Distribution and Network Models

Transportation Problem Network Representation General LP Formulation Transshipment Problem Network Representation General LP Formulation Shortest route method Network Representation General LP Formulation

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Slide 1

Transportation, Assignment, and Transshipment Problems

A network model is one which can be represented by a set of nodes, a set of arcs, and functions (e.g. costs, supplies, demands, etc.) associated with the arcs and/or nodes. Transportation, assignment, transshipment, shortest-route, and maximal flow problems of this chapter as well as the minimal spanning tree and PERT/CPM problems (in others chapter) are all examples of network problems.

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Slide 2

Transportation, Assignment, and Transshipment Problems

Each of the five models of this chapter can be formulated as linear programs and solved by general purpose linear programming codes. For each of the five models, if the right-hand side of the linear programming formulations are all integers, the optimal solution will be in terms of integer values for the decision variables. However, there are many computer packages (including The Management Scientist) that contain separate computer codes for these models which take advantage of their network structure.

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Slide 3

Transportation Problem

The transportation problem seeks to minimize the total shipping costs of transporting goods from m origins (each with a supply si) to n destinations (each with a demand dj), when the unit shipping cost from an origin, i, to a destination, j, is cij. The network representation for a transportation problem with two sources and three destinations is given on the next slide.

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Slide 4

Transportation Problem

Network Representation 1 s1 1 d1

c11
c13 c21

c12 2 c22 3 d3 d2

s2

c23

Sources

Destinations
Slide 5

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Transportation Problem

Linear Programming Formulation Using the notation: xij = number of units shipped from origin i to destination j cij = cost per unit of shipping from origin i to destination j si = supply or capacity in units at origin i dj = demand in units at destination j continued

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Slide 6

Transportation Problem

Linear Programming Formulation (continued)

Min

c x

x
x
i 1

i 1 j 1 n

ij ij

j 1 m

ij

si
dj

i 1, 2,
j 1, 2,

,m
,n

Supply
Demand

ij

xij > 0 for all i and j

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Slide 7

Transportation Problem

LP Formulation Special Cases The objective is maximizing profit or revenue: Solve as a maximization problem.

Minimum shipping guarantee from i to j:

xij > Lij

Maximum route capacity from i to j:

xij < Lij

Unacceptable route:
Remove the corresponding decision variable.
2008 Thomson South-Western. All Rights Reserved Slide 8

Transshipment Problem

Transshipment problems are transportation problems in which a shipment may move through intermediate nodes (transshipment nodes)before reaching a particular destination node. Transshipment problems can be converted to larger transportation problems and solved by a special transportation program. Transshipment problems can also be solved by general purpose linear programming codes. The network representation for a transshipment problem with two sources, three intermediate nodes, and two destinations is shown on the next slide.

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Slide 9

Transshipment Problem

Network Representation

s1 Supply s2

c13
1

c36
c37
6

c15 c23
2

c14

d1 Demand

c46 c47 4 c56

5 7

c25

c24

d2

Sources

c57

Destinations

Intermediate Nodes
2008 Thomson South-Western. All Rights Reserved Slide 10

Transshipment Problem

Linear Programming Formulation Using the notation: xij = number of units shipped from node i to node j cij = cost per unit of shipping from node i to node j si = supply at origin node i dj = demand at destination node j continued

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Slide 11

Transshipment Problem

Linear Programming Formulation (continued)

Min

all arcs

cx

ij ij

s.t.

arcs out

xij

arcs in

ij

si

Origin nodes i

arcs out

xij
ij

arcs in

ij

Transhipment nodes

arcs in

arcs out

xij d j Destination nodes j

xij > 0 for all i and j

continued
2008 Thomson South-Western. All Rights Reserved Slide 12

Transshipment Problem

LP Formulation Special Cases Total supply not equal to total demand Maximization objective function Route capacities or route minimums Unacceptable routes The LP model modifications required here are identical to those required for the special cases in the transportation problem.

