals. He used horse and other beasts of burden to not
only help him till the soil but also for transportation
purposes. However, the invention of Wheel, around 4000-3500 BC,
entirely changed man’s outlook towards life. Transportation became
faster. Not only could man himself travel faster but also take loads of
goods along with him to distant places. Thus, was also born the idea
of trade and exchange.

The land mark inventions that followed are as under:

 Two-wheel chariot - world’s first form of wheeled

transportation - invented in Sumeria, around 3500 BC. This
eventually led to invention of four-wheel chariot in due
course.
 Cart driven by a steam turbine, build by a Jesuit missionary
in China– 1670 AD
 Modern bicycles invented – 1790 AD
 Richard Trevithick invented the first steam powered
locomotive (for roads) -1801 AD

  George Stephenson invented the first practical steam
powered railroad locomotive – 1814 AD
 Jean Lenoir made a gasoline engine automobile – 1862 AD
 Invention of Internal Combustion Enginebya Frenchman
named Jean Joseph Etienne Lenoir – 1860 AD
 1867- First motorcycle invented
 1885 - Karl Benz builds the world's first practical automobile
to be powered by an internal combustion engine
 First experiment of electric powered trains – 1895 AD
 Henry Ford improves the assembly line for automobile
manufacturing – 1908 AD

During World War II, the diesel engine came into widespread use,
and steam was almost completely forgotten. Advancements have
continued to be made in the time since.
 Water Transport
It is interesting to note that man had developed means of traveling
on water even before he had domesticated the horse. Though the
origin of the dugout boat still remains one of history’s great
mysteries, but it does indicate that man had known how to travel on
water long before other means of transport developed. This
historians point may have been due to an accidental invention.
Nevertheless, the addition of the boat changed the face of water
transportation.

At first, Simple boats evolved to include a large square of cloth

mounted on a central pole. This cloth was called a sail. The sail
aided in navigation and wind pressure propelled the boat. Soon this
gave way to sail-propelled ships. Later, these sail-propelled ships
grew bigger in size while sleeker in design. First the oars and
rudders and then the deck covers were also included in the ship’s
design.

With the advent of automation in 19th century, water transportation

changed forever. Ships shed their sails. Now more goods and
people could be transported faster.

The landmark inventions in water transportation are as under:

 Cornelis Drebbel invented the first submarine in 1620 AD

 First practical steamboat demonstrated by Marquis Claude
-1783 AD
 Steamboat invented – 1787 AD
 First diesel-powered ship – 1912 AD
 Hovercraft invented – 1956 AD
 First nuclear powered ship launched – 1958 AD
Air Transport

Man’s next stride in transportation looked not to the land, or even to

the seas, but to the sky. Although many people had toyed with the
idea of flight,
but the first sustained, controlled flight took place only in
December 17, 1903, at Kitty Hawk, North Carolina. The inventors
of this new flying machine were brothers Orville and Wilbur
Wright, two bicycle makers. They invented a bicycle propelled
contraption which later evolved into jet-propelled aircraft capable
of world-wide mass transfer. It came to be called the aeroplane.
Aeroplane made it easier for people to travel great distances in less
time.

The land mark inventions in air transportation

are as under:-

 Leonardo da Vinci - first to seriously theorize about flying

machines - with over 100 drawings that illustrated his theories
on flight – 1492 AD
 The Montgolfier brothers invent the first hot air balloons –
1783 AD
 The Wright Brothers invent and fly the first engine airplane –
1903 AD
 Very first helicopter – though an unsuccessful design – 1907
AD
 General Mathematical Model
of Transportation Problem
Let there be m sources of supply, S1, S2, ……….,Sm having ai
(i=1,2,3,4…..n) unit of supply (or capacity) respectively, to be
transported among n destination D1, D2,………Dn with bj
(j=1,2,3,4,………,n) units of demand (or requirement ) respectively.
Let Cij be the cost of shipping one unit of the commodity from source
i to destination j for each route. If Xij represent number of units
shipped per route from source i to destination j, the problem is to
determine the transportation schedule so as to minimize the total
transportation cost satisfying supply and demand conditions.
Mathematically, the problem is general may be started as follows;

Minimize (total cost) Z= ∑𝑛𝑖=1 ∑𝑛𝑗=1 𝐶𝑖𝑗 𝑋𝑖𝑗 (1)

Subject to the constraints

∑𝑛𝑗=1 𝑋𝑖𝑗 = 𝑎𝑖, 1 = 1,2, … . . 𝑚 (Supply constrains) (2)

∑𝑚
𝑖=1 𝑋𝑖𝑗 = 𝑏𝑗, 𝑗 = 1,2,3, … … , 𝑛 (Demand Constrains) (3)

