CHAPTER 4: TRANSPORTATION Featoies Werchouses (Gouces) (Cesinatons) 100Unis DesMaines Abuqueque 200 Uns | soounits — Evansvile Boslon 200 Unis “Units Fort Lauderdale Cleveland 200 Unis Fig 1: Example of trorspertation problem 19 a network format - Albuquerque | Boston | Cleveland “A (8) (c) Factory Capacity Des Moines © 100 Evansville J ©) 300 Fort u Lauderdale 300 ) Warehouse Req 300 200 200 700 Voble 1+ Total demand & total supplyTo (Destinations) From (Sources) Albuquerque Boston Cleveland Des Moines 35 $4 33 Evansville 38 $4 33 Fort 39 7 35 Lauderdale Table. 2: Transportohon costs Albuquerque | Boston | Cleveland roy) (8) (c) Factory Capacity Des Moines 7 4 7 () 100 Evansville . 7 3 ©) 300 Fort * 7 7 Lauderdale 300 (FY Warehouse Req. 300 200 200 700 Table 3 Vans portation fableDEVELOPING INIT|AL SOLUTION : North west Comer Rule | When the data have been arranged in tabular form, we must establish an initial feasible solution to the problem. One sysiematic procedure, known as the northwest corner rule, | requires that we start in the upper-left-hand cell (or northwest corner) of the table and allocate units to shipping routes as follows: 1. Exhaust the supply (factory capacity) at each row before moving down to the next row, . Exhaust the (warehouse) requirements of each column before moving to the right to the next column, 3. Check that all supply and demands are met. Albuquerque | Boston | Cleveland @) @) (©) | Factory Capacity Des Moines [Sl [3| 0) 100 100 Evansville G 4 [| a © : | Fort 2 u e Lauderdale 300 (F) Warehouse Rea. 300 200 200 700Albuquerque | Boston | Cleveland ) ®) © | Factory Capacity Des Moines 4 3 © 100 400 > satisfied | Evansville 7 3 © 200 come Fort 8 7 & Lauderdale 300 ) Warehouse Req. 300 200 200 700 Satie-fied | Albuquerque | Boston | Cleveland A) (8) (c) Factory Capacity Des Moines 7 7 3 © 100 100 ——> satisfied Evansville i | 3 G 200 “TF loo 300 ___3( satisfied Fort 9 7 5 Lauderdale 300 ) Warehouse Rea 300 200 200 700 oathsied 4 Albuquerque | Boston | Cleveland ® 8) (©) | Factory Capacity 5] 4 3 Des Moines ny 100 100 ——3 catistied 8 4) Evansville ; © | 200 \oo 300 ___5 satisfied Fort 7 z| : Lauderdale 300 _ 100 Warehouse Rea, 300 200 200 700 cdbietieal (aehdd 1)$ Albuquerque | Boston | Cleveland (A) (B) (Cc) Factory Capacity Des Moines 7 7 3 ©) 100 100 Evansville e 4 s (ay 200 loo 300 Fort 8 u 7 I Lauderdale 300 # loo | 200 ed) Warehouse Rea. 300 200 200 700 \IWiTiAL SOLUTION » VO@EL's APPROXIMATION METHOD - DEVELOPING The Six Steps for Vogel's Approximation: 1. For each row/column, find difference between two lowest costs. . > Opportunity cost 2. Select the greatest opportunity cost. 3. Assign as many units as possible to lowest cost square in Fow/column with greatest opportunity cost. 4. Eliminate row or column that has been completely satisfied, Recompute the opportunity costs for remaining rows/columns. 6. Return to Step 2 and repeat until obtaining a feasible solution,Step 4: For each row) column, find difference between tuo lowest costs - > Opportunity cost lama _ OPPORTUNITY | 358-5 Ont 0 038 ———~ costs | 3 20 kw GF lest | | j 1° Newest ‘lum coupe | | ae : I He sie pt ps fl & : a” lowest pw 30} a a. ah | 300 2 300 200 200 70 fT: Step 9; Select the greatest opportunity cost Step 2: Bye, 5 i | T aS | | wes Ls a ieee | 100 | 8 4 3 i I 300 1 if 9 7 5 | . 