Research Journal of Recent Sciences _________________________________________________ ISSN 2277-2502 Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 119 Cutting logistics Costs with an Optimal distribution with Balancing approach and Cost minimization: A Case Study Model in one Producer-multiple Warehouses Condition in Supply chain management Kaveh Iravanazam*, Hasanmehrmanesh and Jalal haghighatmonfared Department of Industrial Management, Science and Research Branch, Islamic Azad University, Tehran, IRANAvailable online at: www.isca.in , www.isca.me Received 20th October 2013, revised 26th February 2014, accepted 21st May 2014Abstract Logistics as a part of supply chainis a process of creating value through scheduling and stock locating. Increasing competitive conditions in the market of goods and services supply and main advancements of communicative and IT industries have caused suppliers, producers and distributors to focus highly on logistics systems to decrease costs and improve customers’ services (providing the product in the right time and place for the customer). To this end, internal and external logistics costs (products` final distribution) and total cost in logistics system is a key factor to improve management performance. In the present study, it has been attempted to decrease total transport cost by selecting the appropriate capacity of transportation. Then, forkliftare optimally allocated to each department based on measured time per minute to do transport operations related to a transport cycle through each forklift in each department at assembly saloon. Afterwards, the most optimal transport channel of ingredient is determined by each forklift from two existing warehouses to assembly saloon using TOPSIS ranking method. Finally, the total expected distribution cost consisting the model`s target function is minimized using an optimal distribution model in one producer-multiple warehouses condition. Keywords: Logistics management, supply chain management, total transportation cost, vehicle allocation of transport, transport channel selection, topsis method. IntroductionAffordability and decreasing cots is the main reason of applying logistics in different organizations. However, the importance of logistics is not only due to its affordability but due the fact that it improves providing better services for customers. By better services, it is referred to more flexibility and speed. The firms of most countries have recognized the importance of logistics in a new competitive environment since decreasing logistics costs, as a part of total costs of each system, also plays a deterministic role in producing a high quality and low cost product as well as determining appropriate place in competitive market of organization. As the researches show, fifty percent of investigated firms have introduced logistics as their first or second preferences. Various researchers and authors have presented different attitude and definitions of supply chain. Followings are brief and comprehensive definitions can be provided for supply chain management. Generally, supply chain involves all activities related to goods change from extraction stage to delivery stage as well as information flows associated with them. Regarding commodity flow, there are two other flows including information and financial resources. Supply chain is the process of supplying ingredients, changing them into final products (through production) and delivering to customer (through distribution or delivering to retailers or both). Notably, supply chain is not connected to a simple and isolated chain consisted of some commercial elements but it is more a network consisting of a large number of members with complex relations. Supply chain management is defined by MIT as a process-oriented integration approach to provide ingredients and required items, goods production and delivery and customer services. According to Chopra and Mindel, supply chain includes all parts attempted to meet customer`s needs directly or indirectly. This definition involves some point which can be stated as follows Supply chain includes some various components that their operational nature has not legal nature necessarily. A supply chain is formed based on customer`s demand. In fact, customers` demand selected to be responded creates supply chain (its strategy and structure, activities type, and the way of implementation). Although customer`s demands are of importance for all the chain members, all of them cannot respond customer`s needs only. Many of chains` members are common in several supply chain and perform the activities which are not directly related with customer`s need in a certain Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 120 supply chain. Provided definition of supply chain involves the issues of information systems management, sourcing and supplies, production scheduling, orders processing, stock management, warehousing, and customer services. Here, some related works conducted regarding