Ch6 and Ch7 Logistics Networks LP Models

Logistics Networks
Chapter 6 & Chapter 7
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-1

Overview
■ Part of a class of LP problems known as network flow models.

■ Special mathematical features that permit very efficient, unique
solution methods (variations of traditional simplex procedure).
■ Detailed description of methods is contained on the companion
website
■ Text focuses on model formulation and solution with Excel and
QM for windows.
■ Web site Module B addresses transportation and assignment
solution methods
Copyright © 2016 Pearson Education, Ltd. 6-2

Network Components (1 of 3)
■ A network is an arrangement of paths (branches) connected at

various points (nodes) through which one or more items move from
one point to another.
■ The network is drawn as a diagram providing a picture of the system,

thus enabling visual representation and enhanced understanding.
■ A large number of real-life systems can be modeled as networks which

are relatively easy to conceive and construct.

■ Network diagrams consist of nodes and branches.
■ Nodes (circles), represent junction points, or locations.
■ Branches (lines), connect nodes and represent flow.

■ Four nodes, four branches in figure.

■ “Atlanta”, node 1, termed the origin; any of others, destination.
■ Branches identified by beginning and ending node numbers.
■ Value assigned to each branch (distance, time, cost, etc.).
Figure 7.1 Network of railroad routes

The Transportation Model: Characteristics
■ A product is transported from a number of sources to a number of

destinations at the minimum possible cost.
■ Each source is able to supply a fixed number of units of the
product, and each destination has a fixed demand for the
product.
■ The linear programming model has constraints for supply at each
source and demand at each destination.
■ All constraints are equalities in a balanced transportation model
where supply equals demand.
■ Constraints contain inequalities in unbalanced models where supply
does not equal demand.

Transportation Model Example
Problem Definition and Data
How many tons of wheat to transport from each grain
elevator to each mill on a monthly basis in order to
minimize the total cost of transportation?
Grain Elevator Supply Mill Demand
1. Kansas City 150 A. Chicago 200
2. Omaha 175 B. St. Louis 100
3. Des Moines 275 C. Cincinnati 300
Total 600 tons Total 600 tons
Transport Cost from Grain Elevator to Mill ($/ton)

Grain Elevator A. Chicago B. St. Louis C. Cincinnati
1. Kansas City $6 $8 $ 10
2. Omaha 7 11 11
3. Des Moines 4 5 12

Transportation Network Routes
Figure 6.1 Network of transportation routes for wheat shipments

Model Formulation
Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C +
4x3A + 5x3B + 12x3C
subject to:
x1A + x1B + x1C = 150
x2A + x2B + x2C = 175
x3A + x3B + x3C = 275
x1A + x2A + x3A = 200
x1B + x2B + x3B = 100
x1C + x2C + x3C = 300
xij  0
xij = tons of wheat from each grain elevator, i, i = 1, 2, 3,
to each mill j, j = A,B,C

Computer Solution with Excel (1 of 4)
Objective function
=C7+D7+E7
Cost array in
=D5+D6+D7 Decision variables cells K5:M7
in cells C5:E7
Exhibit 6.1
Supply constraints
Demand constraints
Copyright © 2016 Pearson Education, Ltd. Exhibit 6.2 6-11

Exhibit 6.3
Figure 6.2 Transportation network solution for wheat-shipping example

Computer Solution with QM for Windows (1 of 4)
Use any starting

method
Exhibit 6.7
Notes that “multiple optimal

solutions” exist
Exhibit 6.8
Exhibit 6.9
Change in cost
Added new row to reflect Sensitivity analysis of

demand > supply
transportation scenario
Exhibit 6.10
The Transshipment Model
Characteristics
■ Extension of the transportation model.
■ Intermediate transshipment points are added between the sources
and destinations.
■ Items may be transported from:
 Sources through transshipment points to destinations
 One source to another
 One transshipment point to another
S1 T1
 One destination to another D1
 Directly from sources to destinations S2 T2
 Some combination of these

Transshipment Model Example
Extension of the transportation model in which
intermediate transshipment points are added between
sources and destinations.
Shipping Costs
Grain Elevator
Farm 3. Kansas City 4. Omaha 5. Des Moines
1. Nebraska $16 10 12
2. Colorado 15 14 17

