Application 2.

1
Consider the transportation of two items from two supply points to three destination
points. The availability in the two supply points are 8000, 6000, of item 1 and 10000 and
9000 of item 2. The requirements in the three destinations are 2000, 3000, 5000 of item 1
and 4000, 6000, 7000 of item 2. The distances among the facilities are given in Table 2.35
Table 2.35 Distances (in km)
D1
D2
D3
S1
240
180
265
S2
147
158
170
The transportation is carried out using two types of trucks with capacity 9 and 16 tonnes.
There is a fixed cost of Rs 5000 and Rs 10000 respectively for each truck of each type hired.
There is an additional cost of Rs 3/km travelled. Find the number of trucks of each type that
are used to transport the items at minimum total cost?
Let Xijk be the quantity of item k transported between supply point i and destination j.
Let nijl the number of trucks of type l used to transport between supply point i and
destination j.
The objective is to minimize the sum of fixed cost of hiring the trucks and the costs
associated with the distances. The objective is to
Minimize 5720n111 + 10720n112 + 5540n121 + 10540n122 + 5795n131 + 10795n132 + 5441n211 +
10441n212 + 5474n221 + 10474n222 + 5510n231 + 10510n232
Subject to
X111 + X121 + X131 8000
X112 + X122 + X132 10000
X211 + X221 + X231 6000
X212 + X222 + X232 9000
X111 + X211 = 2000
X112 + X212 = 4000
X121 + X221 = 3000
X122 + X222 = 6000
X131 + X231 = 5000
X132 + X232 = 7000
X111 + X112 9n111 + 16n112
X121 + X122 9n121 + 16n122
X131 + X132 9n131 + 16n132
X211 + X212 9n211 + 16n212
X221 + X222 9n221 + 16n222

X231 + X232 9n231 + 16n232

nijl 0 and integer; Xijk 0
The objective function minimizes the total cost of engaging the trucks. The coefficient 5720
for n111 is the sum of the fixed cost of 5000 per truck and the operating cost of 3 x 240 = 720
for the distance travelled. The first ten constraints are the supply and demand constraints
for the items. The next six constraints relate the number of trucks of each type to the
quantities transported between the supply and demand points.
The optimum solution to the mixed integer linear program is given by n 111 = n121 = n232 = 1;
X111 =2000, X121 = 3000, X112 = 4000, X122 = 6000, X231 = 5000, X232 = 7000. In the optimal
solution two 9 tonne trucks and one 16 tonne truck are used.

Application 2.2 Teacher assignment problem

There are six teachers available and the department offers 8 courses to students. The hours
of teaching required in the eight courses are 28, 28, 30, 20, 42, 36, 36 and 42. The hours
available with the six teachers during the teaching period are 60, 40, 80, 30, 50 and 60. Find
the hours of course i taught by teacher j such that the total number of distinct courses
taught is minimized?
Let Xij be the hours of subject i taught by teacher j. Let d ij = 1 if Xij > 0. The objective is to
8

Minimize

d
i 1 j 1

ij

Subject to
8

X
j 1

ij

hi

ij

bj

X
i 1

Xij Mdij
Xij 0, dij = 0,1
For the given example, the objective is to
Minimize d11 + d12 + d13 + d14 + d15 + d16 + d21 + d22 + d23 + d24 + d25 + d26 + d31 + d32 + d33 + d34
+ d35 + d36 + d41 + d42 + d43 + d44 + d45 + d46 + d51 + d52 + d53 + d54 + d55 + d56 + d61 + d62 + d63 +
d64 + d65 + d66 + d71 + d72 + d73 + d74 + d75 + d76 + d81 + d82 + d83 + d84 + d85 + d86
Subject to
X11 + X12 + X13 + X14+ X15+ X16 = 28

