SAS Studio Recitation

Introduction to Network Models &

Facility Location Models

2
Outline
• Transportation problem
• Transhipment problem
• Network facility location problem

3
The Transportation Problem
Using SAS Studio

4
SandyCo

• Problem Background
 SandyCo has 2 facilities that mine, clean, and sort sand for use in
cement, children’s playboxes, and small beaches. They distribute sand
from their two plants to three different customer regions where it is
packaged and sold.
 Each plant has a specific maximum weekly supply of available sand
and each region has an expected minimum weekly required demand.
The cost to distribute a ton of sand differs between each plant and
region pairing due to distance and other factors.

• Problem Objective
 How much sand should SandyCo ship from each plant to each region
each week to meet demand at the lowest planned distribution costs?
5
 SandyCo – Picture & Notation
R1
P1
R2

R3

Indices P2
Plants i
Regions j
Input Data
Si  Available supply of sand from Plant i (tons) i  S
Dj  Demand for sand in Region j (tons) j  D
cij  Cost for sending sand from Plant i to Region j ($/ton) i, j
Decision Variables
xij  Flow on arc from Plant i to Region j (tons) i, j

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 P1 R1

SandyCo – Formulation R

R3

P2

Indices
Plants i
Regions j
Input Data
D1 = 25 D2 = 95 D3 = 80
S1 = 100 S2 = 125
c11 = 250 c12 = 325 c13 = 445
c21 = 275 c22 = 260 c23 = 460
Decision Variables
xij  Flow on arc from Plant i to Region j (tons) i, j

7
Transhipment Problem
Using SAS Studio

8
SandyCo Part II

• Problem Background
 SandyCo still has 2 facilities that mine, clean, and sort sand for use in
cement, children’s playboxes, and small beaches. They have added
two packaging centers to the network. The sand now moves from the
plants to the packaging centers and then to the regions.
 Each plant has a specific maximum weekly supply of available sand
and each region has an expected minimum weekly required demand.
The cost to distribute a ton of sand differs between each plant,
packaging center, and region combination due to distance and other
factors.
• Problem Objective
 How much sand should SandyCo ship from each plant to each
packaging center and then to each region each week to meet demand
at the lowest planned distribution costs?

9
 SandyCo Part II – Picture & Notation
R1

R2
P1 CA

R3
Indices CB
P2

Input Data

Decision Variables

10
 R1

SandyCo – Formulation
R2
P1 A

R3
B
P2
Indices

Input Data
S1 = 100 S2 = 125
D1 = 25 D2 = 95 D3 = 80
c1A = 190 c1B = 210
c2A = 185 c2B = 105
cA1 = 175 cA2 = 180 cA3 = 165
cB1 = 235 cB2 = 130 cB3 = 145
Decision Variables

11
Network Facility Location Problem
Using SAS Studio

12
 New England Root Beer Distributors (NERD 2)
NERD has expanded its market to 12 cities across
CO

PO

MN Where should they locate their DC?

BR

NA

Problem Objective
BO

WO

SP

PR
HA

For simplicity, assume: fi = $10,000

cij = (1 $/mile)(dij) Si = ΣDj
PMIN=PMAX = 1
NL
NH

 Find the location(s) from a list of candidates that minimizes the total costs of
delivering from this point to n destination points over a given network.
13
 New England Root Beer Distributors (NERD 2)
Indices
Distribution Centers i
Customers j

Input Data

cij = (1 $/mile)(dij)

Decision Variables
xij  Flow on arc from DC i to Customer j (units) i,
j Yi  1 if DC i is opened; =0 otherwise i  S

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New England Root Beer Distributors (NERD 2)

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