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Description:The hypothesis to be verified in this study states that the present method of distributing chemicals, fuel and lubricants, and primary iron and steel products between certain locations is inefficient. As production processes become more specialized due to location-specific resource availability, transportation becomes the important link between production centers and the consuming public. Chemical plants and refinery operations, for example, are concentrated in the northeastern sector of the Texas coastal zone. From this point of manufacture, the finished or intermediate product must be shipped to the ultimate users. The linear programming (LP) model formulated in this study seeks to minimize the total cost of distributing a given volume of commodities among given locations. Since this analysis considers rail, truck, and barge modes, the locations included in the model must be accessible by all three transportation modes. The five cities are: Corpus Christi, Houston, Beaumont/Port Arthur, New Orleans, and St. Louis. According to the LP formulation, the present distribution scheme could be improved to reduce total distribution costs and still satisfy the demand requirements for each city. Certain simplifying assumptions were specified to allow the model to work. Thus, all results must be considered in light of the stated assumptions, and the implications should be evaluated accordingly. Price responsiveness to changes in modal capacity restrictions were approximated in what-if fashion. That is, how much will the price of barge transportation service change as barge capacity is altered? Likewise, how will modal capacities respond to changes in the price charged for the respective transportation services? From this analysis, it was concluded that barge and truck modes were highly complementary, while rail transportation behaves more as a substitute service. In other words, barges move goods over long hauls, while trucks are employed for short hauls. Rail, on the other hand, moves the overflow of quantities beyond existing barge and truck carrying capability, according to the model. Based on known customer requirements, known travel times for each transport mode, availability of the desired mode between any two locations, and prior planning, an efficient movement scheme can be developed even without introducing a time variable into the formulation.
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