Transshipment Network Routes
Figure 6.3 Network of transshipment routes

Model Formulation
Minimize Z = $16x13 + 10x14 + 12x15 + 15x23 + 14x24
+ 17x25 + 6x36 + 8x37 + 10x38 + 7x46 + 11x47
+ 11x48 + 4x56 + 5x57 + 12x58
subject to:
x13 + x14 + x15 = 300 Supply constraints for farms
x23 + x24 + x25 = 300 in Nebraska and Colorado
x36 + x46 + x56 = 200
x37 + x47 + x57 = 100 Demand constraints at
x38 + x48 + x58 = 300 the Chicago, St. Louis
x13 + x23 - x36 - x37 - x38 = 0 and Cincinnati mills
x14 + x24 - x46 - x47 - x48 = 0
x15 + x25 - x56 - x57 - x58 = 0
xij  0
=SUM(B6:B7) Objective function
=SUM(B6:D6)
Cost arrays
=SUM(C13:C15) =SUM(C13:E13)
Constraints for transshipment flows;

i.e., shipments in = shipments out
Exhibit 6.11
Transshipment
constraints in
cells C20:C22
Exhibit 6.12
Network Solution for Wheat Shipping (3 of 3)
Figure 6.4 Transshipment network solution for wheat-shipping example

The Assignment Model
Characteristics
■ Special form of linear programming model similar to the

transportation model.
■ Supply at each source and demand at each destination
limited to one unit.
■ In a balanced model supply equals demand.
■ In an unbalanced model supply does not equal demand.

Assignment Model Example
Problem: Assign four teams of officials to four games in
a way that will minimize total distance traveled by the
officials. Supply is always one team of officials, demand is
for only one team of officials at each game.

Model Formulation
Minimize Z = 210xAR + 90xAA + 180xAD + 160xAC + 100xBR +70xBA
+ 130xBD + 200xBC + 175xCR + 105xCA +140xCD
+ 170xCC + 80xDR + 65xDA + 105xDD + 120xDC
subject to:
xAR + xAA + xAD + xAC = 1 xij  0
xBR + xBA + xBD + xBC = 1
xCR + xCA + xCD + xCC = 1
xDR + xDA + xDD + xDC = 1
xAR + xBR + xCR + xDR = 1
xAA + xBA + xCA + xDA = 1
xAD + xBD + xCD + xDD = 1
xAC + xBC + xCC + xDC = 1

Objective function
Decision
variables,
C5:F8
=C5+D5+E5+F5
=D5+D6+D7+D8
Mileage array
Exhibit 6.13
Exhibit 6.14
Simplex LP


Assignment Network Solution
Figure 6.5 Assignment network solution for ACC officials


Exhibit 6.18
The Shortest Route Problem
Definition and Example Problem Data (1 of 2)
Problem: Determine the shortest routes from the origin to all
destinations.
Figure 7.2 Shipping routes from Los Angeles

Definition and Example Problem Data (2 of 2)
Figure 7.3 Network representation of shortest route problem

Formulation as a 0 - 1 integer linear programming problem.
xij = 0 if branch i-j is not selected as part of the shortest route and 1
if it is selected.
Minimize Z = 16x12 + 9x13 + 35x14 + 12x24 + 25x25 + 15x34 +
22x36 + 14x45 + 17x46 + 19x47 + 8x57 + 14x67
subject to: x12 + x13 + x14= 1
x12 - x24 - x25 = 0
x13 - x34 - x36 = 0
x14 + x24 + x34 - x45 - x46 - x47 = 0
x25 + x45 - x57 = 0
x36 + x46 - x67 = 0
x47 + x57 + x67 = 1 xij = 0 or 1

Total hours
First constraint;
=A6+A7+A8
Constraint for node 2;

=A6-A9-A10
Decision variables
Exhibit 7.3
One truck leaves

node 1, and one
truck ends at node 7
Flow constraints
Exhibit 7.4

One truck flows

out of node 1; one
truck flows into
node 7
Exhibit 7.5
Exhibit 7.1
Destination node
Distance to node 5,
Des Moines
Exhibit 7.2
The Minimal Spanning Tree Problem
Definition and Example Problem Data
Problem: Connect all nodes in a network so that the total of the
branch lengths are minimized.
Figure 7.11 Network of possible cable TV paths

Solution Approach (6 of 6)
Optimal Solution
Figure 7.17 Minimal spanning tree for cable TV network

Solution Method Summary
1. Select any starting node (conventionally, node 1).

2. Select the node closest to the starting node to join the
spanning tree.
3. Select the closest node not currently in the spanning tree.
4. Repeat step 3 until all nodes have joined the spanning
tree.

