Lecture 6 Distribution & Network Models

We will be discussion the following

Distribution Model
• Find the most efficient way to transport goods in a supply
chain.
Network Model
• Find the shortest path through a network using the
Shortest-Route technique.
• Determine the maximum flow through a network using the
Maximal-Flow technique.
• Connect all points of a network while minimizing total
distance using the Minimal-Spanning Tree technique.

Slide 1
 Example: Bank Location

Ohio Trust want to have business in all 20 counties in Ohio. Principal

Place of Business (PPB) need to be establish for it to have business
in the county or any adjacent counties. What is the minimum number
of PPB that it need to acquire?

2
3
 Solution for Ohio
Trust
Interpretation:

How many PPB are

required?
Ans:____

Which are the counties:

Ans:
a.
b.
c.
d.
e.

In reality, are the counties

equally important? Y/N
4
5
 Distribution System Design

Martin Beck (MB) Company operates a plant in St. Louis with an annual
capacity of 30,000 units. Product is shipped to regional distribution centres
in Boston, Atlanta and Houston. MB plans to increase capacity by
constructing a new plant in one or more of the following cities: Detroit,
Toledo, Denver or Kansas City. The estimated annual fixed cost and the
annual capacity for the four proposed plants are:

The company’s long-range planning group develop forecasts of the

anticipated annual demand at the distribution centres as follows:

6
7
 Distribution System Design

The shipment cost per unit from each plant to the distribution centre is:

What is the objective function (O.F.)? To max profit or min cost?

What are the cost components?

Transportation cost:
Annual operation (fixed) cost:

The 0-1 variables can be used to solve this distribution system design.
8
y1= 1 if a plant is constructed in Detroit; 0 if not
y2= 1 if a plant is constructed in Toledo; 0 if not
y3= 1 if a plant is constructed in Denver; 0 if not
y4= 1 if a plant is constructed in Kansas; 0 if not

xij= the units shipped in thousand from plant i to distribution centre j

i= 1,2,3,4,5 and j= 1,2,3
The annual transportation cost in thousand of dollars is:
_________________________
The annual fixed cost of operating the new plant(s) in thousand dollars is:
_________________________
Capacity constraint, e.g. Detroit: __________________________

Do the same constraint inequality for Toledo, Denver & Kansas

How about capacity for St. Louis? _____________________
The demand constraint for Boston: ____________________
9
Do the same constraint for Atlanta and Houston
Model for MBC

10
 MS Solution for MBC

Interpretation:
The min. cost is _______ thousand
Which plant need to be built?
Ans:________

Is the annual cost of Kansas included

in the total cost? *Yes/No

What is the number of units from

Kansas(i=4) to Atlanta (j=2)?
Ans:_______

If MBC decides that Detroit (y1) or

Toledo (y2) cannot both have planted
build because they are too close, what
additional constraint you will add?

Ans: ____________
11
 Network Model 1: Shortest-Route
The objective is to determine the shortest path between any pair of
nodes in a network.
• The shortest-route problem is concerned with finding the
shortest path in a network from one node (or set of nodes) to
another node (or set of nodes), e.g. e.g. What is the shortest
route for SPH print centre in Jurong to deliver newspaper to
SMU in town?

• If all arcs in the network have nonnegative values then a labeling

algorithm can be used to find the shortest paths from a particular
node to all other nodes in the network.

• The criterion to be minimized in the shortest-route problem is not

limited to distance even though the term "shortest" is used in
describing the procedure. Other criteria include time and cost.
(Neither time nor cost are necessarily linearly related to
distance.) Slide 12
 Shortest-Route: Diagram Method
Note: We need to use the following notations:
[ ] to represent a Permanent Label
( ) to represent a Tentative Label

Step 1: Assign node 1 the permanent label [0,S]. The first number is
the distance from node 1;
the second number is the preceding node. Since node 1 has no
preceding node, it is labeled S for the starting node.

Step 2: Assign tentative labels, (d,n), for the nodes that can be
reached directly from node 1
where
d = the direct distance from node 1
n indicates the preceding node
Step 3: Make a tentative label permanent and repeat steps 2 & 3.

13
 Example: Shortest Route
• Find the Shortest Route From Node 1 to All
Other Nodes in the Network:
5
2 5

4 6
3
2
7 3 7
1 3

5 1 2
6
4 6
8

The numbers could represent time, distance or any utility Slide

values14
 Example: Shortest Route
• Iteration 1
– Step 1: Assign Node 1 the permanent label. Node 1: [0,S]
– Step 2: Since Nodes 2, 3, and 4 are directly connected to
Node 1, assign the following tentative labels:
Node 2: (4,1)
Node 3: (7,1) (4,1)
Node 4: (5,1) 5
2 5

4 6
3 2
7 3 7
[0,S] 1 3 (7,1)

5 1 2
6
(5,1) 4 6
8 Slide 15
 Example: Shortest Route
• Iteration 1
– Node 2 is the tentatively labeled node with the smallest
distance (4) , and hence becomes the new permanently
labeled node.
– Make Node 2 permanent:
Node 2: [4, 1] [4,1]
5
2 5

