4-1

OR/MA 504

Chapter 4

Network Modeling
Introduction to
Mathematical Programming
4-2
Introduction
A large variety of linear programming applications
can be represented graphically as networks.
This chapter focuses on several such problems:
Transshipment Problems
Shortest Path Problems
Maximal Flow Problems
Transportation/Assignment Problems
Generalized Network Flow Problems
The Minimum Spanning Tree Problem
4-3
Network Flow Problem Characteristics
Network flow problems can be represented as a
collection of nodes connected by arcs.
There are three types of nodes:
Supply
Demand
Transshipment
Well use negative numbers to represent supplies
and positive numbers to represent demand.
4-4
A Transshipment Problem:
The Bavarian Motor Company
Newark
1
Boston
2
Columbus
3
Atlanta
5
Richmond
4
J'ville
7
Mobile
6
$30
$40
$50
$35
$40
$30
$35
$25
$50
$45
$50
-200
-300
+80
+100
+60
+170
+70
4-5
Defining the Decision Variables
For each arc in a network flow model
we define a decision variable as:

X
ij
= the amount being shipped (or flowing) from node i to node j
For example
X
12
= the # of cars shipped from node 1 (Newark) to node 2 (Boston)
X
56
= the # of cars shipped from node 5 (Atlanta) to node 6 (Mobile)
Note: The number of arcs determines
the number of variables!
4-6
Defining the Objective Function
Minimize total shipping costs.

MIN: 30X
12
+ 40X
14
+ 50X
23
+ 35X
35

+40X
53
+ 30X
54
+ 35X
56
+ 25X
65

+ 50X
74
+ 45X
75
+ 50X
76
4-7
Constraints for Network Flow Problems:
The Balance-of-Flow Rules
For Minimum Cost Network Apply This Balance-of-Flow
Flow Problems Where: Rule At Each Node:

Total Supply > Total Demand Inflow-Outflow >= Supply or Demand

Total Supply < Total Demand Inflow-Outflow <=Supply or Demand

Total Supply = Total Demand Inflow-Outflow = Supply or Demand

4-8
Defining the Constraints
In the BMC problem:
Total Supply = 500 cars
Total Demand = 480 cars
For each node we need a constraint like this:
Inflow - Outflow >= Supply or Demand
Constraint for node 1:
X
12
X
14
>= 200 (Note: there is no inflow for node 1!)
This is equivalent to:
+X
12
+ X
14
<= 200
(Supply >= Demand)
4-9
Defining the Constraints
Flow constraints
X
12
X
14
>= 200 } node 1
+X
12
X
23
>= +100 } node 2
+X
23
+ X
53
X
35
>= +60 } node 3
+ X
14
+ X
54
+ X
74
>= +80 } node 4
+ X
35
+ X
65
+ X
75
X
53
X
54
X
56
>= +170} node 5
+ X
56
+ X
76
X
65
>= +70 } node 6
X
74
X
75
X
76
>= 300 } node 7
Nonnegativity conditions
X
ij
>= 0 for all ij
4-10
Implementing the Model
See file Fig4-1.xls
4-11
Optimal Solution to the BMC Problem
Newark
1
Boston
2
Columbus
3
Atlanta
5
Richmond
4
J'ville
7
Mobile
6
$30
$40
$50
$40
$50
$45
-200
-300
+80
+100
+60
+170
+70
120
80
20
40
70
210
4-12
The Shortest Path Problem
Many decision problems boil down to
determining the shortest (or least costly) route
or path through a network.
Ex. Emergency Vehicle Routing
This is a special case of a transshipment
problem where:
There is one supply node with a supply of -1
There is one demand node with a demand of
+1
All other nodes have supply/demand of +0
4-13
The American Car Association
B'ham
Atlanta
G'ville
Va Bch
Charl.
L'burg
K'ville
A'ville
G'boro
Raleigh
Chatt.
1
2
3
4
6
5
7
8
9
10
11
2.5 hrs
3 pts
3.0 hrs
4 pts
1.7 hrs
4 pts
2.5 hrs
3 pts
1.7 hrs
5 pts
2.8 hrs
7 pts
2.0 hrs
8 pts
1.5 hrs
2 pts
2.0 hrs
9 pts
5.0 hrs
9 pts
3.0 hrs
4 pts
4.7 hrs
9 pts
1.5 hrs
3 pts
2.3 hrs
3 pts
1.1 hrs
3 pts
2.0 hrs
4 pts
2.7 hrs
4 pts
3.3 hrs
5 pts
-1
+1
+0
+0
+0
+0
+0
+0
+0
+0
+0
4-14
Solving the Problem
There are two possible objectives for
this problem
Finding the quickest route (minimizing
travel time)
Finding the most scenic route (maximizing
the scenic rating points)
See file Fig4-2.xls
4-15
The Equipment Replacement Problem
The problem of determining when to
replace equipment is another common
business problem.
It can also be modeled as a shortest
path problem
4-16
The Compu-Train Company
Compu-Train provides hands-on software training.
Computers must be replaced at least every two years.
Two lease contracts are being considered:
Each requires $62,000 initially
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
4-17
Network for Contract 1
1 3
5
2 4
-1
+1
+0
+0 +0
$28,520
$60,363
$30,231
$63,985
$32,045
$67,824
$33,968
Cost of trading after 1 year: 1.06*$62,000 - 0.6*$62,000 = $28,520
Cost of trading after 2 years: 1.06
2
*$62,000 - 0.15*$62,000 = $60,363
Cost of trading in year 2 after trading in year 1:
1.06
2
*$62,000 0.6(1.06*$62,000) = $69,663 - $39,432 = $30,231
4-18
Solving the Problem
See file Fig4-3.xls
4-19
Transportation & Assignment Problems
Some network flow problems dont have trans-
shipment nodes; only supply and demand nodes.
Mt. Dora
1
Eustis
2
Clermont
3
Ocala
4
Orlando
5
Leesburg
6
Distances (in miles)
Capacity
Supply
275,000
400,000
300,000
225,000
600,000
200,000
Groves
Processing
Plants
21
50
40
35
30
22
55
25
20
These problems are implemented
more effectively using the technique
described in Chapter 2.
4-20
Generalized Network Flow Problems
In some problems, a gain or loss occurs
in flows over arcs.
Examples
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.
4-21
Coal Bank Hollow Recycling
Material Cost Yield Cost Yield Supply
Newspaper $13 90% $12 85% 70 tons
Mixed Paper $11 80% $13 85% 50 tons
White Office Paper $9 95% $10 90% 30 tons
Cardboard $13 75% $14 85% 40 tons
Process 1 Process 2
Pulp Source Cost Yield Cost Yield Cost Yield
Recycling Process 1 $5 95% $6 90% $8 90%
Recycling Process 2 $6 90% $8 95% $7 95%
Newsprint Packaging Paper Print Stock
Demand 60 tons 40 tons 50 tons
4-22
Network for Recycling Problem
Newspaper
1
Mixed
paper
2
3
Cardboard
4
Recycling
Process 1
5
6
Newsprint
pulp
7
Packing
paper
pulp
8
Print
stock
pulp
9
-70
-50
-30
-40
+60
+40
+50
White
office
paper
Recycling
Process 2
$13
$12
$11
$13
$9
$10
$14
$13
90%
80%
95%
75%
85%
85%
90%
85%
$5
$6
$8
$6
$7
$8
95%
90%
90%
90%
95%
95%
+0
+0
4-23
Defining the Objective Function
Minimize total cost.

MIN: 13X
15
+ 12X
16
+ 11X
25
+ 13X
26

+ 9X
35
+ 10X
36
+ 13X
45
+ 14X
46
+ 5X
57

+ 6X
58
+ 8X
59
+ 6X
67
+ 8X
68
+ 7X
69

4-24
Defining the Constraints-I
Raw Materials
-X
15
-X
16
>= -70 } node 1
-X
25
-X
26
>= -50 } node 2
-X
35
-X
36
>= -30 } node 3
-X
45
-X
46
>= -40 } node 4
4-25
Defining the Constraints-II
Recycling Processes

+0.9X
15
+0.8X
25
+0.95X
35
+0.75X
45
- X
57
- X
58
-X
59
>= 0 } node 5

+0.85X
16
+0.85X
26
+0.9X
36
+0.85X
46
-X
67
-X
68
-X
69
>= 0 } node 6
4-26
Defining the Constraints-III
Paper Pulp
+0.95X
57
+ 0.90X
67
>= 60 } node 7
+0.90X
57
+ 0.95X
67
>= 40 } node 8
+0.90X
57
+ 0.95X
67
>= 50 } node 9
4-27
Implementing the Model
See file Fig4-4.xls
4-28
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.
4-29
The Maximal Flow Problem
In some network problems, the objective is to
determine the maximum amount of flow that can
occur through a network.
The arcs in these problems have upper and
lower flow limits.
Examples
How much water can flow through a network
of pipes?
How many cars can travel through a network
of streets?
4-30
The Northwest Petroleum Company
Oil Field
Pumping
Station 1
Pumping
Station 2
Pumping
Station 3
Pumping
Station 4
Refinery 1
2
3
4
5
6
6
4
3
6
4
5
2
2
4-31
Max Flow Problem Set-Up
Solve as transshipment problem:
Add return arc from ending node to the
starting node
Assign demand of 0 to all nodes in network
Maximize flow over the return arc
4-32
The Northwest Petroleum Company
Oil Field
Pumping
Station 1
Pumping
Station 2
Pumping
Station 3
Pumping
Station 4
Refinery 1
2
3
4
5
6
6
4
3
6
4
5
2
2
+0
+0
+0
+0
+0
+0
4-33
Formulation of the Max Flow Problem
MAX: X
61

