Lecture 5 Transportation Class Notes

9/30/2018
Network Flow Problem
• A network flow problem is one which can be
represented by
Network models – a set of nodes (supply and demand),
– a set of arcs which

connects the nodes (route),
– associated functions e.g. costs, time, etc.
Copyright © 2018 – Ripon Paul, FMS | 8102: Quantitative Methods for Management | Jul - Nov 2018 Session, Copyright © 2018 – Ripon Paul, FMS | 8102: Quantitative Methods for Management | Jul - Nov 2018 Session,
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Types of nodes and Flow Balance Network Flow Problem

• Origin nodes Consist of a network that can be represented with
• Destination nodes nodes and arcs
• Transshipment nodes 1. Transportation Model
Flow balance 2. Transshipment Model
(total inflow)
inflo ) – (total o
outflow)
tflo ) = Net flo
flow 3 Assignment Model
3.
4. Maximal Flow Model
Node Type Net Flow 5. Shortest Path Model
Origin <0 6. Minimal Spanning Tree Model
Destination >0
Transshipment =0
Transportation Problem
Transportation Problem Transportation Problem
• The basic transportation problem was developed by • Can be formulated as linear programs and solved by general
F.L.Hitchcock in 1941. purpose linear programming Algorithms (simplex method).
• More efficient special‐purpose algorithms than LP exist for
• Where products/goods(finished or raw) are solving the Transportation and Assignment applications.
p
transported from a set of sources to a set of
destinations, some time may be through a
• Special purpose algorithm, modified simplex method, are
transhipment centre. important for two reasons:
Their computation times are generally much faster
• Subject to the supply and demand of the source and
They require less computer memory
destination, respectively;
1
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TP–– solution technique
TP Transportation Problem
• The procedures most often used to find an initial feasible
solution to a transportation problem are called heuristics. Some • The transportation problem seeks to
heuristics provider faster solution but poor at minimizing total cost. minimize the total shipping costs of
transporting goods
•Common techniques used for developing initial feasible solutions
are:
 the northwest corner method –from m origins or sources (each with a
 Least(Minimum) cost method and supply si)
 Vogel’s approximation method.
–to n destinations (each with a demand dj),
•After an initial solution is developed, for its optimality it must be
evaluated by
 the stepping-stone method –where the unit shipping cost from source, i,
 the modified distribution (MODI) method.
to a destination, j, is cij.
Simple Network Representation LP Formulation

The linear programming formulation in terms of the amounts
Sources Destinations
shipped from the sources to the destinations, xij , Cij being the
cost, can be written as:
Supply s1 1 Demand d1
1 M N
Supply s2 2
Min  c
i 1 j 1
ij x ij
2 Demand d2
N
s .t .  x ij  S i for i  1,  , M Supply
constraint
…
j 1
xij
M
Supply sm m
n Demand dn
i 1
x ij  d j for j  1,  , N Demand
constraint
Costs cij x ij  0 for all i , j Non-
negativity
Transportation‐9
LP Formulation (when S=D) LP Formulation (When D>S)
The linear programming formulation in terms of the amounts The linear programming formulation in terms of the amounts
shipped from the sources to the destinations, xij , Cij being the shipped from the sources to the destinations, xij , Cij being the
cost, can be written as: cost, can be written as:
M N M N
Min  c
i 1 j 1
ij x ij Min  c
i 1 j 1
ij x ij
N N
s .t . j 1
x ij  S i for i  1,  , M Supply
constraint
s .t . j 1
x ij  S i for i  1,  , M Supply
constraint
M M
i 1
x ij  d j for j  1,  , N Demand
constraint i 1
x ij  d j for j  1,  , N Demand
constraint
x ij  0 for all i , j Non- x ij  0 for all i , j Non-
negativity negativity
2
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The Transportation Simplex Tableau Problem on Transportation

A transportation tableau is given below. Each cell represents a shipping Executive furniture produces executive office desks at three
route (which is an arc on the network and a decision variable in the LP different places, location and capacity as shown below. The firm
formulation), and the unit shipping costs are given in an upper right distributes the desks through regional warehouses location and
hand box in the cell. demands are also shown below.
Destination Boston
Supply ui Cleveland (200 units
1 2 … n required)
(200 units
c11 c12 c1n Des Moines required)
1 … s1 (100 units
capacity)
c21 c22 c2n
2 … s2
Source
Albuquerque
(300 units
… … … … … … required) Evansville
(300 units
capacity)
cm1 cm2 cmn
m … sm
Fort Lauderdale
Demand d1 d2 … dn (300 units
Z= capacity)
v
j – Ripon Paul, FMS | 8102: Quantitative Methods for Management | Jul - Nov 2018 Session,
Copyright © 2018 Copyright © 2018 – Ripon Paul, FMS | 8102: Quantitative Methods for Management | Jul - Nov 2018 Session,
Transportation Model example Transportation Model example
Cost of shipping are shown Decision Variables

in the table Xij = number of desks shipped from factory i to
warehouse j
Decision: How much to
ship from each origin to
each destination? Objective Function: (in $ of transportation cost)
Objective: Minimize Minimize Z = 5XDA + 4XDB + 3XDC + 8XEA +

shipping cost 4XEB + 3XEC + 9XFA + 7XFB + 5XFC
Subject to the constraints:
Transportation Model example Transportation Model example