And Xij ≥ 0 for all i and j

For easy presentation and solution, a transportation problem

data is generally presented as shown in table

Existence of Feasible Solution:-

A necessary and sufficient condition for the existence of a feasible

solution to the transportation problem (1) and (4) is

Total supply= Total Demand

∑𝑚
𝑖=1 𝑎𝑖 =∑ 𝑛
𝑗=1 𝑏𝑗
 General Transportation Table

To D1 D2 ……… Dn Supply
From …. Ai

S1 C11 C12 ……….. C1n a1

X11 X12 X1n

S2 C21 C22 ……….. C2n a2

X21 X22 X2n

… … … ……… … …
… … … … …

Sm Cm1 Cm2 ……….. Cmn Am

Xm1 Xm2 Xmn

Demand b1 b2 ………. Bn ∑𝑚𝑖=1 𝑎𝑖 =

Bj ∑𝑛𝑗=1 𝑏𝑗

In this problem, there are (m+n) constrains one for each source of
supply and distinction and m × n variables. Since all (m+n)
constraints are equations, since the transportation model is always
balanced ( total supply= total demand), one of these equation is extra
(redundant). The extra constraints equation can derive from the other
constraint equations without affecting the feasible solution. It follows
that any feasible solution for a transportation problem must have
exactly (m+n-1) non negative basic variables (or allocations)
 Calculation of Transportation
Cost
Transportation cost are calculated by three methods, they are:
1. North East Corner Method
2. Lowest Cost Entry Method
3. Vogel’s Approximation Method (VAM)

1. North-West corner method (NWCM)

The North West corner rule is a method for computing a basic
feasible solution of a transportation problem where the basic variables
are selected from the North – West corner (i.e., top left corner).

Steps:-
1.Select the north west (upper left-hand) corner cell of the
transportation table and allocate as many units as possible equal to the
minimum between available supply
and demand requirements, i.e., min (s1, d1).

2.Adjust the supply and demand numbers in the respective rows and
columns allocation.

3. If the supply for the first row is exhausted then move down to the
first cell in the second row
4.If the demand for the first cell is satisfied then move horizontally to
the next cell in the second column.
5.If for any cell supply equals demand then the next allocation can be
made in cell either in the next row or column.
6.Continue the procedure until the total available quantity is fully
allocated to the cells
as required.
Example:-

A Company has three production facilities F1,F2,F3 with production

capacity of 250, 300, 400 per day of a product , respectively .These
are to be shipped to four warehouses W1,W2,W3,W4 units per day ,
respectively .The transportation cost per unit between factories to
warehouses are given in the table below-

W1 W2 W3 W4 SUPPL
Y
F1 11 13 17 14 250
F2 16 18 14 7 300
F3 21 20 13 10 400
DEMAN 200 225 275 250 950
D

Solution
BY NORTH-WEST CORNER METHOD :
W1 W2 W3 W4 SUPPLY

F1 11 13 17 14 250
200 50

F2 16 18 14 7 300
175 125

F3 21 20 13 10 400
150 250
DEMA 200 225 275 250 950
ND
The transpotetion cost is given by :-

T= 11 × 200 + 13 × 150 + 18 × 175 + 14 × 125 + 13× 150 + 10 × 250

= Rs 12200

1. Least Cost Method

Matrix minimum method is a method for computing a basic feasible
solution of a
transportation problem where the basic variables are chosen according
to the unit cost of transportation.
Steps
1.Identify the box having minimum unit transportation cost (cij).
2. If there are two or more minimum costs, select the row and the
column corresponding to the lower numbered row
3. If they appear in the same row, select the lower numbered column.
4. Choose the value of the corresponding xij as much as possible
subject to the capacity and requirement constraints.
5.If demand is satisfied, delete the column .
6. If supply is exhausted, delete the row.
7.Repeat steps 1-6 until all restrictions are satisfied.
EXAMPLE- Previous example solve by this method

W1 W2 W3 W4 SUPPLY

F1 11 13 17 14 250
200 50
F2 16 18 14 7 300
50 250
F3 21 20 13 10 400
250 275

DEMA 200 225 275 250 950

ND

T = 11 × 200 + 13 × 50 + 18 × 50 + 20 × 250 + 13 × 275 + 7 × 250

= 11575
 2. By Vogel’s Approximation
Method:

The Vogel approximation method is an iterative procedure for

computing a basic feasible
solution of the transportation problem.

