ABSTRACT
Transporting personnel from one location to another is one inevitable challenge faced by most organizations especially with large multi-national corporations. Transportation of personnel can be direct trip or via transshipment nodes. Shell Petroleum Development Company whose operations is in the Southern part of Nigeria has been facing huge financial costs for such transfers which if not managed using mathematically proven methods can result in huge financial loss to the organization. Therefore, this study focuses on the application of transportation models to Shell Petroleum Development Company Operations in order to minimize cost incurred on transferring personnel from one location to the other.
In doing this, analyses of the four transportation models (North-West Corner Least cost, Vogels and Russel’s Approximation methods) are given highlighting areas of differences and similarities. Thereafter, Vogel’s approximation method is used to analyze the data collected. The modified distribution (MODI) and stepping stone methods are used to test optimality of the result of the Vogel’s method. Excel solver is also used to authenticate the optimal result.
Consequently, the optimal value of five million, two hundred and eighty-one thousand dollars ($5,281,000.00) only is obtained. This implies that given the information in Table 4.5, $5, 281,000.00 is the best least cost of transportation that the shell company could spend in a year period.
