A Hybrid Approach to Logistics Optimization: Combining DEMATEL with Classical Transportation Algorithms in the Steel Industry

Abstract

Transportation system is one of the major parts of the supply chain in an industry. Efficient route selection can substantially reduce both operational expenses and travel time. This study investigates the most efficient way for transporting raw materials from supply centers to warehouses, by calculating the total cost by different methods, such as Northwest Corner Method, Least Cost Method, and Vogel Approximation Method, for a renowned steel manufacturing company in Bangladesh. Further we identified the most significant factors that affect transportation, by applying the Decision Making Trial and Evaluation Laboratory (DEMATEL) method, which is one of the Multi-Criteria Decision-Making (MCDM) techniques. Expert opinions, in-depth data analysis, and data visualization provide a clear idea about the current situation of these circumstances. We found out the relationships between key criteria, such as cause effect factors, and how they impact each other in increasing the overall cost of the transportation process. Finally, we recommended some practical and applicable suggestions for solving the issues that hamper the transportation process most, for ensuring a smooth supply chain.