4 6
3 2
7 3 7
[0,S] 1 3 (7,1)

5 1 2
6
(5,1) 4 6
8 Slide 16
 Example: Shortest Route
• Iteration 1
For each subsequent node connected to Node 2, compute
the total distance. They are:
Node 5: 5 + 4 = 9 (assign tentative label to Node 5 of
(9,2) since node 5 had no label.)
Node 3: 3 + 4 = 7 (not smaller than current label; do not
change.
[4,1] (9,2)
5
2 5

4 6
3 2
7 3 7
[0,S] 1 3 (7,1)

5 1 2
6
(5,1) 4 6 Slide 17
8
 Example: Shortest Route
• Solution Summary

Node Minimum Distance Shortest Route

2 4 1-2
3 6 1-4-3
4 5 1-4
5 8 1-4-3-5
6 11 1-4-3-5-6
7 13 1-4-3-5-6-7

• Try starting writing from the last node backwards

Slide 18
 Example: Shortest Route

What if you do not have the MS which contains a

Shortest-Route module that finds all the route
distances, but you need to find the shortest route?
Slide 19
Shortest-Route Problem

Solution by Linear Programming

Formulation

Using the notation:

xij = 1 if the arc from node i to node j

is on the shortest route
0 otherwise

cij = distance, time, or cost associated

with the arc from node i to node j

continued
20
Linear Programming Formulation (continued)

21
 Example
• Gorman Construction company has several worksite.
The numbers shown are distance in km. Find the
shortest route to each site using diagram method.

Slide 22
Example

Slide 23
Construct a LP Model for Gorman

Slide 24
 LP Model for Gorman

Ref to Pg 283 Fig 6.15 for MS Output:

Shortest distance from node 1 to 6 = 32
X13=x32=x24=x46=1
Shortest route is 1->3->2->4->6
Slide 25
 Network Model 2: Maximal Flow
• The maximal flow problem is concerned with determining
the maximal volume of flow from one node (called the
source) to another node (called the sink) through a
network.

This technique can determine the maximum number of

vehicles (cars, trucks, etc.) that can go through a
network of roads from one location to another.

• In the maximal flow problem, each arc has a maximum

arc flow capacity which limits the flow through the arc.

Slide 26
Slide 27
 LP Model for Gorman (Pg 282)

Xij = 0,1 for all i & j

Ref to Pg 283 Fig 6.15 for MS Output:

Shortest distance from node 1 to 6 = 32
X13=x32=x24=x46=1
Shortest route is 1->3->2->4->6
Slide 28
 Example: Maximal Flow

National Express operates a fleet of cargo planes and

is in the package delivery business. NatEx is interested
in knowing what is the maximum it could transport in
one day indirectly from San Diego to Tampa
(via Denver, St. Louis, Dallas, Houston and/or
Atlanta) if its direct flight was out of
service. NatEx's indirect routes from
San Diego to Tampa, along with their
respective estimated excess shipping
capacities (measured in hundreds of
cubic feet per day), are shown on the next slide. Is
there sufficient excess capacity to indirectly ship 5000
cubic feet of packages in one day?

29
Example: Maximal Flow

Network Model
3
Denver 2 5 St. Louis
3
4 2 3 2
3 4
San 4 3
Diego 1 4 7 Tampa
3 1
3 5 1 5 Dallas
Houston 3 6 Atlanta
6

30
 Example: Maximal Flow
• Network Model Redrawn
3 3
2 5
0 4 2
2

Source 4 3 3 0
4 0 3 0
1 4 7
3 5 1 0 Sink
3 1
0 3 6 5
6 0

31
 Example: Maximal Flow
There is no path with flow capacities greater than zero in
all its arches.
Iteration Path Maximum Flow
1
2
3
4
5

Total

In shortest route problem, you write the route table after

the solution; in maximum flow problem, you write for
Slide 32
each path as you solve it
What are the possible applications of
maximum flow method?

Slide 33
 Example: Maximal Flow

• A capacitated transshipment model can

be developed for the maximal flow
problem.
• We will add an arc from the sink node
back to the source node to represent the
total flow through the network.
• There is no capacity on the newly added
sink-to-source arc.
• We want to maximize the flow over the
sink-to-source arc.
Slide 34
 Maximal Flow Problem

• LP Formulation
(as Capacitated Transshipment Problem)
– There is a variable for every arc.
– There is a constraint for every node; the flow
out must equal the flow in.
– There is a constraint for every arc (except the
added sink-to-source arc); arc capacity
cannot be exceeded.
– The objective is to maximize the flow over the
added, sink-to-source arc.
Slide 35
Example: Maximal Flow

Modified Network Model

3
2 5
3
4 2 3 2
Source 3 4 Sink
4 3
1 4 7
3 1
3 5 1 5
3 6
6

36
 Maximal Flow Problem
• LP Formulation
(as Capacitated Transshipment Problem)

s.t.

