Running head: CASE STUDY 1

Case Study
John Doe
State University
CASE STUDY 2

Case Study

The scope is to study to create two models; one will show how to minimize the shipping

cost of transportation of waste from six plants to three disposal sites, the other one will illustrate

how to organize the same work using transshipment concept. The objects for transshipments are

the six plants and three disposal sites.

Transportation Model

From the viewpoint of demand and supply, the six plants are considered as supply

sources and three waste sites are demands sites; both of them have limitation, which is expressed

as a quantity that can be supplied and stored. The objective is to achieve cost minimization

under the given limitations (Reeb & Leavengood, 2002)

The solution is approached by Table 1. Transportation matrix

creating a 6 x3 matrix illustrated in Demand sources

Table 1. Each cell of transportation Supply Supply

1 2 3 Total
sources Q-ty
expressed through Xij depicts
1 35 X11 X12 X13  
quantity from the supply source to 2 26 X21 X22 X23  
3 42 X31 X32 X33  
waste disposal site. The matrix also 4 53 X41 X41 X43  
5 29 X51 X52 X53  
shows that total supply quantity is
6 38 X61 X62 X63  
223 bbls per week and the total Total 223 65 80 105 250

demand quantity is 250 bbls per week. Supply and demand are not balanced; the solution

requires to implement a dummy supply source of 27 bbls. Decision variable, in this case, is the

quantity for a site, and objective function is cost minimization. The model is represented through

the following linear equations (“Linear programing”, n.d).

CASE STUDY 3

Minimization is solved using the following equation, subject to:

Z=12X11+15X12+17X13+14X21+9X22+10X23+13X31+20X32+11X33+17X41+16X42+19X

43+7X51+14X52+12X53+22X61+16X62+18X63.

X11 + X12 + X13 = 35 X11 + X21 + X31 + X41 + X51 + X61 = 65

X21 + X22 + X 23 = 26 X12 + X22 + X32 + X42 + X52 + X62 = 80

X31 + X32 + X33 = 42 X13 + X23 + X33 + X43 + X53 + X63= 105

X41 + X42 + X43 = 53

X51 + X52 + X53 = 29

X61 + X62 + X63 = 38

The solution was obtained using the Table 2. Transportation cost matrix

“Transportation” module of POM - OM software Demand sources

(“The Transportation model”, n.d.) The shipment

Supply sources 1 2 3
from the supply source to waste the side is illustrated
1 12 15 17
in Table 3. The POM – OM solution includes a 2 14 9 10
3 13 20 11
dummy supply source for 27 bbls. The minimum 4 17 16 19
5 7 14 12
cost is $2,832; it does not include dummy supply
6 22 16 28
source quantity.
CASE STUDY 4

Table 3. Shipment from supply sources to the disposal sites

Transportation Solution
Optimal solution value
Whitewater Los Canos Duras
= $2832
Kingsport 35    
Danville     26
Macon     42
Selma 1 42 10
Columbus 29    
Allentown   38  
Dummy     27
Note: Quantity in barrels

Table 4. Cost of transportation from the plants to the disposal sites

Transportation Solution
  Whitewater Los Canos Duras
Kingsport 35/$420    
Danville     26/$260
Macon     42/$462
Selma 1/$17 42/$672 10/$190
Columbus 29/$203    
Allentown   38/$608  
Dummy     27/$0

Transshipment Model

The idea is based on the concept that shipping line will use an intermediary supply center,

which could be either a plant or waste disposal site. This concept gives a 9 x 9 matrix where

supply plus disposal sources together act as supply sources and disposal sources (Rajendran &
CASE STUDY 5

Pandian, 2012). Table 5 displays the feed matrix to achieve a solution. The values for supply

and demand quantities of the matrix are based on the following assumptions:

