Tc Total Transportation Cost

V Volume at point i
Ri Transportation rate to point i
di distance to point i from the facility to be located

Point i Products Location Annual Volume,cwt Rate Rs/cwt/km Xi

A A Gujarat 8000 0.02 0.6
B B Bangalore 10,000 0.02 8.6
C A&B Cochin 5000 0.05 2
D A&B Chennai 3000 0.05 5.5
E A&B Delhi 4000 0.05 7.9
F A&B Kolkata 6000 0.05 10.6

X~ ViRiXi/ViRi 6.27063492063492
Y~ ViRiYi/ViRi 4.3952380952381
 K(Map Scaling
Yi ViRi ViRiXi ViRiYi Factor) TC
7.3 160 96 1168 500 509705.748
3 200 1720 600 263 271693.245
3 250 500 750 623 561564.611
2.4 150 825 360 178 160222.248
5.5 200 1580 1100 102 196370.531
5.2 300 3180 1560 186.4 660235.01
1260 7901 5538 2359791.39
 Coordinated
Source /Markets Ton/Km Ri Tons Dn Xn Yn dn
A 0.02 500 0.6 7.3 4.51316425
Sources B 0.02 300 8.6 3 6.40095865
Location C 0.05 700 2 3 0.21490231
D 0.05 225 5.5 2.4 3.36974276
Market E 0.05 150 7.9 5.5 6.19295157
Location F 0.05 250 10.6 5.2 8.66389157

Facility Location

X= 2.199538736604
Y= 3.079795344307

Total Cost
Optimization
Factor 283.7143628723
 Production and Transportation Cost per unit
Factory/Markets Gujarat Bangalore Cochin Chennai Delhi Kolkata Capacity
A 910 953 775 740 864 936 350
B 1036 1083 622 853 741 830 400
C 727 788 977 755 1022 976 450
D 790 785 808 742 773 860 300
E 838 782 1003 892 978 878 400
Demand 200 135 280 200 125 200
Decision Variables
Factory/Markets Gujarat Bangalore Cochin Chennai Delhi Kolkata Supply
A 0 0 0 200 0 0 200
B 0 0 280 0 120 0 400
C 200 0 0 0 0 0 200
D 0 0 0 0 5 200 205
E 0 135 0 0 0 0 135
Demand 200 135 280 200 125 200

Objective Function
Cost(Rs) 837915
Fixed Cost
78000 Production Facilities: 1900(000) units
42000 Demand: 1140(000) units
36000
38000 Objective Function: Minimize Costs of Producing and shipping from factory to market
34000 Costs include: Total Cost of Production, transportation and inventory

Constraints:
Allocation>=0
All the Demand in each city should be met
Production Supply should not be greater than the Plant Capacity

Network Optimization Models

A manager decides on the location and capacity allocation for each facility. Besides locating the
facilities, a manager also decides how markets are allocated to facilities.
This allocation must account for customer service constraints in terms of
response time. The demand allocation decision can be altered on a regular basis as costs change
and markets evolve. When designing the network, both location and allocation decisions are
made jointly.
Each year, managers must decide how to allocate the demand to their production facilities as
demand and costs change.
y to market