QMB 4701: Managerial Operations Analysis I

NETWORK MODELING

LAST CLASS

Network flow problems

Three types of nodes y Xij = the amount being shipped (or flowing) from node i to node j y Number of decision variables y Number of constraints
y

Minimum cost network flow problems y If Total Supply > Total Demand y Then Inflow-Outflow >= Supply or Demand Excel:
y

SUMIF(range,criteria,sum_range)

THE SHORTEST PATH PROBLEM

Many decision problems boil down to determining the shortest (or least costly) route or path through a network.
y

Ex. Emergency Vehicle Routing

This is a special case of a transshipment problem where:

There is one supply node with a supply of -1 y There is one demand node with a demand of +1 y All other nodes have supply/demand of +0
y

THE AMERICAN CAR ASSOCIATION

5.0 hrs 9 pts

L'burg 9

+0

3.3 hrs 5 pts

+1
Va Bch
11

2.0 hrs 4 pts 4.7 hrs 9 pts

+0
K'ville 5
1.7 hrs 5 pts 2.0 hrs 9 pts

+0
3.0 hrs 4 pts

G'boro

1.1 hrs 3 pts

2.7 hrs 4 pts

Raliegh
10

+0

+0

A'ville 6 +0
2.8 hrs 7 pts 2.0 hrs 8 pts 1.7 hrs 4 pts

1.5 hrs 3 pts

2.3 hrs 3 pts

Chatt. 3

Charl. 7

3.0 hrs 4 pts

+0
G'ville 4
1.5 hrs 2 pts

B'ham 1

Atlanta
2.5 hrs 3 pts

2.5 hrs 3 pts

+0

-1

+0

SOLVING THE PROBLEM

There are two possible objectives for this problem

Finding the quickest route (minimizing travel time) y Finding the most scenic route (maximizing the scenic rating points)
y

Define the decision Variable Xij =1, choose to leave node i for node j 0, dont choose the arc from node i for node j Number of decision variables?

DEFINING THE OBJECTIVE FUNCTION

Min-Time objective function Min 2.5 X12 +3 X13 +1.7 X23 +2.5X24 +1.7X35+2.8X36+2X46+1.5X47+ +2X56 +5X59 +3X68+4.7X69+1.5 X78 +2.3 X7,10+2X89+1.1 X8,10+3.3 X9,11 +2.7X10,11

Each flow has its own cost coefficient.

6

DEFINING THE CONSTRAINTS

Flow constraints
X12 X13 +X12 X23 X24 +X13 + X23 X35 X36 + X24 X46 X47 + X35 X56 X59 + X36 + X46 + X56 X68 X69 +X47 X78 X7,10 + X68 + X78 X89 X8,10 + X59 + X69 + X89 X9,11 +X7,10 + X8,10 X10,11 +X9,11 + X10,11 = 1 =0 =0 =0 =0 =0 =0 =0 =0 =0 =1 } node 1 } node 2 } node 3 } node 4 } node 5 } node 6 } node 7 } node 8 } node 9 } node 10 } node 11

Nonnegativity conditions Xij >= 0 for all ij

7

IMPLEMENT

See file Fig5-7

FORMULATE THE OBJECTIVE FUNCTION

WHEN YOU WANT TO MAXIMIZE THE SCENIC SCORES

Max scenic score objective function Max 3X12 +4X13 +4X23 +3X24 +5X35+7X36+8X46+2X47+ +9X56 +9X59 +4X68+9X69+3X78 +3X7,10+4X89+3X8,10+5X9,11+4X10,11

CAN YOU DRAW THE NETWORK OF MIN-TIME PROBLEM

Va Bch
11

Total driving time = 11.5

Raliegh
10

Charl. 7

G'ville 4 B'ham 1
Atlanta

10

CAN YOU DRAW THE NETWORK OF MAX-SCENIC-SCORE PROBLEM

L'burg 9 K'ville 5
Va Bch
11

A'ville 6 Chatt. 3

Total scenic score = 35

B'ham 1

Atlanta

11

PRACTICE QUESTIONS

Find the quickest route but with total 18 scenic scores. y Total driving time = 11.8 Find the most scenic route but with no more than 13-hr total travel time. y Total scenic score = 23

12

SUMMARY OF SHORTEST PATH PROBLEM

1. One starting point (supply, with flow= 1), one ending point (demand, with flow=+1), other nodes have net flow=0. Objective: It can be min total shipping cost, min travel time, or max scenic scores, etc. Constraints: For each node, (inflow outflow) has to satisfy the demand or supply requirement. Other constraints may apply. You want to find a path optimizing your objective. You should know how to draw the result network diagram from Excel solution.
13

2. 3.

4. 5.

THE EQUIPMENT REPLACEMENT PROBLEM THE COMPU-TRAIN COMPANY

The problem of determining when to replace equipment is another common business problem. Compu-Train provides hands-on software training. Computers must be replaced at least every two years. It can also be modeled as a shortest path problem

14

THE COMPU-TRAIN COMPANY

Two lease contracts are being considered: y Each equipment requires $62,000 initially y Contract 1:
Prices increase 6% per year 60% trade-in for 1 year old equipment 15% trade-in for 2 year old equipment

Contract 2:
Prices increase 2% per year 30% trade-in for 1 year old equipment 10% trade-in for 2 year old equipment

You want to minimize total cost Each contract can be modeled as a shortest path problem

15

NETWORK FOR CONTRACT 1

+0
$63,985

+0
4
$30,231 $32,045 $33,968

2
$28,520

-1

$60,363

$67,824

+1

+0
y y y y

Net cost = Initial investment trade-in value Cost of trading after 1 year: 1.06*$62,000-0.6*$62,000 = $28,520 Cost of trading after 2 years: 1.062*$62,000-0.15*$62,000 = $60,363 etc, etc.
16

SOLVING THE PROBLEM

See data file Fig5-12 Tips: For each contract, you formulate a LP minimization problem in solver. Then you compare the costs in two contracts.

