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    Slide 2008 Thomson South-Western. All Rights Reserved

    Distribution and Network Models

    Transportation ProblemNetwork RepresentationGeneral LP Formulation

    Transshipment Problem

    Network Representation

    General LP Formulation

    Shortest route method

    Network RepresentationGeneral LP Formulation

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    Slide 2008 Thomson South-Western. All Rights Reserved

    Transportation, Assignment, andTransshipment Problems

    A network model is one which can be represented

    by a set of nodes, a set of arcs, and functions (e.g.costs, supplies, demands, etc.) associated with thearcs and/or nodes.

    Transportation, assignment, transshipment,

    shortest-route, and maximal flow problems of thischapter as well as the minimal spanning tree andPERT/CPM problems (in others chapter) are allexamples of network problems.

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    Slide 2008 Thomson South-Western. All Rights Reserved

    Transportation, Assignment, andTransshipment Problems

    Each of the five models of this chapter can be

    formulated as linear programs and solved bygeneral purpose linear programming codes.

    For each of the five models, if the right-hand sideof the linear programming formulations are all

    integers, the optimal solution will be in terms ofinteger values for the decision variables.

    However, there are many computer packages(including The Management Scientist) that contain

    separate computer codes for these models whichtake advantage of their network structure.

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    Slide 2008 Thomson South-Western. All Rights Reserved

    Transportation Problem

    The transportation problem seeks to minimize the

    total shipping costs of transporting goods from morigins (each with a supply si) to n destinations(each with a demand dj), when the unit shippingcost from an origin, i, to a destination,j, is cij.

    The network representation for a transportationproblem with two sources and three destinations isgiven on the next slide.

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    Transportation Problem

    Network Representation

    2

    c11

    c12

    c13

    c21

    c22

    c23

    d1

    d2

    d3

    s1

    s2

    Sources Destinations

    3

    2

    1

    1

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    Slide 2008 Thomson South-Western. All Rights Reserved

    Transportation Problem

    Linear Programming Formulation

    Using the notation:

    xij = number of units shipped from

    origin i to destinationj

    cij= cost per unit of shipping fromorigin i to destinationj

    si = supply or capacity in units at origin i

    dj = demand in units at destinationj

    continued

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    Transportation Problem

    Linear Programming Formulation (continued)

    1 1

    Min

    m n

    ij iji j

    c x

    1

    1,2, , Supplyn

    ij ij

    x s i m

    1

    1,2, , Demandm

    ij ji

    x d j n

    xij > 0 for all i andj

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    LP Formulation Special Cases

    The objective is maximizing profit or revenue:

    Minimum shipping guarantee from i toj:

    xij > Lij

    Maximum route capacity from i toj:

    xij < LijUnacceptable route:

    Remove the corresponding decision variable.

    Transportation Problem

    Solve as a maximization problem.

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    Transshipment Problem

    Transshipment problems are transportation problems

    in which a shipment may move through intermediatenodes (transshipment nodes)before reaching aparticular destination node.

    Transshipment problems can be converted to largertransportation problems and solved by a specialtransportation program.

    Transshipment problems can also be solved bygeneral purpose linear programming codes.

    The network representation for a transshipment

    problem with two sources, three intermediate nodes,and two destinations is shown on the next slide.

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    Transshipment Problem

    Network Representation

    2

    3

    4

    5

    6

    7

    1

    c13

    c14

    c23

    c24c25

    c15

    s1

    c36

    c37

    c46c47

    c56

    c57

    d1

    d2

    Intermediate Nodes

    Sources Destinations

    s2

    DemandSupply

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    Transshipment Problem

    Linear Programming Formulation

    Using the notation:

    xij = number of units shipped from node i to nodej

    cij = cost per unit of shipping from node i to nodej

    si= supply at origin node idj= demand at destination node j

    continued

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    Transshipment Problem

    all arcs

    Min ij ijc x

    arcs out arcs in

    s.t. Origin nodesij ij ix x s i

    xij > 0 for all i andj

    arcs out arcs in

    0 Transhipment nodesij ijx x

    arcs in arcs out

    Destination nodesij ij jx x d j

    Linear Programming Formulation (continued)

    continued

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    Transshipment Problem

    LP Formulation Special Cases

    Total supply not equal to total demand

    Maximization objective function

    Route capacities or route minimums

    Unacceptable routesThe LP model modifications required here are

    identical to those required for the special cases in

    the transportation problem.

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    14Slide 2008 Thomson South-Western. All Rights Reserved

    The Northside and Southside facilities

    of Zeron Industries supply three firms(Zrox, Hewes, Rockrite) with customizedshelving for its offices. They both ordershelving from the same two manufacturers,

    Arnold Manufacturers and Supershelf, Inc.Currently weekly demands by the users

    are 50 for Zrox, 60 for Hewes, and 40 forRockrite. Both Arnold and Supershelf can

    supply at most 75 units to its customers.Additional data is shown on the next

    slide.