Flow Balance For Each Supply Node
To SUPPLY Des Moines
XDA + XDB + XDC = 100 (Des Moines) From Albuquerque Boston Cleveland (Factory
capacity)
capacity
constraint
XEA + XEB + XEC = 300 (Evansville) Des Moines
$5 $4 $3
100
Cell
XFA + XFB + XFC = 300 (Fort Lauderdale) $8 $4 $3
representing a
possible
Evansville 300 source‐‐to
source to‐‐
destination
$9 $7 $5 shipping
shipping
Flow Balance For Each Demand Node Fort Lauderdale 300 assignment
(Evansville to
XDA + XEA + XFA = 300 (Albuquerque) DEMAND
Cleveland)
(Warehouse 300 200 200 700
XDB + XEB + XFB = 200 (Boston) requirement)
Total demand
Cost of shipping 1 unit from Fort and total supply
XDC + XEC + XFC = 200 (Cleveland) Lauderdale factory to Boston warehouse Cleveland
warehouse demand
Xij > 0

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Transportation Problem ––few definitions Transportation Problem
Transportation Problem ––few definitions
 FEASIBLE SOLUTION:
 Any set of non‐negative allocations (X‐ij‐ ‐> 0) which satisfies the  OPTIMAL SOLUTION:
row and column sum is called a feasible solution. A feasible solution is said to be optimal if it minimizes the total
transportation cost.
 BASIC FEASIBLE SOLUTION (BFS):
 A feasible solution is called a BFS if the number of non‐negative
This is done through successive improvements to the initial basic
allocations is equal to m+n‐1
allocations is equal to m+n 1 where
where ‘m’
m is the number of rows
is the number of rows ‘n’
n the
the
feasible solution until no further decrease in transportation cost is
number of columns in a transportation table.
possible.
 DEGENERATE BASIC FEASIBLE SOLUTION: If a BFS contains less the stepping-stone method
the modified distribution (MODI) method.
than m+n‐1 non‐negative allocations, it is said to be degenerate.
Least(Minimum) cost method and

Vogel’s approximation method.
Northwest-Corner Rule Least(Minimum) Cost Method
To (A) (B) (C) Factory To (A) (B) (C) Factory

From Albuquerque Boston Cleveland capacity
From Albuquerque Boston Cleveland capacity
$5 $4 $3
(D) Des Moines 100 100 $5 $4 $3
(D) Des Moines 100 100
$8 $4 $3
(E) Evansville 200 100 300 $8 $4 $3
(E) Evansville 200 100 300
$9 $7 $5
(F) Fort Lauderdale 100 200 300 $9 $7 $5
(F) Fort Lauderdale 300 300
Warehouse
requirement 300 200 200 700 Warehouse
requirement 300 200 200 700
Means that the firm is shipping 100
Means that the firm is shipping 100 desks from Fort
desks from Fort
Lauderdale to Boston Total Cost = $3(100) + $3(100) + $4(200) + $9(300)
= $
= $4,100
4,100
Total Cost =
= $5(100
$5(100) +
) + $8(200
$8(200) + $
) + $4(100
4(100) +
) + $$7(100) + $5(200)
7(100) + $5(200)
Solution has improved with a gain of $4,200 ‐‐ $4,100 = $100
Solution has improved with a gain of $4,200
= $
= $4,200
4,200
VOGEL’S APPROXIMATION METHOD (VAM) EXCEL SOLVER

To SUPPLY ROW PENALTY
From Albuquerque Boston Cleveland (Factory
I II II
capacity)
$5 $4 $3 4‐3= ‐ ‐
Des Moines 100 100 1
$8 $4 $3 4‐3= 4‐3= 8‐3=

Evansville 200 100 300 1 1 5
$9 $7 $5 7‐5= 7‐5= 9‐5=

F L d d l
Fort Lauderdale 200 100 300 2 2 4
DEMAND
(Warehouse 300 200 200 700
requirement)
I 8‐5= 3 4‐4= 0 3‐3= 0

COLUMN
PENALTY
II 9‐8= 1 7‐4= 3 5‐3= 2

III 9‐8= 1 ‐ 5‐3= 2
Total Cost =
= $5(100
$5(100) +
) + $4(200
$4(200) +
) + $3(100
$3(100) + $
) + $9(200) +
9(200) + $5(100
$5(100)
) =
= $3,900
$3,900
Solution has improved BY $
Solution has improved BY $4,100‐
4,100‐ $3,900 = $200

Lecture 5 Transportation Class Notes

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9/30/2018

– a set of arcs which

– associated functions e.g. costs, time, etc.

Types of nodes and Flow Balance Network Flow Problem

Simple Network Representation LP Formulation

The Transportation Simplex Tableau Problem on Transportation

Transportation Model example Transportation Model example

Cost of shipping are shown Decision Variables

Objective: Minimize Minimize Z = 5XDA + 4XDB + 3XDC + 8XEA +

Subject to the constraints:

Transportation Model example Transportation Model example

Xij > 0

Least(Minimum) cost method and

Northwest-Corner Rule Least(Minimum) Cost Method

To (A) (B) (C) Factory To (A) (B) (C) Factory

VOGEL’S APPROXIMATION METHOD (VAM) EXCEL SOLVER

$8 $4 $3 4‐3= 4‐3= 8‐3=

$9 $7 $5 7‐5= 7‐5= 9‐5=

I 8‐5= 3 4‐4= 0 3‐3= 0

II 9‐8= 1 7‐4= 3 5‐3= 2

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