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WAREHOUSE 3
CANNERY 2 Rapid City
Eugene CANNERY 3
Albert Lea
WAREHOUSE 2
Salt Lake City
WAREHOUSE 1
Sacramento
WAREHOUSE 4
Albuquerque
q q
Shipping Data
Cannery Output Warehouse Allocation
Bellingham 75 truckloads Sacramento 80 truckloads
Eugene 125 truckloads Salt Lake City 65 truckloads
Albert Lea 100 truckloads Rapid City 70 truckloads
Total 300 truckloads Albuquerque 85 truckloads
T t l
Total 300 ttruckloads
kl d
Total shipping cost under the current plan = 75($464) + 5($352) + 65($416) + 55($690) + 15($388) + 85($685)
= $165,595
Is this optimal?
Terminology
e o ogy for
o a Transportation
a spo tat o Problem
ob e
P&T Company
p y Problem General Model
Canneries Sources
Warehouses Destinations
Shipping cost per truckload from a Cost per unit distributed from a source
cannery to a warehouse to a destination
Characteristics of Transportation Problems
Destina tions
Sourc es
D1 80 (Sa cr amento)
464
(Be llingham) 75 S1 513
654
867 D2 65 (Sa lt La ke City
352 416
(E ugene) 125 S2 690
791
682 D3 70 (Rapid City)
995
388
(Alber t Le a)100 S3
685
D4 85 (Albuquerque )
P&T Mathematical Model
Let xij = the number of truckloads to ship from cannery i to warehouse j
(i = 1, 2, 3; j = 1, 2, 3, 4)
subject
j to
Cannery 1: x11 + x12 + x13 + x14 = 75
Cannery 2: x21 + x22 + x23 + x24 = 125
C
Cannery 3:
3 x31 + x32 + x33 + x34 = 100
Warehouse 1: x11 + x21 + x31 = 80
Warehouse 2: x12 + x22 + x32 = 65
Warehouse 3: x13 + x23 + x33 = 70
Warehouse 4: x14 + x24 + x34 = 85
and
xijj ≥ 0 (i = 1, 2, 3; j = 1, 2, 3, 4)
...refer to P&T.xls
Integer Solutions Property
As long as all its supplies and demands have integer values, any
transportation problem with feasible solutions is guaranteed to
have an optimal solution with integer values for all its decision
variables. Therefore, it is not necessary to add constraints to the
model
d l th
thatt restrict
t i t these
th variables
i bl tto only
l hhave iinteger
t values.
l
Pl t
Plant
1 $41 $27 $28 $24 75
2 40 29 — 23 75
3 37 30 27 21 45
Required production 20 30 30 40
- Four customers would like to make major purchases. There will not be
enough to meet each customers’ requested purchases, so management
has set a minimum acceptable delivery to each customer
customer.
- Due largely to variations in shipping cost, the net profit per unit sold varies
depending
p g on which p plant supplies
pp which customer.
Question: How many units should Nifty sell to each customer and how
many units should they ship from each plant to each customer?
Data for the Nifty Company
Unit Profit
Production
Customer: 1 2 3 4 Quantity
Plant
1 $55 $42 $46 $53 8000
2 37 18 32 48 5000
3 29 59 51 35 7000
Minimum purchase 7000 3000 2000 0
Requested purchase 7000 9000 6000 8000
Question: How many units should Nifty sell to each customer and
how many units should they ship from each plant to each customer?
...refer to nifty.xls
Metro Water (Distributing Natural Resources)
Metro Water District is an agency that administers water distribution in a large
geographic region. The region is arid, so water must be brought in from outside the
region.
Question: How much water should Metro take from each river, and
how much should they send from each river to each city?
...refer to Metro.xls
Northern Airplane (Production Scheduling)
Northern Airplane
p Company
p yp produces commercial airplanes.
p The last
stage in production is to produce the jet engines and install them.
Unit Cost of
M i
Maximum P
Production
d ti P d ti ($million)
Production ($ illi ) Unit Cost
Scheduled Regular Regular of Storage
Month Installations Time Overtime Time Overtime ($thousand)
1 10 20 10 1 08
1.08 1 10
1.10 15
2 15 30 15 1.11 1.12 15
3 25 25 10 1.10 1.11 15
4 20 5 10 1 13
1.13 1 15
1.15
The city has been divided into 9 tracts with approximately equal
populations.
populations
Each school has a minimum and maximum number of students that should
be assigned.
g
The school district management has decided that the appropriate objective
is to minimise the average distance that students must travel to school.
* note that this is equivalent to minimising the total distance that
all students travel because the number of students is fixed
...refer to Middleton.xls
Texago Corporation Site Selection Case Study
● Texago is expanding operations and will require an additional refinery and have to
increase its oil imports
● Management
M t mustt decide
d id where
h tto b
build
ild th
the new refinery
fi
● managementt wants
t allll refineries
fi i tto operate
t att full
f ll capacity
it
- need to know Texago’s supply and demand for oil at various stages in the
supply chain
● note that refineries require 360m barrels, domestic fields only deliver 240m barrels
- the remainder (120m barrels) will be imported from the Middle East
- transport costs will be key in the decision
Texago Corporation Site Selection Case Study
California 5 5 3 1 3 4
Alaska 5 7 3 4 5 7
Middle East 2 3 5 4 3 4
Texago Corporation Site Selection Case Study
● each
h refinery
fi h
has diff
differentt operating
ti costst
- labour costs, taxes, rent, energy, etc.
Los
os Angeles
ge es 6 0
620
Galveston 570
St. Louis 530
● 2 steps:
t
1) solve optimal distribution plan from oil fields to all 4 refineries
- this will require solving 3 problems, 1 for each proposed refinery
...refer to Texago
g 1.xls
St. Louis 960 million 1.43 billion 530 million 2.92 billion
Sellmore Company Assignment Problem
The marketing manager of Sellmore Company will be holding the company’s annual
sales conference soon.
Each employee can do all of the tasks, but some are more efficient at some tasks
Ian 47 45 32 51 12
Joan 39 56 36 43 13
Sean 32 51 25 46 15
Total Cost
Task
Word
Processing Graphics Packets Registrations
Ann $490 $574 $378 $560
Assignee Ian $564 $540 $384 $612
Joan $507 $728 $468 $559
Sean $480 $765 $375 $690
The Network Representation
Assignees Tasks
560 378
564
(Ian) A2 540 T2 (Graphics)
384
612
507 728
(Joan) A3
468 T3 (Packets)
559
765
375 ...refer
refer to sellmore.xls
sellmore xls
480
- we introduce a new constraint that all of any specific product must be produced in only one plant
- i.e. no product splitting
- only plants 1 and 2 have capacity to produce more than one product