17

TRANSPORTATION & ASSIGNMENT PROBLEMS

Some network flow problems dont have transshipment nodes; only supply and demand nodes.
Groves
Mt. Dora

Supply 275,000

Distances (in miles)

21 50 40 35

Processing Plants
Ocala

Capacity 200,000

400,000

Eustis

30 22

Orlando

600,000

55

300,000

Clermont

20 25

Leesburg

225,000

18

FORMULATION

Let Xij be the amount from grove i to plant j

min 21x11  50 x12  40 x13  35 x21  30 x22  22 x23  55 x31  20 x32  25 x33 s.t.  x11  x12  x13 e 275K  x21  x22  x23 e 400 K  x31  x32  x33 e 300 K x11  x21  x31 e 200 K x12  x22  x32 e 600 K x13  x23  x33 e 225K xij u 0, i, j ! 1, 2,3
These problems are implemented more effectively in a matrix format in Chapter 3.
19

TRANSPORTATION & ASSIGNMENT PROBLEMS

What if the problem is not fully interconnected?

Processing Plants
Ocala

Supply 275,000

Groves
Mt. Dora

Distances (in miles)

21 50

Capacity 200,000

400,000

Eustis

30 22

Orlando

600,000

55

300,000

Clermont

20 25

Leesburg

225,000
20

GENERALIZED NETWORK FLOW PROBLEMS

In some problems, a gain or loss occurs in flows over arcs.

y y y y y

Oil or gas shipped through a leaky pipeline Imperfections in raw materials entering a production process Spoilage of food items during transit Theft during transit Interest or dividends on investments

These problems require some modeling changes.

21

COAL BANK HOLLOW RECYCLING

A firm is doing business from transferring from paper materials to pulp. There are four materials, two processors, and three types of pulps. The yields for each of processing materials and making pulps are less than one. The firm wants to find the best processes to satisfy the requirement and minimize the cost.

22

COAL BANK HOLLOW RECYCLING

Process 1 Cost $13 $11 White Office Paper $9 Cardboard $13 Material Newspaper Mixed Paper Yield 90% 80% 95% 75% Process 2 Cost $12 $13 $10 $14 Yield 85% 85% 90% 85% Supply 70 tons 50 tons 30 tons 40 tons
Print Stock Cost Yield $8 90% $7 95% 50 tons
23

Newsprint Pulp Source Recycling Process 1 Recycling Process 2 Demand Cost Yield $5 95% $6 90% 60 tons

Packaging Paper Cost Yield $6 90% $8 95% 40 tons

NETWORK FOR RECYCLING PROBLEM

-70
Newspaper

$13

1
$12 90%
Mixed paper

+0
Recycling Process 1

95% $5

Newsprint pulp

+60

-50

$11

80% 95%

7
90%

$6 $8 90%
Packing paper pulp

$13

5
75%

+40

-30

White office paper

$9 85% $10 90%

85% $6
Recycling Process 2

95% 90%

$8 $7

6
$13 85%

+0

95%

Print stock pulp

+50
24

-40

Cardboard

$14

DEFINING THE DECISION VARIABLE AND OBJECTIVE FUNCTION

Xij= # tons of paper shipping from node i to node j

Minimize total cost. MIN: 13X15 + 12X16 + 11X25 + 13X26 + 9X35+ 10X36 + 13X45 + 14X46 + 5X57 + 6X58 + 8X59 + 6X67 + 8X68 + 7X69

25

DEFINING THE CONSTRAINTS-I

Raw Materials

-X15 -X16 >= -70 -X25 -X26 >= -50 -X35 -X36 >= -30 -X45 -X46 >= -40

} node 1 } node 2 } node 3 } node 4

26

DEFINING THE CONSTRAINTS-II

Recycling Processes
+0.9X15+0.8X25+0.95X35+0.75X45- X57- X58-X59 = 0 +0.85X16+0.85X26+0.9X36+0.85X46-X67-X68-X69 = 0
} node 5 } node 6

27

DEFINING THE CONSTRAINTS-III

Paper Pulp

+0.95X57 + 0.90X67 >= 60 } node 7 +0.90X57 + 0.95X67 >= 40 } node 8 +0.90X57 + 0.95X67 >= 50 } node 9

28

IMPLEMENTING THE MODEL

See data file Fig 5-17 Draw the result network diagram.

29

IMPORTANT MODELING POINT

In generalized network flow problems, gains and/or losses associated with flows across each arc effectively increase and/or decrease the available supply. This can make it difficult to tell if the total supply is adequate to meet the total demand. When in doubt, it is best to assume the total supply is capable of satisfying the total demand and use Solver to prove (or refute) this assumption.

30

PRACTICE: ASSIGNMENT PROBLEM ASSIGNING SCHOOL BUSES TO ROUTS

Comp Route any 1 1 2 3 4 5 6 7200 7000 6400 5800 7500 7800 2 8200 8200 4800 8000 5000 3900 4500 6800 6400 5600 2800 6000 3 7800 4 5400 6300 5 6 3900 3300 4400 4900 5600 6700 3600 4200 3000 4200 7 8

Objective: To use a network model to assign companies to bus routes so that each route is covered at minimum cost and no company is assigned to more than two routes

31