Subject to: +X
61
- X
12
- X
13
= 0
+X
12
- X
24
- X
25
= 0
+X
13
- X
34
- X
35
= 0
+X
24
+ X
34
- X
46
= 0
+X
25
+ X
35
- X
56
= 0
+X
46
+ X
56
- X
61
= 0

with the following bounds on the decision variables:
0 <= X
12
<= 6 0 <= X
25
<= 2 0 <= X
46
<= 6
0 <= X
13
<= 4 0 <= X
34
<= 2 0 <= X
56
<= 4
0 <= X
24
<= 3 0 <= X
35
<= 5 0 <= X
61
<= inf

4-34
Implementing the Model
See file Fig4-5.xls
4-35
Optimal Solution
Oil Field
Pumping
Station 1
Pumping
Station 2
Pumping
Station 3
Pumping
Station 4
Refinery 1
2
3
4
5
6
6
4
3
6
4
5
2
2
5
3
2
4
2
5
4
2
4-36
Special Modeling Considerations:
Flow Aggregation
1
2
3
4
5
6
-100
-100
+75
+50
+0
+0
$3
$4
$4
$5
$5
$5
$3
$6
Suppose the total flow into nodes 3 & 4 must be at least 50
and 60, respectively. How would you model this?
4-37
1
2
3
4
5
6
-100
-100
+75
+50
+0
+0
$3
$4
$4
$5
$5
$5
$3
$6
30
40
+0
+0
L.B.=50
L.B.=60
Nodes 30 & 40 aggregate the total flow into nodes
3 & 4, respectively.
Special Modeling Considerations:
Flow Aggregation
4-38
Special Modeling Considerations:
Multiple Arcs Between Nodes
1
1
10
2
-75
+0
+50
-75
$8
$0
$6
2
+50
Two two (or more) arcs cannot share the same
beginning and ending nodes. Instead, try...
$6
U.B. = 35
$8
U.B. = 35
4-39
Special Modeling Considerations:
Capacity Restrictions on Total Supply
1
-100
2
-100
3
+75
4
+80
$5, UB=40
$3, UB=35
$4, UB=30
$6, UB=35
Supply exceeds demand, but the upper bounds
prevent the demand from being met.
4-40
Special Modeling Considerations:
Capacity Restrictions on Total Supply
1
-100
2
-100
3
+75
4
+80
$5, UB=40
$3, UB=35
$6, UB=35
$4, UB=30
0
+200
$999, UB=100
$999, UB=100
Now demand exceeds supply. As much real demand
as possible will be met in the least costly way.
4-41
The Minimal Spanning Tree Problem
For a network with n nodes, a spanning
tree is a set of n-1 arcs that connects all
the nodes and contains no loops.
The minimal spanning tree problem
involves determining the set of arcs that
connects all the nodes at minimum cost.
4-42

Minimal Spanning Tree Example:
Windstar Aerospace Company

2
3
1
4
5
6
$150
$100
$40
$85
$65
$50
$90
$80
$75
$85
Nodes represent computers in a local area network.
4-43
The Minimal Spanning Tree Algorithm
1. Select any node. Call this the current subnetwork.
2. Add to the current subnetwork the cheapest arc
that connects any node within the current
subnetwork to any node not in the current
subnetwork. (Ties for the cheapest arc can be
broken arbitrarily.) Call this the current subnetwork.
3. If all the nodes are in the subnetwork, stop; this is
the optimal solution. Otherwise, return to step 2.
4-44
Solving the Example Problem - 1
2
3
1
4
5
6
$100
$85
$90
$80
$85
4-45
Solving the Example Problem - 2
2
3
1
4
5
6
$100
$85
$90
$80
$85
$75
$50
4-46
Solving the Example Problem - 3
2
3
1
4
5
6
$100
$85
$80
$85
$75
$50
$65
4-47
Solving the Example Problem - 4
2
3
1
4
5
6
$100
$80
$85
$75
$50
$65
$40
4-48
Solving the Example Problem - 5
2
3
1
4
5
6
$80
$85
$75
$50
$65
$40
$150
4-49
Solving the Example Problem - 6
2
3
1
4
5
6
$80
$75
$50
$65
$40
4-50
End of Chapter 4