Abstract: This research aims to minimize the cost of cigarette distribution on the company
Sumber Djaja. The company SumberDjaja is a cigarette company orientated to the lower
middle market. The problems being faced by the company SumberDjaja is the high cost of
distributing products. This happens because their regular pattern of distribution from factory to
the market. Based on the problems above, the transportation analysis done for the optimal
allocation of the product so as to obtain optimum shipping costs. The stages of the
transportation analysis was by forecast sales in June 2014 use linear trend forecasting model.
The prediction tested by Signal Tracking and the data processing used the method of Vogel
aproximation Method (VAM), and the optimized was by Modified Distribution Method (MODI).
The results of data processing was the optimal solutions obtained using the Modified
Distribution Method (MODI) with a total shipping cost of Rp. 13.2048 million, - with savings of
Rp. 1.7968 million, - of the cost of previously conducted simulation analysis or calculation of
the real cost of transportation of the company Rp. 15.0016 million, - Thus this method of
transportation can be done by the company to minimizing distribution costs.
Keywords: cost minimization, cost distribution, cigarette, pr.sumber djaja
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