Distribution and Network

Models
Introduction: Nodes

• 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.

Arcs
Example of network model application;
One of the most frequent applications of network
model is the representation of supply chains.

Supply chain – set of

interconnected resources involved
in producing and distributing a
product to its consumers.
You’ll be introduced to the ff.
• Frequent application of network models:
1. Transportation problems
2. Transshipment problems
3. Assignment problems
4. Shortest-route problems
5. Maximal flow problems
6. PERT/CPM (Module 6)
1. 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.

This is an example of a supply chain problem.

In general, supply chains are designed to satisfy customer

demand for a product at minimum cost.
Transportation Problem: Example #1
• Acme Block Company has orders for Costs:
80 tons of concrete blocks at three
locations as follows: Northwood -- 25
tons, Westwood -- 45 tons, and
Eastwood -- 10 tons.
• Acme has two plants, each of which
can produce 50 tons per week.
Delivery cost per ton from each plant
to each suburban location is shown
on the next slide. Required:
• How should end of week shipments
1. Draw the network model for this problem.
be made to fill the above orders?
2. Formulate the objective function and
constraint functions.
Draw here:
Formulate linear functions here:
What if:
1. Total supply is not equal to demand
2. The objective is maximization
3. There are route capacities and route
minimums
4. There are unacceptable routes
2. Transshipment Problem
• Transshipment problems are transportation problems in
which a shipment may move through intermediate nodes
(transshipment nodes) before reaching a particular
destination node.

This is also an example of a supply chain problem.

The rules that apply under transportation problems also apply

here. The only difference is the addition of intermediate nodes.
Transshipment Problem: Example #2
• The Northside and Southside facilities Costs:

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 Required:
units to its customers. 1. Draw the network model for this problem.
2. Formulate the objective function and constraint
functions.
• Additional data is shown on the next
slide.
Draw here:
Formulate linear functions here:
What if:
1. Total supply is not equal to demand
2. The objective is maximization
3. There are route capacities and route
minimums
4. There are unacceptable routes
3. Assignment Problem
• An assignment problem seeks to minimize the total cost
assignment of m workers to m jobs, given that the cost of
worker i performing job j is cij.
• It assumes all workers are assigned and each job is
performed.

An assignment problem is a special case of a

transportation problem in which all supplies and all
demands are equal to 1.

Hence, rules in transportation problems also apply in here.

Assignment Problem: Example #3
Costs:
• An electrical contractor pays his
subcontractors a fixed fee plus
mileage for work performed. On
a given day the contractor is
faced with three electrical jobs
associated with various projects.

• How should the contractors be

assigned so that total mileage is
minimized?
Required:
1. Draw the network model for this problem.
2. Formulate the objective function and constraint
functions.
Draw here:
Formulate linear functions here:
What if:
1. Total supply is not equal to demand
2. The objective is maximization
3. There are route capacities and route
minimums
4. There are unacceptable routes
4. 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).

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.)
Shortest Route Problem: Example #4

Required:

1. Assuming the arcs represent distance in km, find the shortest route from origin
node 1 to destination node 7.
5. Maximal Flow Problem
• The maximal flow problem is concerned with determining
the maximal volume of flow from one node (called the
source) to another node (called the sink).

In the maximal flow problem, each arc has a maximum arc

flow capacity which limits the flow through the arc.
 END
Email: leachristine.vergino@ue.edu.ph

References:

Management Science by Anderson