investigated topic are discussed. Asgari and Aghdasi proposed an integrated stock planning and transport model in supply chain management to minimize presented transport costs applied in a case study of Iran Khodro Company in which Iran Khodro companies and parts suppliers were the considered supply chain. The presented mathematical model was multi-objective seeking to minimize the cost of maintenance and buyer ordering, the transportation cost of buyer or supplier. Teymouri and Ghiami presented a model to determine the order point and optimal order size in two independent enterprises with respect to transportation costs10. They considered the costs of two independent non equal through a distribution channel as well as related transportation costs between these two members simultaneously11. The proposed model determines inventory policies to minimize total costs of system with respect to referred costs12. Ghazanfari and Seyed Hasani conducted a study on integration and minimization of total costs in logistics supply chain. Previous works focused only on the models of supply, production or distribution or a combination of both models13. But none of them investigated the relation among three models. It worth to investigate since costs integration reduces total costs14. Their research includes three models of supply, production and distribution and an integrated model integrating the systems of production and distribution15. Watanabe et al. presented a mathematical model to minimize transportation and inventory costs in a productive company with a multi-stage production in which time limitations for producing a part has been considered to the time of transport request16. Nozick and Turnquist conducted a case study in an automobile plant in which a mathematical model was proposed with respect to operations` integration attitude, transportation cost and inventory cost17. Another research conducted by Daski and Certer presented a model for supply-distribution system based on application of continuous functions to determine the cost of distribution and customer`s demand18. The above mentioned issue was modeled as fuzzy in the study of Nishaaki et al.19. Target function is as minimizing transportation cost, zero time or the number of vehicles. Main body: Logistics is a combination of orders, inventory, transportation, warehousing, and packaging materials over supply chain as a continuous process20. It plays the role of replacing and locating inventory to provide the access in right time and place as well as obtaining profit with the lowest total cost21. Logistics also is critical for supply chain efficiency and integration22. If the companies do not obey required appropriate time and place, there will be nothing to sell. This chain should be integrated to maximize profit since decision making for a certain section of this chain may affect costs of other sections23. Logistics activities include orders, purchasing, inventory control, facilities planning and transportation, warehousing, and packaging in supply chain system flowing in three stages of supply, production and distribution24. Suppliers, producers and distributors have focused on logistics systems to find a solution to reduce costs and improve customer services. To this end, internal and external logistics costs (products` final distribution) and total cost in logistics system is a key factor to improve management performance. Effective management of supply system and logistics distribution is impossible only through logistics organizing as a system and minimizing total cost of providing customer services25. Therefore, huge savings in costs, satisfying customer and increasing sale is the main features of logistics26. Accordingly, it is considered as a key factor to gain superiority in competitive market. So, it seems necessary to create an internal and external distribution model of logistics total cost27. The present study seeks to minimize logistics total costs in metal industrial company of Iran using total external logistics distribution and internal transport appropriate capacity. Notably, the present study is the first research aimed to use such model in such context. The research objectives: The research objective can be presented as the following: Decreasing the cost of internal supply logistics supply in metal industrial Company of Iran making use of transpiration capacity. Optimal allocation of transportation equipments for each department to decrease cycle time of internal supply transport in metal industrial Company of Iran. Determining the best channel of transporting ingredients fromwarehouse to assembly salon to decrease the distance and time of internal supply transport in metal industrial Company of Iran. Presenting a model to optimize and decreasing total expected cost of final products` distribution in logistics system in metal industrial Company of Iran Methodology Considering the fact that the data was gathered through studying documents (logistics engineering and management