Steps
1.Identify the boxes having minimum and next to minimum
transportation cost in each row and write the difference (penalty)
along the side of the table against the
Corresponding row.
2. Identify the boxes having minimum and next to minimum
transportation cost in each column and write the difference (penalty)
against the corresponding column
3. Identify the maximum penalty. If it is along the side of the table,
make maximum allotment to the box having minimum cost of
transportation in that row. If it is
below the table, make maximum allotment to the box having
minimum cost of
transportation in that column.
4. If the penalties corresponding to two or more rows or columns are
equal, select the top most row and the extreme left column
 W1 W2 W3 W4 SUPPL P1 P2 P3 P4 P5 P6
Y
F1 11 13 17 14 250
2 2 2 11 11 11
25 225
F2 16 18 14 7 300
7 2 2 16 16 ---
250
50
F3 21 20 13 10 400
3 7 1 21 --- ---
125 275
DEM 200 225 275 250 950
AND

R1 5 5 1 3

R2 5 5 1 -----

R3 5 5 ---- -----

R4 5 ----- ----- -----

R5 5 ------ ----- -----

R6 11 ------ ------ -----

T = 11 × 25 + 13 × 225 + 16 × 50 + 7 × 250 + 13 × 275 + 7 × 250

= 11575
Type Public BSE: 532538

Industry Building materials

Founded 1983

Headquarters Mumbai, Maharashtra, India

Key people O P Puranmalka, Director

Products Cements

Revenue 14,068 crore (US$3.09 billion)

(2010-2011)[1]

Profit 1,404 crore (US$308.88 million)

(2010-2011)[1]

Parent Grasim Industries

Website www.ultratechcement.com

Financial GP Kapadia & Co (2011)

Auditors:

Total 11,509
Employees:
INTRODUCTION:-

UltraTech Cement Limited is leading cement company and the country

is largest exporter of cement clinker based in Mumbai, India. It has an
annual capacity of 23.1 million tonnes. It manufactures and markets
Ordinary Portland Cement, Portland Blast Furnace Slag Cement and
Portland Pozzalana Cement. It also manufactures ready mix concrete
(RMC). The export markets span countries around the Indian Ocean,
Africa, Europe and the Middle East. It is part of Grasim Group.

UltraTech Cement Limited has five integrated plants, six grinding

units and three terminals two in India and one in Sri Lanka.

UltraTech is subsidiaries are Daksh in Cement Limited, UltraTech

Cement Lanka (Pvt.) Ltd. And UltraTech Cement Middle East
Investments Limited.
 Mission, Vision & Values:-

Vision of the company:-

 To be a premium global conglomerate with a clear focus on

each business.
 To become world most big company of cement and concrete.

Mission of the company:-

 To deliver superior value to the customers, shareholders,

employees and society atlarge. KUMAR MANGALAM
BIRLA SAYS.
 our goal is to become a US $65 billion group by 2015 from US
$30 billion company today. we expect company to contribute
significally to this growth and earnings.

Values of the company:-

People contribute when they relate to an organization and they
relate, when they understand the organization. People understand
an organization through its values by experiencing the culture that
values create and by using the systems and processes that values
define. In large organizations, such shared understanding cannot
be created through leadership of individuals alone; it requires
leadership of principles, of beliefs, of conviction. Integrity,
Commitment, Passion, Seamlessness, Speed. These together
constitute what they call their Value
History of the company:-

1983 Awarpur Cement Works Plant I

1987 Awarpur Cement Works Plant II

1993 Jharsuguda grinding unit

1994 Hirmi Cement Works

1996 Gujarat Cement Works Plant I

1998 Andhra Pradesh Cement Works

Gujarat Cement Works Plant II
1999 Narmada Cement Company Limited acquired
Ratnagiri Cement Works
2000 Bulk cement terminals at Mangalore,
Navi Mumbai and Colombo

2001 Grasim acquires 10 per cent stake in L&T.

Subsequently increasesstake to 15.3 per cent

2002 Grasim increases its stake in L&T to 14.15 per cent

Arakkonam grinding unit
The Grasim Board approves an open offer
for purchase of up to 20 percent of the equity shares
of Larsen & Toubro Ltd (L&T), in accordance
with the provisions and guidelines issued by the
Securities & Exchange Board of India (SEBI)
Regulations, 1997.
2003 The board of Larsen & Toubro Ltd (L&T) decides
to demerge its cement
business into a separate cement company (CemCo)
Grasim decides to
acquire an 8.5 per cent equity stake from L&T
and then make an open

2004 Completion of the implementation

process to demerge the cement
business of L&T and completion of open offer by Grasim,
with the latter acquiring controlling stake in the
newly formed company
UltraTech

2006 Narmada Cement Company Limited amalgamated

with UltraTech

Ultratech Cement receives order from BIFR.

Ultratech Cement Ltd has appointed Mr Girish M Dave

as a Director on the Board of the Company.