300 | 2 | 300 200 200 700 Step 3: fissign ag many units as possible +2 [owes cast Syyare 10 roul column with Greatest opportunity CostStep H» Eliminate cow or column that has been completely satisfied Jren opportunity | 6 5 4 100 x x > row | : 7 ; has been satisted | 300 9 7 5 | 300 | 2 Gera gael 300 200 200 700 | : Step 5: Recompute the oppertwnity cost S for remaining Tows/ colymns ¢ Blo lowes Z4) 5G ef row sot = [ond 9 7 > Ls : a ont wid am | 2 300 200 200 700Step 6° Retin to step 2 and repeat until obteining a feasible solution \ a | OPPORTUNITY #2 -——— cosis Baa, 300Finving A LeAsT— CST SOLUTION ? 3 Stepping - Stone Method - The Five Steps of the Stepping-Stone Method: 1. Select any unused square to evaluate. 2. Begin at this square. Trace a closed path back to the original square via squares that are currently being used (only horizontal or vertical moves allowed), 3. Beginning with a plus (+) sign at the unused square, place alternate minus (-) signs and plus signs on each corner square of the closed path just traced. 4. Calculate an improvement index by adding together the u cost figures found in each square containing ¢ plus sig then subtracting the minus sign. 5. Repeat steps t to 4 until an improvement index hi -aleulated for all unused squares. > Ifallindices computed re greater than or equal to zero, @ ‘optimal solution has been reached. > If not, itis possible to improve the current solution and decrease total shipping costs. Step 41: Selecl ang unused square to dualuate 3 Albuquerque | Boston | Cleveland A (8) (c) Factory Capacity Des Moines Slotart [4] ctart [3 (0) 400 Unusde} Unused] 100 Square | Square Evansville 8 4) stact | 3) © 200 Joo] nus 300 syuare Fort [Sart d [2 7 5 Lauderdale | WNUSe loo 300 ) Square 00 Warehouse Rea. 300 200 200 700Sep 2 and Step 3 5 Executive Furniture Corporation | @ | © jenn |capacity ©) vans ro Fe |! 200] tbo 4 300 Start 4 an G8 ao sco : ) . | Waste) yo | 00 | 200 | 200 as : Ca\uiate Step: Improvement index= > 0 start eepr e426) peers Step 5: Repeat | The Executive Furniture Corporation 1 : _ umserud Boson | leven skp 1-4- a] Pe [© Des Moin oO Evansville eereitae iat (2) * . iam : : Lauder z : © % i poreeione| eamies ett | eee 7 Rear 200 | 200 | 700 start Improvement index= <0 +4-8+9-7=@) t improve aucren + solution - L Improvement index < 0]The Executive Furniture Corporation w (B) «c) iy =o Go Peni = ms 0 ana a a Warton Improvementindex= > 0 43-447-5 © The Executive Furniture Corporation [aac Clevelan Sy] Boston fio S [Ea | © fepeety >0 ain] rol Gee 400 Improvement inclex = | -5 +7-4 48-55 7 qf ts @ © For 4 Lauderda 30 @) Warehouse Req | 300 | 200 | 200 | 700 The Executive Furniture Corporation frersied Boson {ceveland : ® | @ | © (exci, — Since improvement dessin 1] Tf in iden < 05 Evansville a () . For WE vad 200 500 © Warehouse] Req 200 | 700 If cell FA is to be filled, whatever is added to this is subtracted from EA and FB. Since FB only has 100 units, this is all that can be added to FA.The Executive Furniture Corporation bau ctevetand SAM] Boson [CS Factory ®) {capacity dered yl] LF ie @) 0 ‘Evansville 4 ) © ane) Go -100 | +100 For 7 5 vasa | @_|#o0 |~ eo ‘Warshouse Rea | 300 | 200 | 20 + Allempty cells are now evaluated again. If any cel! has a negative index, the process continues and a new solution is found. Leost Get Solon ; = To0(5)4 2004) + 100(3)+ 2009) + 100 Co ) . > 3,900 Repeat step IH 5 00 x rd ; . inal Solution. ‘The Executive Furniture Corporation | 3° and Fin Pay) Boson Ney [ease The Executive Furniture Corporation = _ \ibuquerqud Boston |Cleveland] Factory “w @) (©) [Capacity Des Moine 1g oy | aE dons we YG © improvenem| For Yadex Evansville ver oe @ 300 ‘warchouse 47-4-94 lrsoyr BeyFINDING A LEAST- Cost SOLUTION = NOD! Method The five steps in the MOD! Method: 4. Compute the values for each row and column: set Ri + Kj = Ci for those squares currently used or occupied. Set Ri = 