Transportation

Global logistics
 Transportation structure
• Consists of rights-of-way,
vehicles, and carriers
operating within five basic
modes
• A mode identifies basic
transportation method or
form
• Rail
• Highway
• Water
• Pipeline
• Air
 Transport participants
• Shipper
• Consignee (Receiver)
• Carrier and Agents
• Government
• Internet
• Public
Role and perspective of participants
• Shipper and consignee have a common interest in moving
goods from origin to destination within a given time at the
lowest cost
• Carriers desire to maximize their revenue for movement while
minimizing associated costs
• Agents (brokers and freight forwarders) facilitate carrier and
customer matching
• Government desires a stable and efficient transportation
environment to support economic growth
• Public is concerned with transportation accessibility, expense,
and standards for security, safety and the environment
Comparison of fixed
and variable cost
structure of each
transport mode
Operating characteristics used to classify
transport modes
• Speed is the elapsed movement time from origin to
destination
• Availability is ability of a mode to service any given
pair of locations
• Dependability is the potential variance from expected
delivery schedule
• Capability is the ability to handle any load size or
configuration
• Frequency is the quantity of scheduled movements a
mode can handle
Highway transport is appealing partly due to
its relative ranking across characteristics
Table 8.5 Relative Operating Characteristics by Mode

Lowest rank is best

Note: Lower is better

TRANSPORTATION MODEL SCENARIO

A
(demand)
1
(supply)
B
2
(demand)
(supply)

D
(demand)

3
(supply) C
(demand)
 A TRANSPORTATION TABLE
Warehouse
A B C D
Factory 4 7 7 1
100 Factory 1
1 can supply 100
units per
12 3 8 8 period
2 200

8 10 16 5 Total
3 150 supply
capacity
450 per
Demand 80 90 120 160 period
450
Warehouse B can use 90 Total demand
units per period
per period
NETWORK PRESENTATION
· Transportation problem can be represented as a network. Circles
represent origins and destinations, and the arcs between them
represent the decision variables, i.e. the amounts shipped.

Supply Demand
Origin Destination

100 S1 4 D1 200
10
6

8
300 S2 16 D2 300
6

14 18
300 S3 10 D3 200
LINEAR PROGRAMMING FORMULATION
· Let xij be unknown number of units shipped from origin i to
destination j (i,j = 1,2,3)

min z = 4x11 + 10x12 + 6x13

+ 8x21 + 16x22 + 6x23
+ 14x31 + 18x32 + 10x33
st.

x11 + x12 + x13 < 100 x11 + x21 + x31 > 200
x21 + x22 + x33 < 300 x12 + x22 + x32 > 300 xij > 0
x31 + x32 + x33 < 300 x13 + x23 + x33 > 200

Supply constraints Demand constraints Non-negative constraints

TRANSPORTATION PROBLEM
Cleveland
(200 units)
Des Moines
required
(100 units)
capacity

Albuquerque Boston
(300 units) Evansville
(200 units)
required (300 units)
required
capacity

Ft. Lauderdale
(300 units)
capacity
TRANSPORTATION PROBLEM

To
From (Destinations)
(Sources) Albuquerque Boston Cleveland
Des Moines $5 $4 $3

Evansville $8 $4 $3

Fort Lauderdale $9 $7 $5
 UNIT SHIPPING COST: 1 UNIT, FACTORY TO
WAREHOUSE
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
(D)
Evansville 8 4 3
(E)
Ft Lauderdale 9 7 5
(F)
Warehouse
Req.
 TOTAL DEMAND & TOTAL SUPPLY

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 100
(D)
Evansville 300
(E)
Ft Lauderdale 300
(F)
Warehouse
Req. 300 200 200 700
 TRANSPORTATION TABLE

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
100
(D)
Evansville 8 4 3
300
(E)
Ft Lauderdale 9 7 5
300
(F)
Warehouse
Req. 300 200 200 700
Vogel Approximation Method (VAM)