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Network Design PDF
Network Design PDF
Design
Donglei Du
(ddu@unb.edu)
1 Introduction
The Logistics Network
Major Steps in Network Design
Introduction
$90 Optimal
$80
Number
of Warehouses
$70
Cost (millions $)
$60
Total Cost
$50 Transportation Cost
$40 Fixed Cost
Inventory Cost
$30
$20
$10
$-
0 2 4 6 8 10
Number of Warehouses
1200,000
cost
800,000
annual flow
inventory turnover ratio =
average inventory level
3 The warehouse capacity is given by
Once the data are collected and cleaned, we need to ensure that
the data and model accurately reflect the network design
problem.
This is typically done by reconstructing the existing network
configuration using the model and collected data, and comparing
the output of the model to existing data. The purpose is to
answer the following questions:
Does the model make sense?
Are the data consistent?
Can the model results be fully explained?
Did you perform sensitivity analysis?
Once the data are collected, cleaned, and verified, the next step
is to optimize the configuration of the logistics networks. In
practice, two techniques are employed:
Mathematical optimization techniques, including
Exact algorithms: find optimal solutions
Heuristics: find ”good” solutions, not necessarily optimal
Simulation models that provide a mechanism to evaluate
specified design alternatives created by the designer.
1 7 1 f1 = 3
5
2
2
I 0 2 f 2 = 10 J
3 4
0
0
4 2 3 f3 = 6
1 7 1 f1 = 3
2
0
3
0
4 2 3 f3 = 6
Total cost = (3 + 6) + (7 + 0 + 0 + 2) = 18
Single product.
Twp plants, referred to p1 and p2 .
Plant p2 has an annual capacity of 60,000 units, while p1 has an
unlimited capacity.
The two plants have the same production costs.
Two existing warehouses, referred to w1 and w2 , have identical
warehouse handling costs.
Three market areas, c1 c2 and c3 , with demands of 50,000,
100,000, and 50,000, respectively.
p 1 p 1 c1 c2 c3
w1 0 4 3 4 5
w1 5 2 2 1 2
c1 50,000
xw1c1
x p1w1 3 xw2c1
f p1 w1 xw1c2 2
0
4
xw2c2 c2 100,000
x p2 w1 x p1w2
4 5 1
x p2 w2
60,000 p2 w2
2 xw c
xw1c3 5 1 3
2
c3
50,000
fuv ≤ cuv .
max F (1)
X X F, i = s
fij − fji = 0, ∀i 6= s, t (2)
−F, i = t
j∈δi+ j∈δi−
xp ≥ 0, ∀p ∈ P (6)
forward arcs
cij
S M S
backward arcs
S = S ∪ {j}, S̄ = S̄ − {j}.
3
2 4
2 1
4
s 1 6 t
4
8 5
3 5
2
(0,4) (0,4)
(0,8) (0,5) (0,8) (0,5)
3 5 3 5
(0,2) (0,2)
( 2 + ,4 )
(0,4) (0,4)
(0,8) (1,5) (0,8) (1,5)
3 5 3 5
(0,2)
(0,2) ( s + ,8) (3+ ,2)
(1,1) 2 4
( 2,2)
(1,4) ( 2,2) (1,1)
(1,4)
s t ( −, ∞ ) s t (5+ ,2)
(0,4) (0,4)
( 2,8) (3,5) ( 2,8) (3,5)
3 5 3 5
( 2,2) ( 2,2)
( s + ,6) ( 2 + ,3)
(1,4) (1,4)
(3,8) (4,5) (3,8) (4,5)
5 3 5
3 ( 2,2) ( 2,2)
( s + ,6) ( 2 + ,3)
Offline version
π Step1.(Sorting)
R 1 2 3 4 5
π 4 ≥ π 3 = 8 ≥ π 5 ≥ π 2 = 7 ≥ π1 = 4
1 0 2 1 3 4 4 Step 2.(Peeling)
2 2 0 3 6 7 7 (1)peeling 4 :4,4,3,3,0
3 1 3 0 8 2 8 (2)peeling 3:1,1,0,0
4 3 6 8 0 5 8 (3)peeling1:0,0
Step 3.(Superposing)
5 4 7 2 5 0 7
1 34
¦π i = 2 = 17
1 2 1
2 2 2 2
5 1.5
2 ⇐ 5 1.5
2
3.5 3.5 1.5 1.5
2 2
1.5
4 4.5 3 4 1 3
2
Online version
~ G
G
x rxy
y
c13 c23
Step 2:c13 + c23 ≥ 1
c14 c24 3