X21 + X22 + X23 + X24+ X25+ X26 = 28

X31 + X32 + X33 + X34+ X35+ X36 = 30
X41 + X42 + X43 + X44+ X45+ X46 = 20
X51 + X52 + X53 + X54+ X55+ X56 = 42
X61 + X62 + X63 + X64+ X65+ X66 = 36
X71 + X72 + X73 + X74+ X75+ X76 = 36
X81 + X82 + X83 + X84+ X85+ X86 = 42
X11 + X21 + X31 + X41+ X51+ X61 + X71 + X81 60
X12 + X22 + X32 + X42+ X52+ X62 + X72 + X82 40
X13 + X23 + X33 + X43+ X53+ X63 + X73 + X83 80
X14 + X24 + X34 + X44+ X54+ X64 + X74 + X84 30
X15 + X25 + X35 + X45+ X55+ X65 + X75 + X85 50
X16 + X26 + X36 + X46+ X56+ X66 + X76 + X86 60
Xij 1000dij
Xij 0, dij = 0,1
The optimum solution to the above problem is given by d 14 = d26 = d31 = d46 = d55 = d62 = d73 =
d83 = 1; X14 = X26 = 28, X62 = X73 = 36, X55 = X83 = 42, X31 = 30 and X46 = 20 with Z = 8 courses. In
this solution, two teachers teach two courses while the remaining four teach one course
each. Each course is fully assigned to one teacher. This is the most desirable situation and
the formulation provides this solution where a course is handled fully by a teacher (if such
an optimum solution exists).
If the available hours from the six teachers are 30, 40, 60, 30, 50 and 60, the optimum
solution is d14 = d25 = d31 = d45 = d53 = d56 = d62 = d76 = d83 = 1; X14 = X25 = 28, X62 = X76 = 36, X53
= 18, d56 = 24, X83 = 42, X31 = 30 and X45 = 20 with Z = 9 courses. Here one course is shared by
two teachers.
If we want to have minimum number of teachers teaching all courses together, we have a
formulation where Tj = 1 if teacher j is chosen and Xij = number of hours of course i taught
by teacher j. The objective is to
Minimize T1 + T2 + T3 + T4 + T5+ T6
Subject to
X11 + X12 + X13 + X14+ X15+ X16 = 28
X21 + X22 + X23 + X24+ X25+ X26 = 28
X31 + X32 + X33 + X34+ X35+ X36 = 30

X41 + X42 + X43 + X44+ X45+ X46 = 20

X51 + X52 + X53 + X54+ X55+ X56 = 42
X61 + X62 + X63 + X64+ X65+ X66 = 36
X71 + X72 + X73 + X74+ X75+ X76 = 36
X81 + X82 + X83 + X84+ X85+ X86 = 42
X11 + X21 + X31 + X41+ X51+ X61 + X71 + X81 60T1
X12 + X22 + X32 + X42+ X52+ X62 + X72 + X82 40T2
X13 + X23 + X33 + X43+ X53+ X63 + X73 + X83 80T3
X14 + X24 + X34 + X44+ X54+ X64 + X74 + X84 30T4
X15 + X25 + X35 + X45+ X55+ X65 + X75 + X85 50T5
X16 + X26 + X36 + X46+ X56+ X66 + X76 + X86 60T6
Xij 0; Tj = 0,1
The optimum solution to the problem is given by T1 = T2 = T3 = T5 = T6 = 1; X11 = 10, X16 = 18,
X22 = 28, X33 = 30, X43 = 20, X51 = 14, X53 = 28, X65 = 36, X71 = 36, X86 = 42 with Z = 5. With five
teachers we can offer all the eight courses. The above solution does not fully allocate a
course to a teacher where possible. For example there exists a solution T1 = T2 = T3 = T5 = T6
= 1; X11 = 28, X21 = 28, X32 = 30, X46 = 20, X55 = 42, X63 = 36, X76 = 36, X83 = 42 with Z = 5.
If we want to minimize the number of teachers considering that a full course be allotted to a
teacher, we define Xij to abe a binary variable. The problem is to
Minimize T1 + T2 + T3 + T4 + T5+ T6
Subject to
X11 + X12 + X13 + X14+ X15+ X16 = 1
X21 + X22 + X23 + X24+ X25+ X26 = 1
X31 + X32 + X33 + X34+ X35+ X36 = 1
X41 + X42 + X43 + X44+ X45+ X46 = 1
X51 + X52 + X53 + X54+ X55+ X56 = 1
X61 + X62 + X63 + X64+ X65+ X66 = 1
X71 + X72 + X73 + X74+ X75+ X76 = 1
X81 + X82 + X83 + X84+ X85+ X86 = 1
28X11 + 28X21 + 30X31 + 20X41+ 42X51+ 36X61 + 36X71 + 42X81 60T1
28X12 + 28X22 + 30X32 + 20X42+ 42X52+ 36X62 + 36X72 + 42X82 40T2
28X13 + 28X23 + 30X33 + 20X43+ 42X53+ 36X63 + 36X73 + 42X83 80T3
28X14 + 28X24 + 30X34 + 20X44+ 42X54+ 36X64 + 36X74 + 42X84 30T4
28X15 + 28X25 + 30X35 + 20X45+ 42X55+ 36X65 + 36X75 + 42X85 50T5
28X16 + 28X26 + 30X36 + 20X46+ 42X56+ 36X66 + 36X76 + 42X86 60T6
Xij, Tj = 0,1

