12 Transportation Model LP

Lesson 12 The Transportation Model
An Application of Linear Programming
12 - 1
The Problem
Minimize transportation costs between Supplying Locations (Factories) and Demand Locations (Warehouses).
Demand Location B
Demand Location A
Supply Location 3
Supply Location 2 Supply Location 1 Demand Location D

12 - 2
Demand Location C
The Cost Matrix

The transportation cost per unit between Factory and Warehouse are shown in the cost matrix table below:
Factory 1 2 3
A 4 12 8
Warehouse B C 7 7 3 8 10 16
D 1 8 5
The transportation cost to ship 1 unit of product between Factory 1 and Warehouse A is 4.
12 - 3
Factory Capacity & Warehouse Demand

The factory capacity (supply units per period) and the warehouse demand (units per period that can be handled) are shown in the following tables:
Factory Supply 1 100 2 200 3 150 Total 450

D Total 160 450
12 - 4
A Demand 80
Warehouse B C 90 120
Summary Matrix
The three previous tables can be summarized in one matrix as follows:
Factory 1 2 3 Demand
A 4 12 8 80
Warehouse B C D Supply 7 7 1 100 3 8 8 200 Total 10 16 5 150 Supply 90 120 160 450 Total Demand 450
12 - 5
An Optimal Solution
Once the initial allocation is made, there are methods for obtaining an optimal solution which involve still further steps - these are discussed in the section Testing for Optimalitypages 393 though 405. Although, the manual solution to the transportation model is relatively straightforward, it is time consuming. The transportation model can also be optimally solved by Linear Programming.
12 - 6
The LP Formulation
let x i, j minimize
A 4 12 8 80
be the quantity shipped from factory i to warehouse j 4x1,A 7x1,B 7x1,C 1x1,D 12x2,A 3x2,B 8x2,C 8x2,D 8x3,A 10x3,B 16x3,C 5x3,D
12 - 7
The LP Formulation
. Supply Constraints (rows)
subject to
x1,A x1,B x1,C x1,D 100 x2,A x2,B x2,C x2,D 200 x3,A x3,B x3,C x3,D 150
. Demand Constraints (columns)
subject to
x1,A x2,A x3,A 80 x1,B x2,B x3,B 90 x1,C x2,C x3,C 120 x1,D x2,D x3,D 160
12 - 8
12 - 9
Transportation LP
Enter Transportation LP formulation in green cells
12 - 10
Transportation LP
Tools, Solver, Solve Calculates the LP solution.
The total cost of the optimum solution is 2,300. Shipments are: from supplier 1 send 10 to receiver C, 90 to receiver D
from supplier 2 send 90 to receiver B, 110 to receiver C

from supplier 3 send 80 to receiver A
12 - 11
Unequal Supply & Demand

Consider the following situation showing cost per unit between supply and demand (receiving) location where the supply and the demand are unequal.
Demand Supply 1 2 A 9 5 80 Total Demand B 6 3 90 170 Supply 75 75 Total Supply 150
In this case the ability of the demand (receiving) locations is 20 more than the supply locations.
12 - 12
Unequal Supply & Demand

In this case we must balance the supply and demand by introducing a Dummy Supply Location for 20 units.
Supply 1 2 Dummy A 9 5 80 Total Demand Demand B 6 3 90 170 Supply 75 75 20 Total Supply 170
Note: No cost is entered for the Dummy location. Now, the problem can be solved using the Linear Programming solution for the Transportation Problem as shown on the next slide.
12 - 13
Transportation LP
12 - 14
Evaluating Alternatives
Example: A company that specializes in nonferrous casting currently has 3 Warehouses (receiving locations) and two casting foundry factories (supply locations). The shipping cost, factory capacity and warehouse capacity are summarized in the following table.
Warehouse Foundry 1 2 Demand A 17 7 25 Total Demand B 10 12 10 C 6 14 40 75 Total Supply 50 Supply 30 20
12 - 15
Business conditions have been good and the company will build a new foundry to meet future business requirements. They are considering 2 locations: Chicago and Detroit. The new foundry will be designed to produce 2,500 nonferrous casts per month. The new foundry will be shipping their product to the current warehouses. The accounting department has determined the shipping costs from Detroit and Chicago to the existing warehouses and summarized them in the table below:
Warehouse New Foundry Detroit Chicago A 10 12 B 8 13 C 15 5
Which location should they choose? Detroit or Chicago?
12 - 16
To answer this question we must consider the Transportation Problem Solution for both Detroit and Chicago then evaluate the results: Detroit Transportation Problem
Warehouse Supply Factory Demand 1 2 Detroit Demand A 17 7 10 25 Total Demand B 10 12 8 10 C 6 14 15 40 75 Supply 30 20 25 Total Supply 75
12 - 17
Detroit Solution
Warehouse Supply Factory Demand 1 2 Detroit Demand A 0 20 5 25 Total Demand 600
12 - 18
B 0 0 10 10
C 30 0 10 40 75
Supply 30 20 25 Total Supply 75
Total Cost
Chicago Transportation Problem