section of assembly salonconex), articles, theses, and various books; using observation and timing (stopwatch) methods; and using experts` Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 121 opinions, it can be said that the present research is an applied descriptive study using field and quantitative methods. It is a case study done in an Iranian metal industrial company investigating total cost of logistics distribution in official/administrative and research conex production in the company. There is no sampling and statistical population includes conex assembly salon of Iranian metal industrial company. Results and Discussion Computing the number of vehicles allocated to operators: After computing the standard times of transport cycle in each department, the number of Pallets transported in a working hour in each department is estimated. For example, if a Pallet is transported in an average time of 2/09 minutes in cutting department, the number of estimated Pallets to be transported during a working hour will equal with: The number of Pallets to be transported in cutting department during a working hour=  = 28/7 The number of Pallets to be transported in other departments has been computed in table-2. Then, having access to the information regarding the appropriateness the number of forklifts allocated to each department (table-1) and measuring the forklifts` time allocated to each department facilitating producing 1/125 conexes per day to fulfill commitment at the maximum time of 10 working day, can be computed as follow: The number of vehicles allocated to each department=  \n \r\n             \r     \r    ! For example, the number of forklifts allocated to cutting department operator is: The number of vehicles allocated to cutting department operator = "##$ = 0/63 The number of forklifts allocated to other departments operators have been presented in table-2. Computing total expected transportation cost: In this stage, with respect to operator`s hourly cost rate (15 dollars) and forklift`s hourly cost rate (45 dollars) per hour, the total expected transportation cost during working hour in each department for each Pallet can be computed as follow: The total expected transportation cost = %&'()*%(+ ,%(-. ()*'/0123'( %4 )--%5*'6 7'8,5,-'+ 94%(:-84*+ ,%1(-. ()*'! 0123'( %4 ;)--'*+ *% 3' ('&-)5'6 For example, in cutting department we have: The total expected transportation cost = /&#x-8.7;ã¡´? 9@! @$# 801 The expected cost of other departments has been shown in table-3. Table-1 Appropriateness of Pallets` transportation in each department Department`s name Cutting Welding Painting Installing wall, window and decorations appropriateness of Pallets` transportation in each department 0/31 0/21 0/2 0/28 Table-2 The number of vehicles allocated to operators in Department`s name Standard time of transportation cycle The number of estimated Pallets to be transported during 1 working hour The forklifts` observed time allocated to each department in 8 working time (minutes) The least transportation of Pallets` umber to satisfy receivable order per hour in each department The number of vehicles allocated to operators Cutting 2/09 28/71 302/4 18/04 0/63 Welding and grinding 3/2 18/75 312 12/22 0/65 Painting, pre-painting and de-fatting 3/2 18/75 297/6 11/64 0/62 Installing wall, window and decorations 2/82 21/28 369/6 16/29 0/77 Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 122 Table-3 Total expected transportation cost Department`s name The number of Pallets to be transported according to the production program to satisfy requested order The number of vehicles allocated to operators Operator`s hourly Forklift`s hourly rate Total expected transportation cost Cutting 18/04 63/0 5000 15000 801 Welding and grinding 12/22 65/0 5000 15000 1207 Painting, pre-painting and de-fatting 11/64 62/0 5000 15000 1228/5 Installing wall, window and decorations 16/29 0/77 5000 15000 1016 According to table-3, internal transportation`s total cost based on 10 working hours is: = 20000(6/31+6/55+6/24+7/69)8 = 4286400 Thus: C = 4286400 Decreasing total expected transportation considering the use of maximum observed transportation capacity: Now, cost is computed to use the maximum transportation capacity. Considering the fact that 52 pallets should be transported to produce each conex, 4680 Pallets are needed to be transported to produce 90 conexes. Considering the appropriateness mentioned in table-1 earlier, each department`s transportation can be illustrated as follow: Considering the number of Pallets which should be transported in a working day (8 hours) and the number of Pallets which should be transported to produce 90 conexes, the days leading to concluding project in each department has been presented in table-6. Table-4 Total expected transportation considering the use of maximum observed transportation capacity Department`s name The number of estimated Pallets to be transported during 1 working hour The number of vehicles allocated to operators Operator`s