CHAPTER I

INTRODUCTION

Semirara Mining and power corporation is the largest producer of coal in the Philippines,

and the only power producer in the country that owns mines and fuel source. They operate the

largest and most modern pit of mine in the Philippines. While coal resources have been

discovered at four separate sites on semirara island, namely Panian, Bobog, Himalian and

Unong. The company operates one mine at Panian, one at bobog, one at himalian and one at

unong.

Coal is a fossilized fuel formed millions of years ago and made from the decomposition

of plants and other vegetation. It is organic matter comprised mostly of carbon, but also small

amounts of hydrogen, nitrogen and sulfur. Coal is a black or brownish-black sedimentary rock

mined from the earth as lumps. This hard substance is combustible and easily burns to produces

heat and ultimately electricity. Coal is the most abundant fuel available on Earth--there is almost

five times more than the amount of oil and natural gas combined. While coal is a great source of

fuel, it is also a great source of carbon dioxide, which is contributing to global warming.

Coal is generally carried out by conveyor or truck over short distances; trains or barges

for longer distances within domestic markets. For international transportation, ships are

commonly used. Transportation costs account for a large share of the total delivered price of

coal.

1
 STATEMENT OF THE PROBLEM
The main purpose of the study is to find the optimal solution for the minimum cost of

distribution of the coal that will cover by using LCM transportation method. The

mining/processing plants aim to find the minimum cost of transportation for the coal mined in

Panian, Bobog, Himalian and in Unong that will be distributed to three power plants.

SEMERARI COAL CAPACITY

COAL MINING
SITES
Panian 90

Bobog 50

Himalian 110

Unong 80

TABLE1.Tons of coal supplied per week

POWER PLANT SITES DEMAND

P1 120

P2 100

P3 110

Table 2. Tons of coal required to be distributed per week

2
 OBJECTIVES

Objectives of the Study

 To determine the minimum cost of transportation of coal from the plant sites to the

distribution center using LCM method.

 To solve the optimal solution for the given transportation problem

 To gain more knowledge in calculating transportation problem about LCM method.

SCOPE AND DELIMITATION

The study focuses mainly on finding the minimum cost of transportation in distribution of

coal in four different power plants. TheLeast Cost Transportation Method (LCM) is used in the

study to obtain the initial feasible solution. In comparison to other transportation methods, LCM

is considered to produce more optimal results because it considers the shipping cost while

making the allocation.

CHAPTER II

METHODOLOGY

Power Plant
Mining P1 P2 P3 Supply
Plant
A Panian 350 500 250 90
B Bobog 600 450 200 50
C Himalian 350 150 550 110
D Unong 450 250 350 80

3
Demand 120 100 110

Applying Least Common Method

 First we need to find the least value from all rows and columns.
 After finding the least common value we will put a box in the value that are minimum
and inside the box we will put which value of demand and supply is minimum.
 After putting the minimum value of demand or supply to the box we will have a zero
value either from the demand or supply by getting the difference of demand and supply.
 After getting the zero value of demand or supply we will disregard all the values it will
cover.
 After doing it we will get all the demand and supply equals to zero
 Finally all the corresponding values that have a box will multiply to the value inside the
box.

MINING
PLANT P1 P2 P3 SUPPLY
Panian
A 350 /500 250 90
Bobog
B 600 /450 200 50
100
C Himalian 350 0 /150 550 /110 10
D Unong 450 /250 350 80

DEMAND 120 /100 110

MINING
PLANT P1 P2 P3 SUPPLY
Panian
A 350 /500 250 90
Bobog 50
B /600 /450 /200 /50 0
100
C Himalian 350 /150 550 /110 10
Unong
D 450 /250 350 80

4
DEMAND 120 /100 110

0 60

By continuing the process:

MINING
PLANT P1 P2 P3 SUPPLY
Panian
30 60
A /350 /500 /250 /90 /30 0
Bobog 50
B /600 /450 /200 /50 0
Himalian 10 100
C /350 /150 /550 /110 /10 0
Unong
80
D /450 /250 /350 /80 0

DEMAND /120 /100 /110

/90 0 /60

/80 0

The minimum transportation cost is

30*350+60*250+50*200+10*350+100*150+80*450=P90000
SYNTHESIS
TRANSPORTATION
COST SUPPLY COST

PAP1 350 30 10500

PBP3 200 50 10000

PCP1 350 10 3500

PCP2 150 100

5
 15000

PDP1 450 80 36000

PAP3 250 60 15000

TOTAL 90000

The total minimum cost of transportation is P 90000. The breakdowns of transportation

cost are as follows; Mining Plant A to Power Plant 1 will cost P350 for 30 coal supply. Plant B

to Power Plant 3 will cost P200 for 30 coal supply. Plant C to Power Plant 1 will cost P350 for

10 coal supply. Plant C to Power Plant 2 will cost P150 for 100 coal supply. Plant D to Power

Plant1 will cost P450 for 80 coal supply. Lastly plant A to Power Plant 3 will cost P250 for 60

coal supply.

CHAPTER III

CONCLUSION

This study aim to find the minimum cost of transportation for the coal mined in Malangas

and Lalat ,Southern Cebu and Bataan Island that will be distributed to four power plants. Using

the LCM method (Least Common Method) it can often provide considerable time saving for the

distribution of mining company to the power plants. This research study would provide and give

additional ideas and information to the mining company and other companies on how to

determine the total minimum cost of the distribution of their products.

6
 RECOMMENDATION

For the future researchers it is the LCM method that we used to get the minimum cost of

transportation from the semirara company to the three power plants. It will be useful if the future

researcher will use other method and compare with this study.

REFERENCES

Frank L. Hitchcock
Journal of Mathematics and Physics
Volume 20, Issue 1-4, pages 224–230, April 1941
http://www.semiraramining.com/our_business