2009 UltraTech to absorb Samruddhi to form India's

biggest cement firm

Ultratech to be the lead sponsors of Rajasthan Royals

UltraTech to consider Grasim merger proposal

2010 Ultratech Cement Ltd has appointed

Mr. 0 P Puranmalka as Additional Director
with immediate effect.
COMPANY DESCRIPTION:-

UltraTech Cement Limited, together with its subsidiaries, engages

in the manufacture and sale of cement in India and internationally.
The company manufactures ordinary portland cement, portland
blast furnace slag cement, and portland pozzalana cement, as well
as ready mix concrete. It exports cement clinker to countries
around the Indian Ocean, Africa, Europe, and the Middle East.
The company was formerly known as UltraTech CemCo Limited
and changed its name to UltraTech Cement Limited in October.

COMPANY ANALYSIS:-

According to the Consolidated - Audited financial statement for

the ear of 2011, total net operating revenues increased with
93.20%, from INR 7,281.76 tens of millions to INR 14,068.35 tens
of millions. Operating result increased from INR 1,991.26 tens of
millions to INR 2,589.33 tens of millions which means 30.03%
change. The results of the period increased 12.65% reaching INR
1,235.55 tens of millions at the end of the period against INR
1,096.84 tens of millions last year. Return on equity (Net
income/Total equity) went from 23.75% to 11.61%, the Return On
Asset (Net income / Total Asset) went from 15.51% to 6.87% and
the Net Profit Margin (Net Income/Net Sales) went from 15.06%
to 8.78% when compared to the same period of last year. The Debt
to Equity Ratio (Total Liabilities/Equity) was 169.02% compared
to 153.11% of last year. Finally, the Current Ratio (Current
Assets/Current Liabilities) went from 1.16 to 1.13 when compared
to the previous year.
 Andhra Pradesh Cement  Arakkonam Cement Works
Works
 Awarpur Cement Works  Jharsuguda Cement Works

 Gujarat Cement Works  Maggalla Cement Works

 Hirmi Cement Works  Ratnagiri Cement Works

 Jafrabad Cement Works  West Bengal Cement Works

 Ginigera Cement
Objective of study

The main objective of transportation is Physical distribution of goods

and services from several supply centers to demand centers. Delivery
the goods at right time at right place.
Objective of the transportation is to minimize the overall costs by
increasing operational efficiency of the manufacturing process.
1) Increased efficiency
2) Improved customer service
3) Increased sales
4) Improved relationships
1.Increased efficiency

To increase efficiency, a company must develop cost-effective

transportation rates while reducing overhead, total inventory, and
overall cost-per-order processing. You can improve your warehouse
operations, including processes, layout, and flow, by working closely
with your transportation provider. Establish a two-way relationship
with your carrier to frequently share best practices, issues, and
opportunities.

2.Improved customer service

In direct marketing enterprises, fulfilment operations are in
partnership with marketing and merchandising. This partnership is
like a three-legged stool — without all three legs the stool cannot
stand. Fulfilment operations’ inbound and outbound transportation is
key to delivering marketing’s promise to the customer to get the
shipment delivered on time and in good condition.
3.Increased sales
Several opportunities exist for improving service, and those in turn
can be used to marketing’s advantage. Look at inbound and outbound
freight as separate operations with separate
requirements. Bundle the volumes wherever possible
with your carriers, but recognize the differences
between the channels.
1) Building relationships
True two-way collaboration between retailer and carrier is key
to the success of logistics execution. Measures of success are
total cost, time in transit, and responsiveness of the carrier
representative

Defining the problem and deciding the research objective:-

Identified problem or the objective of the research discussed in the

report are:--

1. Developing the research plan:-

A. Secondary data:-
The source from which secondary data collectect:-

 Press releases of the company .

 Magazines
 Websites such as http://www.moneycontrol.com ,and
 B. Primary data:-
Collection of primary data was conducted by visiting the people personally for the

preparation of the report .

Research approach:-
It means the way by which the information was collected.
Visiting the various places of Delhi, getting the questionnaire
filled by different individual.
Transportation cost from Different Ware
house to different dealer of UltraTech.

We are taking four ware house i.e. delhi , Agra

Harayana, and Ghaziyabad their respective dealer i.e. .
delhi , Agra Harayana, and Ghaziyabad and cost for
each combination is given below-

Demand Capacity
Delhi 1500 mt 10000sq (1000mt)
Harayana 2000 mt 13000 sq(1300mt)
Agra 1850 mt 18000sq(1800mt)
Ghaziabad 1200 mt 12000sq(1200mt)

Delhi Haryana G. bad Agra

Delhi 250 420 350 700
Harayana 420 600 500 800
G. bad 350 500 500 700
Agra 700 800 700 450

All the cost are given in mt.