(xij represents the flow from node i to node j)

Slide 37
 Example: Maximal Flow

• LP Formulation
– 18 variables (for 17 original arcs and 1 added arc)
– 24 constraints
• 7 node flow-conservation constraints
• 17 arc capacity constraints (for original arcs)

Slide 38
 Example: Maximal Flow

• LP Formulation
– Objective Function
Max x71
– Node Flow-Conservation Constraints
x12 + x13 + x14 – x71 = 0 (node 1)
– x12 + x24 + x25 – x42 – x52 = 0 (node 2)
– x13 + x34 + x36 – x43 = 0 (and so on)
– x14 – x24 – x34 + x42 + x43 + x45 + x46 + x47 – x54 – x64 = 0
– x25 – x45 + x52 + x54 + x57 = 0
– x36 – x46 + x64 + x67 = 0
– x47 – x57 – x67 + x71 = 0
Slide 39
 Example: Maximal Flow

• LP Formulation (continued)
– Arc Capacity Constraints

x12 < 4 x13 < 3 x14 < 4

x24 < 2 x25 < 3

x34 < 3 x36 < 6

x42 < 3 x43 < 5 x45 < 3 x46 < 1 x47 < 3

x52 < 3 x54 < 4 x57 < 2

x64 < 1 x67 < 5

Slide 40
Example: Maximal Flow

Alternative Optimal Solution #1

Objective Function Value = 10.000

Variable Value Variable Value

x12 3.000 x45 0.000
x13 3.000 x46 0.000
x14 4.000 x47 3.000
x24 1.000 x52 0.000
x25 2.000 x54 0.000
x34 0.000 x57 2.000
x36 5.000 x64 0.000
x42 0.000 x67 5.000
x43 2.000 x71 10.000

41
Example: Maximal Flow
Alternative Optimal Solution #1

2
2 5
3 1 2
Source Sink
4 3
1 4 7

3 2 5
10 3 6
5

42
Example: Maximal Flow

Alternative Optimal Solution #2

Objective Function Value = 10.000

Variable Value Variable Value

x12 3.000 x45 0.000
x13 3.000 x46 1.000
x14 4.000 x47 3.000
x24 1.000 x52 0.000
x25 2.000 x54 0.000
x34 0.000 x57 2.000
x36 4.000 x64 0.000
x42 0.000 x67 5.000
x43 1.000 x71 10.000

43
 Example: Maximal Flow

• Alternative Optimal Solution #2

2
2 5
3 1 2
Source Sink
4 3
1 4 7
1
3 1 5
10 3 6
4

Slide 44
 Network Model 3. Minimal-Spanning Tree

Definition:
The Minimal-Spanning Tree technique determines
the path through the network that connects all the
points while minimizing total distance.
For example:
If the points represent houses in a subdivision, the
minimal spanning tree technique can be used to
determine the best way to connect all of the
houses to electrical power, water systems, etc.
in a way that minimizes the total distance or length
of power lines or water pipes.

45
 Minimal-Spanning Steps

1. Select any node in the network.

2. Connect this node to the nearest node
minimizing the total distance.
3. Find and connect the nearest shortest
unconnected node to one of the connected
nodes.
4. Repeating the third step until all nodes are
connected.

46
 Example: Minimal Spanning Tree
• Find the Minimal Spanning Tree:

3 60
45 9
20 30
50
1 45
4 6
40 40
35
30
5 15
25 20
7
10
2 35
30
25
50 8
47
 Example: Minimal Spanning Tree
• Optimal Spanning Tree

3 60
45 9
20 30
50
1 45
4 6
40 40
30 35
5 15
25
7 20
10
2 35
30
50 25
8
48
Class Activity 1: Shortest Route by Linear Programming

Susan Winslow has an important business meeting

in Paducah this evening. She has a number of
alternate
routes by which she can travel
from the company headquarters
in Lewisburg to Paducah. The
network of alternate routes and
their respective travel time,
ticket cost, and transport mode
appear on the next two slides.
If Susan earns a wage of $15 per hour, what route
should she take to minimize the total travel cost?.
Work out a Linear Programming Model to solve it.
49
Shortest Route

Network Model

F
2 5
K L
A
B G
C J
3
6
1
D I
H Paducah
Lewisburg E M
4

50
Example: Shortest Route
Transport Time Ticket
Route Mode (hours) Cost
A Train 4 $ 20
B Plane 1 $115
C Bus 2 $ 10
D Taxi 6 $ 90
E Train 3 1/3 $ 30
F Bus 3 $ 15
G Bus 4 2/3 $ 20
H Taxi 1 $ 15
I Train 2 1/3 $ 15
J Bus 6 1/3 $ 25
K Taxi 3 1/3 $ 50
L Train 1 1/3 $ 10
M Bus 4 2/3 $ 20

Hint: First, workout the cost for each route, then 51

formulate the Linear Programming model
 Activity 2
• Find the maximum flow from node 1 to node 7 of the following
network, follow the indicated direction.

Slide 52