Sugar distribution in Tanzania: a linear programming approach to minimization of transportation cost

In Economics, it is known that demand for transport is a "derived" demand, that is transportation is not an end by itself but a means to an end. It is evident and acknowledged that transportation is an ingredient of nearly every aspect of social and economic development. It plays a key role in getting land into production, in marketing and distribution of agricultural and industrial goods and services, in the development of core and ancillary industries, in the expansion of trade and commerce, in consolidating political power and many other reasons. This study deals with the distribution of sugar in Tanzania. It determines an optimal transportation solution by the use of an L-P technique. The problem centres on the availability (capacity) and operational aspects of the different modes of transport. The sugar transportation problem is set as a case of minimization of transport costs from the four sugar factories (Kagera, Kilombero, Mtibwa and T.P.C.) to l7 regions of Tanzania mainland with an exception of Coast, Lindi and Mtwara regions which obtains its allocation from Dar es Salaam Depot. The constraints in the model were basically supply and demand and later the availability of railway wagons was incorporated as an additional constraint. In finding the initial basic feasible solution two methods were used, the North-West Corner Rule and the Least Cost Method. Finally, an L-P Computer package was used to obtain the least cost solution. In comparing the computer solution and SUDECO's actual cost, it showed that the computer solution involved transportation costs less than half the SUDECO actual cost in the distribution of sugar. The economic analysis of SUDECO's fleet showed that the use of own fleet was more expensive than the use of hired trucks. The study recommends that SUDECO should try and use the study's solution so as to transport sugar at minimum cost. Another recommendation to SUDECO is that it should increase its storage capacities at the factories so as to minimize the peak load problem during peak production period when there is low wagon availability due partay to coincidence of peaks with other users, especially crop procurement.