The optimum solution is given by T1 = T2 = T3 = T5 = T6 = 1; X16 = X26 = X31 = X41 = X53 = X63 = X72
= X85 = 1 with Z = 5. Using five teachers we are able to assign eight courses such that each
course goes fully to one teacher.
Case : Lamps India
Lamps India makes three different types of automobile lamps (A to C). These are assembled
in a single assembly line that works five days a week for 8 hours a day. The demand for the
three lamps next four weeks is given in Table 2.36
Table 2.36 Demand for lamps
Lamp
Week 1
Week 2
A
250
220
B
120
180
C
180
100

Week 3
180
150
160

Week 4
480
240
180

It takes 4, 6 and 3 minutes to assemble the lamps of the three types. Every time a lamp type
is assembled, there is a set up time of 120 minutes. The company can work overtime for 1
day. The regular time cost is Re 1/minute and overtime cost is 50% more. The cost of
outsourcing is Rs 8, 12 and 7 for the three items per unit. The company can produce more
than the demand in a period and store it for further use. The cost of storage is Re
1/unit/period.
We formulate a binary IP to represent this situation: Let
Xij = Number of units of type i assembled during week j using regular time
Yij = Number of units of type i assembled during week j using overtime
Zij = Number of units of type i outsourced to meet demand of week j.
Iij = Number of units of type i held in inventory at the end of week j
Sij = 1 if item i is assembled in week j using regular time production
Tij = 1 if item i is assembled in week j using over time production
The objective function is to minimize the total cost which is the sum of the costs of regular
time production, overtime production, outsourcing and inventory.

Minimize
. Here r, o, b and v
represent the costs of regular time production, over time production, outsourcing and
holding inventory. For the given data, the objective function is to
Minimize
4X11+4X12+4X13+4X14+6X21+6X22+6X23+6X24+3X31+3X32+3X33+3X34+6Y11+6Y12+6Y13+6Y14+9Y21+
9Y22+
9Y23+9Y24+5Y31+5Y32+5Y33+5Y34+8Z11+8Z12+8Z13+8Z14+12Z21+12Z22+12Z23+12Z24+7Z31+7Z32+7Z
33+7Z34+I11+I12+I13+I21+I22+I23+I31+I32+I33
The first set of constraints is to meet the demand. The constraint is