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Slide 13

Transshipment Problem: Example

The Northside and Southside facilities of Zeron Industries supply three firms (Zrox, Hewes, Rockrite) with customized shelving for its offices. They both order shelving from the same two manufacturers, Arnold Manufacturers and Supershelf, Inc. Currently weekly demands by the users are 50 for Zrox, 60 for Hewes, and 40 for Rockrite. Both Arnold and Supershelf can supply at most 75 units to its customers. Additional data is shown on the next slide.

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Slide 14

Transshipment Problem: Example

Because of long standing contracts based on past orders, unit costs from the manufacturers to the suppliers are:
Zeron N Arnold 5 Supershelf 7 Zeron S 8 4

The costs to install the shelving at the various locations are: Zrox Thomas 1 Washburn 3 Hewes Rockrite 5 8 4 4
Slide 15

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Transshipment Problem: Example

Network Representation
ZROX

Zrox

50

75

ARNOLD Arnold

5 8 7

Zeron N

5
Hewes HEWES

8 60
3
Zeron WASH BURN S

75

Super Shelf

4 4
RockRite

40
Slide 16

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Transshipment Problem: Example

Linear Programming Formulation Decision Variables Defined xij = amount shipped from manufacturer i to supplier j xjk = amount shipped from supplier j to customer k where i = 1 (Arnold), 2 (Supershelf) j = 3 (Zeron N), 4 (Zeron S) k = 5 (Zrox), 6 (Hewes), 7 (Rockrite) Objective Function Defined Minimize Overall Shipping Costs: Min 5x13 + 8x14 + 7x23 + 4x24 + 1x35 + 5x36 + 8x37 + 3x45 + 4x46 + 4x47
Slide 17

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Transshipment Problem: Example

Constraints Defined Amount Out of Arnold: Amount Out of Supershelf: Amount Through Zeron N: Amount Through Zeron S: Amount Into Zrox: Amount Into Hewes: Amount Into Rockrite:

x13 + x14 < 75 x23 + x24 < 75 x13 + x23 - x35 - x36 - x37 = 0 x14 + x24 - x45 - x46 - x47 = 0 x35 + x45 = 50 x36 + x46 = 60 x37 + x47 = 40

Non-negativity of Variables: xij > 0, for all i and j.

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Slide 18

Transshipment Problem: Example

The Management Scientist Solution

Objective Function Value = Variable
X13 X14 X23 X24 X35 X36 X37 X45 X46 X47

1150.000 Reduced Costs

0.000 2.000 4.000 0.000 0.000 0.000 3.000 3.000 0.000 0.000
Slide 19

Value
75.000 0.000 0.000 75.000 50.000 25.000 0.000 0.000 35.000 40.000

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Transshipment Problem: Example

Solution
ZROX

Zrox

50

75

ARNOLD Arnold

5 8 7

75

Zeron N

1 8

5
Hewes HEWES

60

3 4
Zeron WASH BURN S

75

Super Shelf

RockRite

40
Slide 20

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Transshipment Problem: Example

The Management Scientist Solution (continued)

Constraint 1 2 3 4 5 6 7 Slack/Surplus 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Dual Prices 0.000 2.000 -5.000 -6.000 -6.000 -10.000 -10.000

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Slide 21

Transshipment Problem: Example

The Management Scientist Solution (continued)

OBJECTIVE COEFFICIENT RANGES Variable Lower Limit Current Value Upper Limit
X13 X14 X23 X24 X35 X36 X37 X45 X46 X47 3.000 6.000 3.000 No Limit No Limit 3.000 5.000 0.000 2.000 No Limit 5.000 8.000 7.000 4.000 1.000 5.000 8.000 3.000 4.000 4.000 7.000 No Limit No Limit 6.000 4.000 7.000 No Limit No Limit 6.000 7.000
Slide 22

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Transshipment Problem: Example

The Management Scientist Solution (continued)

RIGHT HAND SIDE RANGES Constraint 1 2 3 4 5 6 7 Lower Limit 75.000 75.000 -75.000 -25.000 0.000 35.000 15.000 Current Value Upper Limit 75.000 No Limit 75.000 100.000 0.000 0.000 0.000 0.000 50.000 50.000 60.000 60.000 40.000 40.000

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Slide 23

Shortest-Route Problem

The shortest-route problem is concerned with finding the shortest path in a network from one node (or set of nodes) to another node (or set of nodes). If all arcs in the network have nonnegative values then a labeling algorithm can be used to find the shortest paths from a particular node to all other nodes in the network. The criterion to be minimized in the shortest-route problem is not limited to distance even though the term "shortest" is used in describing the procedure. Other criteria include time and cost. (Neither time nor cost are necessarily linearly related to distance.)