0. Solve the system of equations for Ri and Kj values. Compute the improvement index for each unused square by the formula: Improvement index = Cij- Ri- Kj) | &. Select the best negative index and proceed to solve the problem as you did using the stepping-stone method Jow te Use the MODI Approach In applying the MODI method, we begin with an initial solution obtained by using the northwest corner rule? But now we must compute a value for each row (cal the values R,, RyRy there are three rows) and foreach column (Ky Key K,) in the transportation table. In general, we let . AR, = value assigned to row i K; = value assigned to cohtimn j Gj = cost in square ij (cost of shipping from source ito destination j)Kj Ky kK, Ks. Ri From To A B c Fac Cap Ry D 100 G * a 100 R; E 200 @| 100 = = 300 Rs F 8 | 100 200 fol 300 Ware Req 300 200 200 700 Step 1 : Set up an equation for each OCCUPIED SQUARE. oReNe occupied square - Ri +ky 1 Ki=5 2. R.=3 3. Ket 4 Rs=6 5. Ke & mania junused cal 200 Az unused cellSteo 3: Compute the Improvement Index for EACH UNUSED CELL Improvement index I; = Cy— Ri - K; Oo D—B index = log = Cy — 4-0- = 43 Q@ Or Cinder = loc = C39 R= Ky 3- 0-(1) = 484 @ E-Cindex Cas Re— Ky 3-3 =(1) 431 F =A index = Ip 8 Cu = Rs~ a Using the|stepping stone methodfor the -ve improvement index. Ki Ky Ke Ka Ri From To. A 8 cl Fac Cap Ry o 100s 4 3 100 R; EI =200, jo0_ 3 300 Rs F * 400 7 [200s 300 Ware Req 300, 200 200 700 * select the smallest Q found in those squares containing minus signs K K Ke K, Ri From To. A B cI Fac Cap R, 3 400 100) R, E 100) 200 300 R: F 100 200 300, Ware Req 300 [200 200, 700 Retum to the step 1‘Iteration 2 K K K K Ri From To A B Cc Fac Cap Ri o 100 — 4 3 100 Re E 100 @| 200 Gi 3 [300 Re F 100 7 [200 Gy 300 WareReg | 300 200 200 700 Step 1: Set up an equation for each OCCUPIED SQUARE 10 RAKES 20 Ret Ky=8 i uare 3. Ret Ka=4 occupied a” 4. Rs+K=9 Ri +k; 5 Rat K=5 Step 2: LetfRT | 1 RAKES O+K:=5, Ki=5 Hl f 2 R,+K=8 f Ro+5=8, Re=3 {i i 3 RetKe=4 3424, Ke1 4 RotK=9 R)+5=9, Ro=4 5. Rs+K; | 4 +Ks=5, K KK Ks | R_|-FromTo A B c Fac Cap Rif Do | 100) 5 [unused cell [unused cells | 100 H R, I E 1100 | 200 « [unusedcells | 300 Rs F [100 5 |Unused cell” | 200 s| 300} | Ware Req | 300 200 200 | 700 4Step 3: Compute the Improvement Index for EACH UNUSED CELL. Improvement index ly = Cy— Rj - Kj D-B index = +83 = +82 = +84 Using the[stepping stone method for the -ve_ improvement index. Se =e mprovement K Ke Ki Ky Ri From To A B c Fac Cap Rr D 100 100, R E “100 00 = 300 Rs F +100 200 ‘300 ‘Ware Req 300) 200 200 700 * select the smallest Q found in those squares containing minus signs Ki Ky Ke Ka R From To A 8 Cc Fac Cap R D 100 700 Re E 200 700 300 Re F 200 700 300) Ware Req 300 200 200, 700) Return to step 4Heration 3 K K Ke K& _| R From To eee | See c Fac Cap Ry 5 a) a 2 400 Re E 3200 G)| 100 G30 Rs Ei 200 BY 7 [400 @I 300. Ware Req [300 200 200 700 Step 1: Set up an equation for each OCCUPIED. SQUARE: 1.0 Ritky=5 ‘ 2 Ret Kae occupied squat? 3. Ro + Ks=3 4 RotkKi=9 5 ORs +K=5 Step 2: Let[R1 = 0; 4.0 RAKES O+k Ki=5 20 Ret Kee 24K: K,=2 3. Ret Ky=3 Ro+1=3, Re=2 | i | 4.0 Rat Keo Ro+5=9, Ry=4 5. Rot Ke A+K=5, ' % iG Ke i R From To A 5 {RR D 1100, 5 |anased ce “RE Ise ce! 200 | Re 1 FE | 200 = lunused cell? 4 TWereRea tT 300 | 200Step 3: Compute the Improvement Index for EACH UNUSED CELL. Improvement index I, = C;—R,- K, improvencd) index all. posdive (70) = +83 This table contains the optimal shipping assignment because each improvement index that can be computed at this point is grater than or equal to zero. Total cost : 100 (5) + 200 (9) + 200 (4) + 100 (3) + 100 (5) $3900. x