. There are 12 constraints. The constraint for item 2,

period 4 is given by I23+X24+Y24+Z24=240. There is no inventory at the end of period 4.
The next sets of constraints are the capacity constraints, one for regular time capacity and

the other for over time capacity. These are

and

. There are four constraints each for regular time and over time
capacity.
The next sets of constraints relate the production to set up. These are
and
We have 12 constraints for the regular time production and 12 for the overtime
constraints.
The formulation has 69 variables out of which 24 are binary. There are 44 constraints. The
optimum solution to the binary IP is given by X11 = 250, X12 = 280, X14 = 405, X21 = 83.33, X22
= 173.33, X23 = 280, X31 = 180, X32 = 160, X34 = 180, Y13 = 120, Y14 = 75, Y21 = 60, Y32 = 100, Z24
= 93.33, S11 = S12 = S14 = S21 = S22 = S23 = S31 = S32 = S34 = T13 = T14 = T21 = T32 = 1, I12 = 60, I21 =
23.33, I22 = 16.66, I23 = 146.66 and total cost = 12096.66
The production quantities are given in Table 2.37
Table 2.37 Production quantities
Lamp Week 1
Week 2
A
250
280
B
83.33+60
173.33
C
180
160

Week 3
120
280
160

Week 4
405+75
93.33
180

We observe that the solution utilizes the entire regular time capacity available. It also uses
over time production on some days. Some inventory is stored for further use and some
quantity is outsourced to meet the increased demand of period 4. We observe that there
are 11 setups out of the possible 24.
We present a transportation formulation for the above situation. There are four periods and
in each period we have regular time capacity of 2400 minutes and over time capacity of 480
minutes. There are eight supply points considering the two modes of production for the four
periods. In addition, outsourcing is a supply where we assume that 10520 units of time
(which is the time required to produce the entire demand of three items for four weeks) is
available. There are nine supply points. There are twelve demand points considering the
three items and four weeks. The thirteenth column is the dummy column to balance the
total demand and total supply and this dummy demand is equal to 14400 time units (which
is the total available production capacities). We create a transportation problem, shown in
Table 2.38 with 9 rows (supplies) and 13 columns (demand points)
Table 2.38 Transportation table
1
1.25 1.5 1.75 1
1.5
1.75 2
2.25 1.5
M
1
1.25 1.5
M
M
1.5 1.75 2
M

