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 20.000 (New York demand) (Chicago demand) (Los Angeles demand) (New Orleans factory supply) (Omaha factory supply) X11 X12 X13 X11 + X12 X21 + X22 All variables ≥ .000 15.000 15.000 8.

Formulation for Excel’s Solver .

Solution from Excel’s Solver .

000 LOS ANGELES 8.000 7.000 0 CHICAGO 0 8.000 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 . Top Speed Bicycle solution TO FROM New Orleans Omaha NEW YORK 10.000 Total shipping cost equals $96.

750 3.500 7.500 4.500 24.000 8.000 3.500 9.500 11.000 WEIGHT (POUNDS) 7.500 .000 4 5 6 9.500 3.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.

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 .

500X1 + 7.500X4 + $11.500X4 + 4.000 lb capacity ≤1 ≤1 ≤1 ≤1 ≤1 ≤1 ≥0 = $22.000X5 + 3. Objective function Maximize load value subject to 7.000X3 + $9.500X2 + 3. X4.500X5 + $9. X6 ≤ 10.500X6 X1 X2 X3 X4 X5 X6 X1. X5.500X1 + $24.000X2 + $8. X3.750X6 . X2.000X3 + 3.

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. and 6 for a value of $27. 4.250 .

the problem is called a transshipment problem . 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).

and St Louis Shipping costs vary by location and destination Snowblowers can not be shipped directly from the factories to the supply houses .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.

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 .

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

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 .

B2. C2. T2. B1. C3. 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 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. D1. C1. D2.

The solution from QM for Windows is .