Warehouse Supply Factory Demand 1 2 Chicago Demand A 17 7 12 25 Total Demand B 10 12 13 10 C 6 14 5 40 75 Supply 30 20 25 Total Supply 75
12 - 19
Best Chicago Solution
Warehouse Supply Factory Demand 1 2 Chicago Demand A 17 7 12 25 Total Demand 520
12 - 20
B 10 12 13 10
C 6 14 5 40 75
Supply 30 20 25 Total Supply 75
Total Cost
Homework
Read and understand all material in the chapter. Discussion and Review Questions Recreate and understand all classroom examples Exercises on chapter web page
12 - 21
Appendix: A Heuristic Solution

A heuristic (intuitive) argument can be made for the solution to this problem. It follows the steps below:
. Identify the cell with the lowest cost . Allocate as many units as possible to that cell and cross out the row or column (or both) that is exhausted by this assignment . Find the cell with the next lowest cost from among the feasible cells . Repeat the second and third steps until all units have been allocated
12 - 22
A Heuristic Solution
Lets take a look at how the heuristic is applied to this problem . Identify the cell with the lowest cost
A 4 12 8 80
12 - 23
. Allocate as many units as possible to that cell
A 4 12 8 80
Warehouse B C D Supply 7 7 100/1 100 3 8 8 200 Total 10 16 5 150 Supply 90 120 160 450 Total Demand 450
12 - 24
. And cross out the row or column (or both) that is exhausted by this assignment
A 4 12 8 80
12 - 25
. Find the cell with the next lowest cost from among the feasible cells
A 4 12 8 80
12 - 26
A 4 12 8 80
Warehouse B C D Supply 7 7 100/1 100 90/3 8 8 200 Total 10 16 5 150 Supply 90 120 160 450 Total Demand 450
12 - 27
A 4 12 8 80
12 - 28
A 4 12 8 80
12 - 29
A 4 12 8 80
Warehouse B C D Supply 7 7 100/1 100 90/3 8 8 200 Total 10 16 60/5 150 Supply 90 120 160 450 Total Demand 450
12 - 30
A 4 12 8 80
12 - 31
. Find the cell with the next lowest cost from among the feasible cells In this case there is a tie choose one arbitrarily.
A 4 12 8 80
12 - 32
A 4 12 80/8 80
12 - 33
A 4 12 80/8 80
12 - 34
A 4 12 80/8 80
12 - 35
A 4 12 80/8 80
Warehouse B C D Supply 7 7 100/1 100 90/3 110/8 8 200 Total 10 16 60/5 150 Supply 90 120 160 450 Total Demand 450
12 - 36
A 4 12 80/8 80
12 - 37
A 4 12 80/8 80
12 - 38
A 4 12 80/8 80
Warehouse B C D Supply 7 7 100/1 100 90/3 110/8 8 200 Total 10 10/16 60/5 150 Supply 90 120 160 450 Total Demand 450
12 - 39
. And cross out the row or column (or both) that is exhausted by this assignment The distribution cost is 80*8 + 90*3 + 110*8 + 10*16 +100*1 + 60*5 = 2,350 per unit
A 4 12 80/8 80
Warehouse B C D Supply 7 7 100/1 100 90/3 110/8 8 200 Total 10 10/16 60/5 150 Supply 90 120 160 450 Total Demand 450
12 - 40
Heuristic vs LP Solution
The Heuristic Solution Cost = 2,350
Factory 1 2 3 Demand A 4 12 80/8 80 Warehouse B C D Supply 7 7 100/1 100 90/3 110/8 8 200 Total 10 10/16 60/5 150 Supply 90 120 160 450 Total Demand 450 Warehouse B C D Supply 7 10/7 90/1 100 90/3 110/8 8 200 Total 10 16 70/5 150 Supply 90 120 160 450 Total Demand 450
12 - 41
The Linear Programming Optimum Solution Cost = 2,300

Factory 1 2 3 Demand A 4 12 80/8 80

12 Transportation Model LP

Uploaded by

Copyright:

Available Formats

12 Transportation Model LP

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

12 Transportation Model LP

Uploaded by

Copyright:

Available Formats

Lesson 12 The Transportation Model

An Application of Linear Programming

Supply Location 2 Supply Location 1 Demand Location D

The Cost Matrix

Factory Capacity & Warehouse Demand

Factory Supply 1 100 2 200 3 150 Total 450

. Demand Constraints (columns)

Enter Transportation LP formulation in green cells

Tools, Solver, Solve Calculates the LP solution.

from supplier 2 send 90 to receiver B, 110 to receiver C

Unequal Supply & Demand

Unequal Supply & Demand

Which location should they choose? Detroit or Chicago?

Supply 30 20 25 Total Supply 75

Chicago Transportation Problem

Supply 30 20 25 Total Supply 75

Appendix: A Heuristic Solution

The Linear Programming Optimum Solution Cost = 2,300

You might also like