1.25
1.75
1
1.5

1.5
2
1.25
1.75

1.75
2.25
1.5
2

1
1.5
M
M

1.25
1.75
1
1.5

1.5
2
1.25
1.75

1.75
2.25
1.5
2

0
0
0
0

2400
480
2400
480

M
M
M
M
2.11
1000

M
M
M
M
2.11
880

1
1.5
M
M
2.11
720

1.25
1.75
1
1.5
2.11
1920

M
M
M
M
2.11
720

M
M
M
M
2.11
1080

1
1.5
M
M
2.11
900

1.25
1.75
1
1.5
2.11
1440

M
M
M
M
2.11
540

M
M
M
M
2.11
300

1
1.5
M
M
2.11
480

1.25
1.75
1
1.5
2.11
540

0
0
0
0
0
14400

2400
480
2400
480
10520

The demands in the twelve columns are the time required to meet the actual demand of the
items. The values 1000, 880, 720 and 1920 represent the time to assemble 250, 220, 180
and 480 units of A (each requires 4 minutes). The costs associated with the transportation
problem are also shown in Table XX. The value C14 = 1.75 and this is the sum of the RT cost
of 1 and inventory for 3 periods = 1 + 0.25x3 = 1.75. The inventory cost per unit time is
approximated to 0.25. In the IP formulation we used an inventory cost of Re 1 per unit of
item. This would approximate to 0.25 per minute considering the assembly times. Similarly
the cost of outsourcing is approximated to 2.11 per minute considering the outsourcing cost
per unit for the three items. Therefore C9,1 = 2.11. The overtime cost is taken as 50% more
than the RT cost and is 1.5/minute. C24 = 2.25 = 1.5 + 3 x0.25.
From the optimum solution to the IP, we observe that there are 11 changeovers which have
consumed a total of 1320 minutes, since a changeover takes 120 minutes. We do not have a
way to include the set up or changeover times in the transportation formulation. We
therefore reduce the available capacities after subtracting some time for setups. We
approximate that 2 setups happen during regular time and one during overtime. The RT
capacity now becomes 2400 240 = 2160 and OT capacity becomes 480-120 = 360. The
total capacity is now 2520 x 4 = 10080. The supplies in the transportation table are changed
to 2160 and 360 from 2400 and 480. The dummy demand changes to 10080 from 14400.
The optimum solution to the transportation problem is given by
X11 = 1000, X15 = 620, X19 = 540, X25 = 100, X32 = 520, X33 = 260, X36 = 1080, X3,10 = 300, X42 =
360, X53 = 100, X54 = 140, X57 = 900, X5,11 = 480, X5,12 = 540, X63 = 360, X74 = 720, X78 = 1440,
X84 = 360, X94 = 700, X9,13 = 9820, X2,13 = 260, with objective function value = 12095
The values of Xij are time units as against production quantities in the IP formulation. We
now convert these into production quantities. We note that columns 1 to 4 represent the
demand for A for the four weeks and so on. These are given in Table 2.39
Table 2.39 Production quantities
Item
Week 1
Week 2
A
RT = 250
RT = 130+65
OT=90

Week 3
RT=25+35
OT=90

RT = 180

RT=150

RT=75

RT=160+180

RT = 105, OT =
25
RT = 180

Week 4
RT=180
OT=90, Outsourced =
175
RT=240, OT=60

We observe that the solutions obtained by the IP and by the transportation model are
different but the costs are almost equal. The transportation model has 16 set ups for all the
products over the four weeks. We had given provision for 12 setups when we reduced the

available RT and OT capacities. If we have to implement this solution, we need more

capacity because each set up consumes 120 minutes.
We run the transportation problem by giving provision for 16 changeovers by assuming that
3 changeovers happen during RT and one during OT. The RT and OT capacities are now 2040
and 360 respectively. The solution to the transportation problem is given by X 11 = 1000, X15
= 500, X19 = 540, X25 = 220, X32 = 520, X33 = 140, X36 = 1080, X3,10 = 300, X42 = 360, X53 = 220,
X57 = 900, X5,11 = 480, X5,12 = 440, X63 = 360, X74 = 500, X78 = 1440, X7,12 = 100, X84 = 360, X94 =
1060, X9,13 = 9460, X2,13 = 140, with objective function value = 12469.6.
The solution to the transportation problem is converted to units of production and is shown
in Table 2.40
Table 2.40 Units of production
Item
Week 1
Week 2
A
RT = 250
RT=130+35,
OT=90
B
RT=83.33,
RT=180
OT=36.66
C
RT=180
RT=100

