Cost Optimization in a Distribution System (A Case Study of The Seven-Up Bottling Company Plc, Aba, Abia State)

ABSTRACT

This study sought to optimize the cost of distribution system of consumer goods in Nigeria with special interest in Seven-Up Bottling Company PLC, Aba Abia State products from their five (5) depots to sixteen (16) wholesale dealers. Sources of distribution were identified as the depots, while destinations or markets were identified as wholesale dealers with a view to determining the shortest route that minimized the cost of transportation from the depots to the wholesale dealers. The literature reviewed showed that transportation model could improve the shipment route at minimal cost. The study employed descriptive research design of which secondary data were collected from the records of distribution department of the company and the data collected were computed and analyzed with TORA State incurs cost following the distribution of their products from depots to their respective markets to a large extent increases the price of the product and therefore concludes that transportation model is an indispensable tool that could improve the cost efficiency required in the distribution net-work. It is against this background that the study recommends that seven-up bottling company and other manufacturing or producing firm should adopt this model as a tool in order to minimize cost of transportation by identifying the most efficient route.