hourly Forklift`s hourly rate Total expected transportation cost Cutting 28/71 1 5000 15000 696/6 Welding and grinding 18/75 1 5000 15000 1066/6 Painting, pre-painting and de-fatting 18/75 1 5000 15000 1066/6 Installing wall, window and decorations 21/28 1 5000 15000 939/8 Table-5 Appropriateness of Pallets transportation in each department to produce 90 conexes Department`s nameCutting Welding and grinding Painting, pre-painting and de-fatting Installing wall, window and decorations appropriateness of Pallets in each department 1450/8 982/8 936 1310/4 Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 123 Therefore, internal transportation`s total cost can be stated as follow with respect to the use of maximum observed transportation capacity. = 20000(6/31+6/55+6/24+7/69)8 = 4286400 Thus: C = 4286400 Comparing C and C reveals that if the company`s production strategy is based on using appropriate transportation capacity, in addition to decreasing production tome up to 2-3 working day, transportation cost will be reduced up to 10/7%. Optimal allocation for each forklift to each department in assembly salon using Hungarian allocation method: All the computations were done based on allocations of first forklift to the first department, the second forklift to the second department, the third forklift to the third department, and the fourth forklift to the fourth department, now, the accuracy of all allocations should be revealed. Forklifts are allocated to each department optimally based on the measured timed (in minutes) to implement transportation operations related to a transportation cycle by each forklift in each department in assembly salon which has been presented in the following table. Therefore, it can be concluded that allocating forklift 1 to cutting department has been correct but other forklifts should have been allocated to other departments. So, primary allocation of forklifts to departments has not been appropriate. The following table indicates the appropriate allocation of forklifts. Table-6 The number of days to conclude production project Department`s name The number of estimated Pallets to be transported during 1 working hour The number of estimated Pallets to be transported during 8 working hours The number of Pallets required to produce 90 conexes The number of days to conclude production project Cutting 28/71 229/68 1450/8 6/31 Welding and grinding 18/75 150 982/8 6/55 Painting, pre-painting and de-fatting 18/75 150 936 6/24 Installing wall, window and decorations 21/28 170/24 1310/4 7/69 Table-7 The average transportation time (in minute) of ingredients to each department through each forklift in each transportation cycle Department ForkliftCutting Welding and grinding Painting, pre-painting and de-fatting Installing wall, window and decorations Number 1 09/2 1/3 9/2 1/3 Number 2 9/2 2/3 8/2 7/2 Number 3 7/2 9/2 2/3 3 Number4 8/2 3/3 6/2 82/2 The final result obtained from using Hungarian method is as follow: Table-8 Final result obtained from using Hungarian method Department Forklift Cutting Welding and grinding Painting, pre-painting and de-fatting Installing wall, window and decorations Number 1 0 81/0 81/0 01/1 Number 2 2/0 3/0 1/0 0 Number 3 0 0 5/0 3/0 Number 4 2/0 5/0 0 22/0 Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 124 Table-9 Optimal allocation of each forklift to each department Forklift no Department No 1 Cutting No 2 Welding and grinding No 3 Painting, pre-painting and de-fatting No 4 Installing wall, window and decorations Considering table-10 and comparing forklifts allocation to departments before and after implementing optimal allocation model, it can be concluded in table-10. According to table-11, the result of a conex production can provided the conclusion. For example, the time duration of 10/92 Pallets` transportation cycle to produce a conex in welding department before and after allocation is computed as follows: Before optimal allocation: 94/34 =92/10 2/3 After optimal allocation: 48/29 =92/10 7/2 According to table-12, production time of a conex can be reduced up to 8/24% (11/77 minutes). I other words, production will be ended 2/2 days earlier. Ranking transportation channels of ingredients from warehouse to assembly salon using TOPSIS method for a decision maker to determine the best transportation channel: To determine the most optimal transportation channel by existing forklift from two existing warehouse to assembly salon, three indices of distance, time and cost of transportation have been considered. With forming primary table of decision making, the best transportation channel is determined using TOPSIS ranking method. Table-10 The number of Pallets required to produce each conex Department`s nameCutting Welding Painting Installing wall, window and decorations appropriateness of Pallets in each department 16/12 10/92 10/4 14/5 Table-11 Comparison of transportation cycle duration before and after implementing Hungarian allocation model Department The amount of Pallet transported