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Slide 24

Shortest-Route Problem

Linear Programming Formulation Using the notation:

xij =

1 if the arc from node i to node j is on the shortest route 0 otherwise

cij = distance, time, or cost associated with the arc from node i to node j continued

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Slide 25

Shortest-Route Problem

Linear Programming Formulation (continued)

Min

all arcs

cx
xij

ij ij

s.t.

arcs out

1 Origin node i

arcs out

xij

arcs in

ij

Transhipment nodes

arcs in

ij

1 Destination node j

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Slide 26

Example: Shortest Route

Susan Winslow has an important business meeting in Paducah this evening. She has a number of alternate routes by which she can travel from the company headquarters in Lewisburg to Paducah. The network of alternate routes and their respective travel time, ticket cost, and transport mode appear on the next two slides. If Susan earns a wage of $15 per hour, what route should she take to minimize the total travel cost?

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Slide 27

Example: Shortest Route

Network Model 2
A
K F

5
L G

C D E

3
H

1 Lewisburg

6
I

Paducah

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Slide 28

Example: Shortest Route

Route A B C D E F G H I J K L M

Transport Mode Train Plane Bus Taxi Train Bus Bus Taxi Train Bus Taxi Train Bus

Time (hours) 4 1 2 6 3 1/3 3 4 2/3 1 2 1/3 6 1/3 3 1/3 1 1/3 4 2/3

Ticket Cost $ 20 $115 $ 10 $ 90 $ 30 $ 15 $ 20 $ 15 $ 15 $ 25 $ 50 $ 10 $ 20

Slide 29

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Example: Shortest Route

Route A B C D E F G H I J K L M

Transport Mode Train Plane Bus Taxi Train Bus Bus Taxi Train Bus Taxi Train Bus

Time (hours) 4 1 2 6 3 1/3 3 4 2/3 1 2 1/3 6 1/3 3 1/3 1 1/3 4 2/3

Time Cost $60 $15 $30 $90 $50 $45 $70 $15 $35 $95 $50 $20 $70

Ticket Cost $ 20 $115 $ 10 $ 90 $ 30 $ 15 $ 20 $ 15 $ 15 $ 25 $ 50 $ 10 $ 20

Total Cost $ 80 $130 $ 40 $180 $ 80 $ 60 $ 90 $ 30 $ 50 $120 $100 $ 30 $ 90

Slide 30

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Example: Shortest Route

LP Formulation Objective Function Min 80x12 + 40x13 + 80x14 + 130x15 + 180x16 + 60x25 + 100x26 + 30x34 + 90x35 + 120x36 + 30x43 + 50x45 + 90x46 + 60x52 + 90x53 + 50x54 + 30x56

Node Flow-Conservation Constraints

x12 + x13 + x14 + x15 + x16 = 1 (origin) x12 + x25 + x26 x52 = 0 (node 2) x13 + x34 + x35 + x36 x43 x53 = 0 (node 3) x14 x34 + x43 + x45 + x46 x54 = 0 (node 4) x15 x25 x35 x45 + x52 + x53 + x54 + x56 = 0 (node 5) x16 + x26 + x36 + x46 + x56 = 1 (destination)
2008 Thomson South-Western. All Rights Reserved Slide 31

Example: Shortest Route

Solution Summary Minimum total cost = $150 x12 = 0 x13 = 1 x14 = 0 x15 = 0 x16 = 0 x25 = 0 x26 = 0 x34 = 1 x35 = 0 x36 = 0 x43 = 0 x45 = 1 x46 = 0 x52 = 0 x53 = 0 x54 = 0 x56 = 1

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Slide 32

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Slide 33