A Study on Transportation Optimization and Efficient Production Method of Raw Materials for Pellet for Construction of Supply Chain Management

Abstract

Abstract This study designed a model of the efficient production schemes and raw materials transportation optimization of current South Korean’s simple and monolithic distribution system of wood to build a SCM (supply chain management) as a basic level to establish a distribution of future by pellet production of raw materials costs and reduce transport costs, and specifically to forest of pallet to contribute to revitalizing the market. The result of each transportation costs after building the best transportation network from raw material supply area to demand area applying transport law was 964,600 thousands Won from 6 supply areas to 7 demand areas. And the result of each model’s analysis to get the pellet’s efficient production through production cost reduction showed that it reduced from 325,701 Won/t to 240,106 Won/t, results of existing efficient pellet for the production model 8,233 tons over 20,000 tons annual production capacity from the size of the expanded production capacity when the expansion. However, when the production size expanded to 50,000 Tons of the production, the effect was very small even though production cost decreased.Key Words: SCM, pellet, transportation network, transportation optimization, operation research