TRANSPORTATION APPLICATION

Shipping Problem The transportation or shipping problem involves determining the amount of goods or items to be transported from a number of origins to a number of destinations The objective usually is to minimize total shipping costs or distances This is a specific case of LP and a special algorithm has been developed to solve it

The Top Speed Bicycle Co. manufactures and markets a line of 10-speed bicycles The firm has final assembly plants in two cities where labor costs are low It has three major warehouses near large markets The sales requirements for the next year are New York 10,000 bicycles Chicago 8,000 bicycles Los Angeles 15,000 bicycles The factory capacities are New Orleans 20,000 bicycles Omaha 15,000 bicycles

The cost of shipping bicycles from the plants to the warehouses is different for each plant and warehouse
TO
FROM New Orleans Omaha NEW YORK $2 $3 CHICAGO $3 $1 LOS ANGELES $5 $4

The company wants to develop a shipping schedule

that will minimize its total annual cost

The double subscript variables will represent the origin factory and the destination warehouse Xij = bicycles shipped from factory i to warehouse j So X11 = number of bicycles shipped from New Orleans to New York X12 = number of bicycles shipped from New Orleans to Chicago X13 = number of bicycles shipped from New Orleans to Los Angeles X21 = number of bicycles shipped from Omaha to New York X22 = number of bicycles shipped from Omaha to Chicago X23 = number of bicycles shipped from Omaha to Los Angeles

Objective function
Minimize total shipping costs
subject to

= 2X11 + 3X12 + 5X13 + 3X21 + 1X22 + 4X23

+ X21 + X22 + X23 + X13 + X23 0 = = = 10,000 8,000 15,000 20,000 15,000 (New York demand) (Chicago demand) (Los Angeles demand) (New Orleans factory supply) (Omaha factory supply)

X11 X12 X13 X11 + X12 X21 + X22 All variables

Formulation for Excels Solver

Solution from Excels Solver

 Top Speed Bicycle solution

TO FROM New Orleans Omaha NEW YORK 10,000 0 CHICAGO 0 8,000 LOS ANGELES 8,000 7,000

Total shipping cost equals $96,000 Transportation problems are a special case of LP as the coefficients for every variable in the constraint equations equal 1 This situation exists in assignment problems as well as they are a special case of the transportation problem

Truck Loading Problem

The truck loading problem involves deciding which items to load on a truck so as to maximize the value of a load shipped Goodman Shipping has to ship the following six items
ITEM 1 2 3 VALUE ($) 22,500 24,000 8,000 WEIGHT (POUNDS) 7,500 7,500 3,000

4
5 6

9,500
11,500 9,750

3,500
4,000 3,500

The objective is to maximize the value of items loaded into the truck The truck has a capacity of 10,000 pounds The decision variable is Xi = proportion of each item i loaded on the truckA

 Objective function
Maximize load value subject to 7,500X1 + 7,500X2 + 3,000X3 + 3,500X4 + 4,000X5 + 3,500X6 X1 X2 X3 X4 X5 X6 X1, X2, X3, X4, X5, X6 10,000 lb capacity 1 1 1 1 1 1 0 = $22,500X1 + $24,000X2 + $8,000X3 + $9,500X4 + $11,500X5 + $9,750X6

Excel Solver formulation for Goodman Shipping

Solver solution for Goodman Shipping

The Goodman Shipping problem has an interesting issue The solution calls for one third of Item 1 to be loaded on the truck What if Item 1 can not be divided into smaller pieces? Rounding down leaves unused capacity on the truck and results in a value of $24,000 Rounding up is not possible since this would exceed the capacity of the truck Using integer programming, the solution is to load one unit of Items 3, 4, and 6 for a value of $27,250

 The transportation problem is a special case of

the transshipment problem When the items are being moved from a source to a destination through an intermediate point (a transshipment point), the problem is called a

transshipment problem

Distribution Centers

Frosty Machines manufactures snowblowers in Toronto and Detroit These are shipped to regional distribution centers in Chicago and Buffalo From there they are shipped to supply houses in New York, Philadelphia, and St Louis Shipping costs vary by location and destination Snowblowers can not be shipped directly from the factories to the supply houses

Frosty Machines network

Source Transshipment Point Destination New York City Toronto Chicago Philadelphia Detroit Buffalo St Louis

Frosty Machines data

TO FROM Toronto Detroit Chicago Buffalo Demand CHICAGO $4 $5 BUFFALO $7 $7

NEW YORK CITY

$6 $2 450

PHILADELPHIA $4 $3 350

ST LOUIS $5 $4 300

SUPPLY 800 700

Frosty would like to minimize the transportation

costs associated with shipping snowblowers to meet the demands at the supply centers given the supplies available

 A description of the problem would be to minimize cost subject to

1. The number of units shipped from Toronto is not more than 800 2. The number of units shipped from Detroit is not more than 700 3. The number of units shipped to New York is 450 4. The number of units shipped to Philadelphia is 350 5. The number of units shipped to St Louis is 300 6. The number of units shipped out of Chicago is equal to the number of units shipped into Chicago 7. The number of units shipped out of Buffalo is equal to the number of units shipped into Buffalo

The decision variables should represent the number of units shipped from each source to the transshipment points and from there to the final destinations
T1 = the number of units shipped from Toronto to Chicago T2 = the number of units shipped from Toronto to Buffalo D1 = the number of units shipped from Detroit to Chicago D2 = the number of units shipped from Detroit to Chicago C1 = the number of units shipped from Chicago to New York C2 = the number of units shipped from Chicago to Philadelphia C3 = the number of units shipped from Chicago to St Louis B1 = the number of units shipped from Buffalo to New York B2 = the number of units shipped from Buffalo to Philadelphia B3 = the number of units shipped from Buffalo to St Louis

The linear program is

Minimize cost = 4T1 + 7T2 + 5D1 + 7D2 + 6C1 + 4C2 + 5C3 + 2B1 + 3B2 + 4B3

subject to T1 + T2 800 D1 + D2 700 C1 + B1 = 450 C2 + B2 = 350 C3 + B3 = 300 T1 + D1 = C1 + C2 + C3 T2 + D2 = B1 + B2 + B3 T1, T2, D1, D2, C1, C2, C3, B1, B2, B3 0 (supply at Toronto) (supply at Detroit) (demand at New York) (demand at Philadelphia) (demand at St Louis) (shipping through Chicago) (shipping through Buffalo) (nonnegativity)

The solution from QM for Windows is