to produce a conex Transportation cycle duration of Pallet before optimal allocation Transportation cycle duration of Pallet after optimal allocation Cutting 16/12 2/09 2/09 Welding and grinding 10/92 3/2 2/7 Painting, pre-painting and de-fatting 10/4 3/2 2/9 Installing wall, window and decorations 14/5 2/82 2/6 Table-12 Comparison of the results before and after implementing Hungarian allocation model Department The amount of Pallet transported to produce a conex Transportation cycle duration of Pallet to produce a conex before optimal allocation Transportation cycle duration of Pallet to produce a conex after optimal allocation Cutting 16/12 33/69 33/69 Welding and grinding 10/92 34/94 29/48 Painting, pre-painting and de-fatting 10/4 33/28 30/16 Installing wall, window and decorations 14/5 40/89 37/7 Total 142/8 131/03 Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 125 Table-13 Primary table of decision making to determine the best transportation channel Index AlternativeDistance (m) Supply quality Time duration mean of a Pallet`s transportation (minute) First channel 53 Excellent 4 Second channel 76 Average 2/5 Third channel 43 3 This stage is implemented as follow: extracting decision matrix A 435/27653determining weights matrix: Entropy technique is used to determine weights matrix as follow: 31/033/025/026/024/044/042/043/031/0For example, row and column include: @@CDEFG A DEThen, matrix E(constant matrix) is obtained. KFE KFE KFNow, uncertainty matrix or deviation degree is computed. AENH  GK  GK  GO And weights matrix is extracted. Wj = Éj ÷ Éj Wj = [ 3450345/0/031 ] weighted matrix D can be obtained from matrix[dij] as follow: D =PQRSU9V , RS = XYYWXYX]^ 536/0567/0423/0447/0845/0747/0715/0722/0511/0For example, for d31: "@DCDFOD A GDSupposing W (theoretical weights matrix of indices), “weighted normalization V” can be obtained from matrix D as follow: n×n = W V = DWn×n 31/0345/0345/0536/0567/0423/0447/0845/0747/0715/0722/0511/0166/0195/0146/0138/0291/0257/0221/025/0176/0Ideal positive and ideal negative alternatives can be obtained as follow: Ideal positive alternative = abcdeRS g h iMjkl eRS fg hi!kA1, 2, …, moe MeMpMekQrcs lrtcukvr csurwlcukvrA axjkl eRSyg hi!Mjcd eRSfg hiykA1, 2, …, moe MeMpMe= {Min8@, Min8, Min8"} = {0/146, 0/291, 0/138} = {Max8@, Max8, Max8"} = {0/257, 0/195, 0/221} The distance of i alternative can be obtained using Euclidean method as follow: 1, 2… n =i,,xeRSNe }S~@ = n ....1 =i,,eRSNe !S~@ = EFCN EO GCN GKE GGEN ED A  KOK GFCN EO GKEN GKE EDN ED A EEE EON EO EKCN GKE EOON ED A E EFCN GFC GCN EKC GGEN GGE A  KO Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 126 GFCN GFC GKEN EKC EDN GG A EGO EON GCF EKCN EKC EOON GG A EGDORelative closeness of alternative to ideal solution is obtained s follow: cl = / 6 , 1 cl1 , i = 1, 2, …, m cl = / 6 $/$ A C cl = / 6 @$@@@/@$ A CDOcl = / 6 @"@ /@" CCGPrioritization of alternatives in descending order of cl: Table-14 Final ranking of transportation channels Alternative Rank First channel Third Second channel Second Third channel First According to table-14, the selected channel under optimal conditions (third channel) decreases the distance and time of each Pallet`s transportation as much as 10 meters and 1 minutes on average. Constructing logistics distribution model of conex`s assembly salon in Iranian metal industrial company: In the model, administrative- research conex ordered by 2 retailers is the final produced product (conex for 5 people and conex for 10 people) in assembly salon which is sent to two warehouses to be distributed after final quality control. The obtained information is presented as follow: Table-15 Required volume for retailer based on warehouse i and product j (yijk) Retailer`s need of warehouse 2 (i 2 ) Retailer`s need of warehouse 1 (i 1 ) Product Need of retailer 2 K2 Need of retailer 1 K1 Need of retailer 2 K2 Need of retailer 1 K1 10 10 10 10 Conex for 10 people (i 1 ) 15 10 10 15 Conex for 5 people (i 2 ) Table-16 Sum of retailer`s need based on warehouse i and product j Warehouse product Warehouse 1 Warehouse 2 Conex for 10 people (i 1 10 + 10 = 20 10 + 10 = 20 Conex for 5 people (i 2 15 + 10 = 25 15 + 10 = 25 Table-17 Transportation cost (billion Rials) of product j through transportation channel R and transportation vehicle M Warehouse 2 Warehouse 1 Transportation channel j2 j1 j2 j1 M2M1M2M1M2M1M2M1 Transportation cost Table-18 Maintenance cost (billion Rials) of product j in warehouse i Warehouse product Warehouse 1 Warehouse 2 j1 4 5 j2 3 3 Table-19 Capacity (area) of warehouses and products () Transportation vehicle type Fist type trailer (M 1 ) Second type trailer (M 2 ) 120 90 Constructing the model of conex`s logistics distribution planning in Iranian metal industrial company:Min Z = 6 1111 +6 X1121 +4 X1211 +4 X1221 +8 X2111 +6 X2121 +5 X2211 +4 2221 : . t s 10 X1111 +10 X1121 +6 X1211 +6 X1221 350 10 X2111 +10 X2121 +6 X2211 +6 X2221 350 1111 +X1121 20 1211 +X1221 25 2111 +X2121 20 2211 + X2221 25 Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 