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# Introduction to

Management Science
Stevenson and Ozgur
First Edition

## Part 2 Deterministic Decision Models

Chapter 8

Network Optimization
Models

Learning Objectives

## 1. State why network models are important tools for

problem solving.
2. Describe the kinds of problems that can be solved
using the shortest-route algorithm and use the
algorithm to solve typical shortest-route problems.
3. Formulate the shortest-route problem as a linear
programming problem.
4. Solve the shortest-route problem using Excel.

Learning Objectives (cont’d)

## 5. Describe the kinds of problems that can be solved

using the minimal-spanning-tree algorithm and use
the algorithm to solve typical minimal-spanning-tree
problems.
6. Describe the kinds of problems that can be solved
using the maximal-flow algorithm and use the
algorithm to solve typical maximal-flow problems.
7. Formulate the maximal-flow problem as a linear
programming problem.
8. Solve the maximal-flow problem using Excel.

Networks
• Network
–A set of nodes and connecting arcs or branches. Can
be useful in representing various systems, such as
distribution systems, production systems, and
transportation systems.
• Network models are an important approach for
problem solving because:
–They can be used to model a wide range of problems.
–They are relatively simple to work with
–They provide a visual portrayal of a problem.

Frequently Used Algorithms
• Shortest-Route Algorithm
–Used for determining the shortest time, distance, or
cost from an origin to a destination through a network.
• Minimum Spanning Tree Algorithm
–Used in determining the minimum distance (cost, time)
needed to connect a set of locations into a single
system.
• Maximal Flow Algorithm
–Used for determining the greatest amount of flow that
can be transmitted through a system in which various
branches, or connections, have specified flow capacity
limitations.

Figure 8–1 A Simple Network Diagram

Example 8-1

Labeling Procedure
A label is developed for each node. The labels
consist of two numbers separated by a comma:
The first number refers to the distance from Node
1 to the labeled node along a certain path, while
the second number refers to the node that
immediately precedes this node along that path.

Example 8-1 (cont’d)

Example 8-1 (cont’d)

Figure 8–2 Network for Tri-State Shipping Company Shortest-Route
Problem

Exhibit 8-1 Input Worksheet for the Tri-State Shipping Company Shortest-
Route Problem (Beginning Node 1, Ending Node 7)

Exhibit 8-2 Parameter Specification Screen for the Tri-State Shipping
Company Shortest-Route Problem (Beginning Node 1, Ending
Node 7)

Exhibit 8–3 Output Worksheet for the Tri-State Shipping Company
Shortest-Route Problem (Beginning Node 1, Ending Node 7)X

Exhibit 8–4 Output Worksheet for the Tri-State Shipping Company
Shortest-Route Problem (Beginning Node 1, Ending Node 6)

Exhibit 8–5 Parameter Specification Screen for the Tri-State Shipping
Company Shortest-Route Problem (Beginning Node 1, Ending
Node 6)

Figure 8–3 Network for Oil Pipeline Problem

Note: Arc lengths are not precisely proportional to the distances shown on the arcs.

Example 8-3

Example 8-3 (cont’d)

Example 8-3 (cont’d)

Figure 8–4 A Flow Network

Figure 8–5 Updated Flow Network

Figure 8–6 Second Revision of the Network

Figure 8–7 Third Revision of Flow Network

Figure 8–8 Final Solution for Flow Network Example

Figure 8–9 Flow Network for Demonstration of Reverse Flow

Figure 8–10 Flow Network for Demonstration of Reverse Flow

Figure 8–11 Revised Flow Network

Table 8–1 Branches of the Network and Flow Capacities of the Branches
for the Turkmen Oil Ltd. Maximal Flow Problem

Figure 8–12 Network Diagram for the Maximal Flow Problem for Turkmen
Oil Ltd.

Exhibit 8–6 Input Worksheet for the Turkmen Oil Ltd. Maximal Flow Problem

Exhibit 8–7 Parameter Specification Screen for the Turkmen
Oil Ltd. Maximal Flow Problem

Exhibit 8–8 Output Worksheet for the Turkmen Oil Ltd. Maximal Flow
Problem

Table 8–2 Summary of the Optimal Flow Quantities for Turkmen Old Ltd.

Exhibit 8–9 Worksheet for Solved Problem 1, the Shortest-Route Problem
(Beginning Node 1, Ending Node 5)