Computer Solution with QM for Windows
Exhibit 7.6
The Maximal Flow Problem
Definition and Example Problem Data
Problem: Maximize the amount of flow of items from an
origin to a destination.
Figure 7.18 Network of railway system

xij = flow along branch i-j and integer
Maximize Z = x61
subject to:
x61 - x12 - x13 - x14 = 0
x12 - x24 - x25 = 0
x13 - x34 - x36 = 0
x14 + x24 + x34 - x46 = 0
x25 - x56 = 0
x36 + x46 + x56 - x61 = 0
x12  6 x24  3 x34  2
x13  7 x25  8 x36  6
x14  4 x46  5 x56  4
x61  17 xij  0 and integer

Objective-maximize
flow from node 6
Constraint at node 1;
=C15-C6-C7-C8
Constraint at node 6;
=C12+C13+C14-C15
Decision
variables
Exhibit 7.8
Exhibit 7.9

Exhibit 7.10

Computer Solution with QM for Windows
Exhibit 7.7
Practice Problem Solution
Transportation Problem Statement
A concrete company transports concrete from three
plants to three construction sites. The supply capacities of
the three plants, the demand requirements at the three
sites, and the transportation costs per ton are as follows:
Construction site
Plant A B C Supply (tons)
1 $8 $5 $6 120
2 15 10 12 80
3 3 9 10 80
Demand (tons) 150 70 100
Determine the linear programming model formulation and

solve using Excel.
Example Problem Solution
Model Formulation
Minimize Z = $8x1A + 5x1B + 6x1C + 15x2A + 10x2B + 12x2C

+3x3A + 9x3B + 10x3C
subject to:
x1A + x1B + x1C = 120
x2A + x2B + x2C = 80
x3A + x3B + x3C = 80
x1A + x2A + x3A  150
x1B + x2B + x3B  70
x1C + x2C + x3C  100
xij  0

Example Problem Solution
Computer Solution with Excel

Ch6 and Ch7 Logistics Networks LP Models

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Logistics Networks

Chapter 6 & Chapter 7

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-1

■ Part of a class of LP problems known as network flow models.

Copyright © 2016 Pearson Education, Ltd. 6-2

■ A network is an arrangement of paths (branches) connected at

■ The network is drawn as a diagram providing a picture of the system,

■ A large number of real-life systems can be modeled as networks which

Copyright © 2016 Pearson Education, Ltd. 6-3

■ Network diagrams consist of nodes and branches.

■ Nodes (circles), represent junction points, or locations.

■ Branches (lines), connect nodes and represent flow.

Copyright © 2016 Pearson Education, Ltd. 6-4

■ Four nodes, four branches in figure.

Figure 7.1 Network of railroad routes

■ A product is transported from a number of sources to a number of

Copyright © 2016 Pearson Education, Ltd. 6-6

Transport Cost from Grain Elevator to Mill ($/ton)

Copyright © 2016 Pearson Education, Ltd. 6-7

Figure 6.1 Network of transportation routes for wheat shipments

Copyright © 2016 Pearson Education, Ltd. 6-9

Copyright © 2016 Pearson Education, Ltd. Exhibit 6.2 6-11

Figure 6.2 Transportation network solution for wheat-shipping example

Use any starting

Notes that “multiple optimal

Added new row to reflect Sensitivity analysis of

Copyright © 2016 Pearson Education, Ltd. 6-18

Copyright © 2016 Pearson Education, Ltd. 6-19

Figure 6.3 Network of transshipment routes

=SUM(B6:B7) Objective function

Constraints for transshipment flows;

Figure 6.4 Transshipment network solution for wheat-shipping example

Copyright © 2016 Pearson Education, Ltd. 6-24

■ Special form of linear programming model similar to the

■ In an unbalanced model supply does not equal demand.

Copyright © 2016 Pearson Education, Ltd. 6-25

Copyright © 2016 Pearson Education, Ltd. 6-26

Copyright © 2016 Pearson Education, Ltd. 6-27

Copyright © 2016 Pearson Education, Ltd. 6-29

Copyright © 2016 Pearson Education, Ltd. Exhibit 6.15 6-30

Figure 6.5 Assignment network solution for ACC officials

Copyright © 2016 Pearson Education, Ltd. Exhibit 6.17 6-32

Figure 7.2 Shipping routes from Los Angeles

Figure 7.3 Network representation of shortest route problem

Copyright © 2016 Pearson Education, Ltd. 6-36

Constraint for node 2;

One truck leaves

Copyright © 2016 Pearson Education, Ltd. 6-38

One truck flows

Figure 7.11 Network of possible cable TV paths

Figure 7.17 Minimal spanning tree for cable TV network

1. Select any starting node (conventionally, node 1).

Copyright © 2016 Pearson Education, Ltd. 6-44

Figure 7.18 Network of railway system

Copyright © 2016 Pearson Education, Ltd. 6-47

Copyright © 2016 Pearson Education, Ltd. 6-49

Copyright © 2016 Pearson Education, Ltd. 6-50

Determine the linear programming model formulation and

Minimize Z = $8x1A + 5x1B + 6x1C + 15x2A + 10x2B + 12x2C

Copyright © 2016 Pearson Education, Ltd. 6-53

Copyright © 2016 Pearson Education, Ltd. 6-54

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