Table 5. Transshipment solution matrix

Demand Sites

Supp 1 2 3 4 5 6 A B C
Supply
  ly Q- Los
Sites
ty Kingsp Danvil Mac Sel Columb Allento Whitewa Can Dur
ort le on ma us wn ter os as
Kingspo
1 285 rt X11 X12 X13 X14 X15 X16 X1A X1B X1C
2 276 Danville X21 X22 X23 X24 X25 X26 X2A X2B X2C
3 292 Macon X31 X32 X33 X34 X35 X36 X3A X3B X3C
4 403 Selma X41 X42 X43 X44 X45 X46 X4A X4B X4C
Columb
5 279 us X51 X52 X53 X54 X55 X56 X5A X5B X5C
Allento
6 288 wn X61 X62 X63 X64 X65 X66 X6A X6B X6C
Whitewa XA XA
A 250 ter XA1 XA2 XA3 XA4 XA5 XA6 XAA B C
Los XB XB
B 250 Canos XB1 XB2 XB3 XB4 XB5 XB6 XBA B C
XC XC
C 250 Duras XC1 XC2 XC3 XC4 XC5 XC6 XCA B C
250 250 250 250 250 250 315 330 355

1. Each plant may absorb total demand quantity 250 bbls. in addition to its own supply

quantity,

2. Each waste site may absorb total demand quantity 250 bbls in addition to its own demand

quantity.
 CASE STUDY 6

Table 6. Transshipment cost matrix

Demand Sites
1 2 3 4 5 6 A B C
To Sites
Suppl
From Sites Danvill Columbu Los
y sites
Kingsport e Macon Selma s Allentown Whitewater Canos Duras
1 Kingsport 0 6 4 9 7 8 12 15 17
2 Danville 6 0 11 10 12 7 14 9 10
3 Macon 5 11 0 3 7 15 13 20 11
4 Selma 9 10 3 0 3 16 17 16 19
5 Columbus 7 12 7 3 0 14 7 14 12
6 Allentown 8 7 15 16 14 0 22 16 18
A Whitewater 12 14 13 17 7 22 0 12 10
B Los Canos 15 9 20 16 14 16 12 0 15
C Duras 17 10 11 19 12 18 10 15 0

The solution is achieved by solving the 9x9 matrix for cost minimization. Each Xij of the

matrix depicts the quantity it may contain in determining the minimum transportation cost. The

supply and demand constraints are obtained, in the same way as shown in the previous example.

The summation of each row of the matrix presents a supply constraint equation. The summation

of each column of the matrix presents a demand constraint. The minimization solution is

achieved using the “Transportation” module of POM - OM software. The results are

presented in Tables 7 and 8. The results illustrate the required shipment directions and associated

cost.
CASE STUDY 7

Table 7. Transshipment cost from one place to another

  Kingsport Danville Macon Selma Columbus Allentown Whitewater Los Canos Duras
Kingsport 16/$96 19/$76            
Danville             80/$720  
Macon               78/$858
Selma     17/$51 36/$108        
Columbus           65/$455    
Allentown   38/$266            
Whitewater                

Table 8. Transshipment solution

Transshipment Solution
Optimal solution value Los
Kingsport Danville Macon Selma Columbus Allentown Whitewater Duras
= $2630 Canos
Kingsport 250 16 19            
Danville   196           80  
Macon     214           78
Selma     17 250 36        
Columbus         214   65    
Allentown   38       250      
Whitewater             250    
Los Canos               250  
Duras                 250
Dummy                 27
POM-QM for Windows
CASE STUDY 8

Conclusion

In this assignment, the demand quantity is 250 bbls whereas the supply quantity is 223

bbls. In approaching cost minimization, software POM –QM used a dummy supply source in the

quantity of 27 bbls. The unbalanced demand and supply quantity is considered to be a limitation

of the study. The study shows that using transshipment the company management can reduce the

shipment cost. The shipment cost of shipment of 223 bbls without the transshipment option is

$2832 whereas with the option is $2630. Hence, transshipment, in this case is a better solution.
CASE STUDY 9

References

Linear Programming: Introduction. (n.d.). Retrieved from

http://www.purplemath.com/modules/linprog.htm

Rajendran, P., & Pandian, P. (2012). Solving Fully Interval Transshipment Problems. Retrieved

from http://www.m-hikari.com/imf/imf-2012/41-44-2012/pandianIMF41-44-2012.pdf

Reeb, J., & Leavengood, S. (2002). Transportation Problem: A Special Case for Linear

Programming Problems. Retrieved from

http://ir.library.oregonstate.edu/xmlui/bitstream/handle/1957/20201/em8779-e.pdf

http://www.prenhall.com/weiss_dswin/html/trans.htm

The Transportation Model. (n.d.). Retrieved from

http://www.prenhall.com/weiss_dswin/html/trans.htm