Week 3
RT=55, OT=90
RT=150

Week 4
RT=125, OT=90
Outsourced = 265
RT=240

RT=160+146.66

RT=33.33

This solution has 15 changeovers and we have given provision for 16 changeovers in the
transportation model. The cost however is slightly higher than that of the IP optimum.
We observe that the main reason for the difference in the cost as well as in the allocation is
the changeover or set up time. The transportation formulation of the production planning
problem does not have the ability to consider changeovers or setups in the formulation. It
can give the same solution when the set up or changeover time is zero. When the set up
times are zero, the Sij and Tij variables become unnecessary in the IP formulation and this
becomes an LP formulation. We may define the outsourcing cost as Rs/unit time and in this
situation the reader can verify that the LP and the transportation solutions are the same.
In our IP and transportation formulations, we have considered setup or changeover time but
have not considered setup costs. The IP solution has a cost of 12096.66 and has 13 setups (9
during RT and 4 in OT). Each setup is for 120 minutes and if RT cost is Re 1/min and OT cost
is Rs 1.5/min, the additional set up cost would be Rs 1620 and the total cost would be Rs
13716.66
We now explicitly include the set up cost into the objective function. We add the terms
120S11+ 120S12+ 120S13+ 120S14+ 120S21+ 120S22+ 120S23+ 120S24+ 120S31+ 120S32+ 120S33+
120S34 + 180T11 +180T12+ 180T13+ 180T14+ 180T21+ 180T22+ 180T23+ 180T24+ 180T31+
180T32+ 180T33 + 180T34 to the objective function. The optimum solution to the IP is given by
X11 = 250, X12 = 270, X14 = 405, X22 = 180, X23 = 380, X31 = 386.66, X34 = 180, Y13 = 120, Z13 =
10, Z14 = 75, Z21 = 120, Z24 = 10, Z33 = 53.33, S11 = S12 = S14 = S22 = S23 = S31 = S34 = T13 = 1, and
total cost = 13706.66. In terms of total cost, it is only comparable to the solution which did
not consider the setup costs explicitly. The production quantities are shown in Table 2.41

Table 2.41 Production quantities

Item
Week 1
Week 2
A
RT = 250
RT=270

B
C

Outsourced =
120
RT=386.66

RT=180

Week 3
OT=120
Outsourced =
10
RT=380

Week 4
RT=405,
Outsourced = 75

Outsourced =
53.33

RT=180

Outsourced = 10

There are only 7 setups in this solution and more items are outsourced. We also observe
that the RT capacities used in the 4 weeks are 2400, 2400, 2400 and 2400 respectively but
fewer changeovers have happened. OT has not been used extensively.
In all the above formulations, we have not considered backordering. When the demands in
the beginning weeks are high, we can allow backordering so that production from a later
period can be used to meet the demand of an earlier period. We introduce variables B ij to
represent the quantity of item i backordered at period j. The objective function now
includes the backorder cost also. It is given by

Minimize
. Here, bi
represents the backorder cost for item i. The inventory balance constraints are now
rewritten. They become
. In our
formulation we define 9 variables representing the backordered quantities because the
fourth period would not include backorder.
The demand for the items is given in Table 2.42.
Table 2.42 Demand data
Lamp
Week 1
Week 2
A
480
220
B
240
180
C
180
100

Week 3
180
150
160

Week 4
250
120
180

The optimum solution to the IP is given below:

X11 = 400, X12 = 220, X13 = 180, X14 = 195, X22 = 213.33, X23 = 140, X24 = 120, X31 = 180, X33 =
160, X34 = 180, Y14 = 55, Y21 = 60, Y23 = 10, Y32 = 100, Z11 = 75, Z21 = 146.66, B21 = 33.33 and
total cost = 12286.66.
The production quantities are shown in Table 2.43
Table 2.43 Production quantities
Item
Week 1
Week 2
A
RT = 405
RT=220
Outsourced = 75
B
OT = 60
RT=213.33
Outsourced =

Week 3
RT=180

Week 4
RT=195, OT = 55

RT=140, OT =
10

RT = 120

146.66
RT=180

OT = 100

RT = 160

RT=180

From the solution in Table XX, it is observed that the total quantity produced and bought is
206.66 which is less than the demand of 240. There is a backorder of 33.33 which is
delivered in the second period, where the production is 213.33 and the demand is 180.
The reader may create a transportation solution considering backordering. In this, some of
the M values used in Table 2.38 will be replaced by b values.
Consider the demand data shown in Table 2.44

Table 2.44 Demand data

Lamp
Week 1
Week 2
A
500
440
B
240
360
C
360
200

Week 3
360
130
320

Week 4
960
480
360

Assume that there are two assembly lines and the capacities are the same for both the lines.
Formulate an IP and a transportation model for the above situation with and without setup
costs, times and backordering?