127 10 X1111 120 10 X1121 90 6 X1211 120 6 X1221 90 10 X2111 120 10 X2121 90 6 X2211 120 6 X2221 90 ijmr 0 , i = 1 , 2 , … , 4 Optimal values of conexes (final product) distribution which should be distributed according to each retailer`s request and order from each distribution warehouse to deliver final customer are obtained by solving above model. The obtained values have been present in table 21. Also, figure 1 indicates solving model using VINQS. Following results can be extracted from table-21: The amount of final distribution of 10 people conex from warehouse 1 and transportation channel 1 by transportation vehicle 1 is 12. The amount of final distribution of 10 people conex from warehouse 1 and transportation channel 1by transportation vehicle 2 is is 8. The amount of final distribution of 5 people conex from warehouse 1 and transportation channel 1 by transportation vehicle 1 is 20. The amount of final distribution of 5 people conex from warehouse 1 and transportation channel 1 by transportation vehicle 2 is 5. The amount of final distribution of 10 people conex from warehouse 2 and transportation channel 1 by transportation vehicle 1 is 11. The amount of final distribution of 10 people conex from warehouse 2 and transportation channel 1 by transportation vehicle 2 is 9. The amount of final distribution of 5 people conex from warehouse 2 and transportation channel 1 by transportation vehicle 1 is 10. The amount of final distribution of 5 people conex from warehouse 2 and transportation channel 1 by transportation vehicle 2 is 15. Comparing the results obtained from implementing the model of conex`s logistics distribution planning in Iranian metal industrial company: Here, the results obtained from implementing the model of conex`s logistics distribution planning in Iranian metal industrial company are compared to distribute final product and the distribution system performance during receiving order under similar conditions in terms of the number of orders are investigated. The results obtained from the comparison of values indicating expected total distribution cost of final product before and after implementing show that distribution costs are decreased up to 17%. Notably, variables coefficients in the row of objective function and final costs before and after implementing the model are in Toman. Table-21 Final distribution of products i 2 i 1Transportation vehicle Transportation channel 10 11 20 12 15 Table-22 Final distribution of product before implementing distribution model Warehouse 2 Warehouse 1 Transportation vehicle Transportation channel j2 j1 j2 j1 12 14 18 15 M1R1 13 M2 Distribution Cost = 15 x 6 x + 5 x 6 + 18 x 4 + 14 x 8 + 6 x 6 + 12 x 5 +13 x 4 = 480 Table-23 Final distribution of product after implementing distribution model Warehouse 2 Warehouse 1 Transportation vehicle Transportation channel j2 j1 j2 j1 10 11 20 12 M1R1 15 M2 Distribution Cost = 13 x 6 +8 x 6 x 20 x 4 + 5 x 4 + 11 x 8 + 9 x 6 + 10 x 5 + 15 x 4 = 402 Research Journal of Recent Sciences _____________________________________________________________ ISSN 2277-2502Vol. 4(7), 119-129, July (2015) Res.J.Recent Sci. International Science Congress Association 128 Figure-1 Solving model using VINQS Conclusion Considering the fact that optimal allocation of transport equipment for each department, distributive products, ingredients transport channels, and using appropriate transport capacity are of the most important factors interfering in logistics systems, the present study attempted to decrease total cost by selecting appropriate transport capacity28. Then, forklift are optimally allocated to each department based on measured time per minute to do transport operations related to a transport cycle through each forkliftin each department at assembly saloon. Afterwards, the most optimal transport channel of ingredient is determined by each forklift from two existing warehouses to assembly saloon using TOPSIS ranking method29. Finally, the total expected distribution cost consisting the model`s target function is minimized using an optimal distribution model in one producer-multiple warehouses condition. The followings are the results obtained from the study: With respect to increasing transport capacity in departments, in addition to decreasing order completion time in a maximum of 3 days, transport cost has also been decreased as much as 10/7%. By allocating forklifts optimally to each department using Hungarian method as well as comparing production times of a conex before and after optimal allocation, it is observed that time can be reduced as much as 8/24% (11/77 minutes) in a conex production time. In other words, time can be decreased as much as 1060 minutes (production is ended 2 days earlier). Also, selecting the most preferred transport channel (the third transport channel) decreases the distance and time as much as 10 meters and 1 minute for transporting each Pallet, averagely. 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