    Transshipment Problem: Example

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    Because of long standing contracts based on

    past orders, unit costs from the manufacturers to thesuppliers are:

    Zeron N Zeron SArnold 5 8

    Supershelf 7 4

    The costs to install the shelving at the variouslocations are:

    Zrox Hewes RockriteThomas 1 5 8

    Washburn 3 4 4

    Transshipment Problem: Example

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    Network Representation

    ARNOLD

    WASH

    BURN

    ZROX

    HEWES

    75

    75

    50

    60

    40

    5

    8

    7

    4

    15

    8

    3

    44

    Arnold

    SuperShelf

    Hewes

    Zrox

    Zeron

    N

    ZeronS

    Rock-Rite

    Transshipment Problem: Example

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    Linear Programming Formulation

    Decision Variables Defined

    xij = amount shipped from manufacturer i to supplierj

    xjk = amount shipped from supplierj to customer k

    where i = 1 (Arnold), 2 (Supershelf)j = 3 (Zeron N), 4 (Zeron S)

    k = 5 (Zrox), 6 (Hewes), 7 (Rockrite)

    Objective Function Defined

    Minimize Overall Shipping Costs:Min 5x13 + 8x14 + 7x23 + 4x24 + 1x35 + 5x36 + 8x37

    + 3x45 + 4x46 + 4x47

    Transshipment Problem: Example

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    Constraints Defined

    Amount Out of Arnold: x13 + x14 < 75

    Amount Out of Supershelf: x23 + x24 < 75

    Amount Through Zeron N: x13 + x23 - x35 - x36 - x37 = 0

    Amount Through Zeron S: x14

    + x24

    - x45

    - x46

    - x47

    = 0

    Amount Into Zrox: x35 + x45 = 50

    Amount Into Hewes: x36 + x46 = 60

    Amount Into Rockrite: x37 + x47 = 40

    Non-negativity of Variables: xij > 0, for all i andj.

    Transshipment Problem: Example

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    The Management Scientist Solution

    Objective Function Value = 1150.000

    Variable Value Reduced CostsX13 75.000 0.000

    X14 0.000 2.000X23 0.000 4.000X24 75.000 0.000X35 50.000 0.000X36 25.000 0.000

    X37 0.000 3.000X45 0.000 3.000X46 35.000 0.000X47 40.000 0.000

    Transshipment Problem: Example

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    Solution

    ARNOLD

    WASH

    BURN

    ZROX

    HEWES

    75

    75

    50

    60

    40

    5

    8

    7

    4

    1

    58

    3 4

    4

    Arnold

    SuperShelf

    Hewes

    Zrox

    Zeron

    N

    ZeronS

    Rock-Rite

    75

    Transshipment Problem: Example

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    21Slide 2008 Thomson South-Western. All Rights Reserved

    The Management Scientist Solution (continued)

    Constraint Slack/Surplus Dual Prices

    1 0.000 0.000

    2 0.000 2.000

    3 0.000 -5.0004 0.000 -6.000

    5 0.000 -6.000

    6 0.000 -10.000

    7 0.000 -10.000

    Transshipment Problem: Example

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    The Management Scientist Solution (continued)

    OBJECTIVE COEFFICIENT RANGES

    Variable Lower Limit Current Value Upper LimitX13 3.000 5.000 7.000

    X14 6.000 8.000 No LimitX23 3.000 7.000 No LimitX24 No Limit 4.000 6.000X35 No Limit 1.000 4.000X36 3.000 5.000 7.000

    X37 5.000 8.000 No LimitX45 0.000 3.000 No LimitX46 2.000 4.000 6.000X47 No Limit 4.000 7.000

    Transshipment Problem: Example

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    The Management Scientist Solution (continued)

    RIGHT HAND SIDE RANGES

    Constraint Lower Limit Current Value Upper Limit

    1 75.000 75.000 No Limit

    2 75.000 75.000 100.0003 -75.000 0.000 0.000

    4 -25.000 0.000 0.000

    5 0.000 50.000 50.000

    6 35.000 60.000 60.0007 15.000 40.000 40.000

    Transshipment Problem: Example

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    Shortest-Route Problem

    The shortest-route problem is concerned with

    finding the shortest path in a network from onenode (or set of nodes) to another node (or set ofnodes).

    If all arcs in the network have nonnegative valuesthen a labeling algorithm can be used to find theshortest paths from a particular node to all othernodes in the network.

    The criterion to be minimized in the shortest-routeproblem is not limited to distance even though the

    term "shortest" is used in describing the procedure.Other criteria include time and cost. (Neither timenor cost are necessarily linearly related to distance.)

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    25Slide 2008 Thomson South-Western. All Rights Reserved

    Linear Programming Formulation

    Using the notation:

    xij = 1 if the arc from node i to nodej

    is on the shortest route

    0 otherwise

    cij= distance, time, or cost associated

    with the arc from node i to nodej

    continued

    Shortest-Route Problem

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    26Slide 2008 Thomson South-Western. All Rights Reserved

    all arcs

    Min ij ijc x

    arcs out

    s.t. 1 Origin nodeijx i

    arcs out arcs in

    0 Transhipment nodesij ijx x

    arcs in

    1 Destination nodeijx j

    Linear Programming Formulation (continued)

    Shortest-Route Problem

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    27Slide 2008 Thomson South-Western. All Rights Reserved

    Susan Winslow has an important business meeting

    in Paducah this evening. She has a number of alternateroutes by which she can travel

    from the company headquarters

    in Lewisburg to Paducah. The

    network of alternate routes andtheir respective travel time,

    ticket cost, and transport mode

    appear on the next two slides.

    If Susan earns a wage of $15 per hour, what routeshould she take to minimize the total travel cost?

    Example: Shortest Route

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    6

    A

    B C

    D

    E

    F

    G

    H I

    J

    K L

    M

    Example: Shortest Route

    PaducahLewisburg

    1

    2 5

    3

    4

    Network Model

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    Example: Shortest Route

    Transport Time Ticket

    Route Mode (hours) CostA Train 4 $ 20B Plane 1 $115C Bus 2 $ 10D Taxi 6 $ 90

    E Train 3 1/3 $ 30F Bus 3 $ 15G Bus 4 2/3 $ 20H Taxi 1 $ 15I Train 2 1/3 $ 15

    J Bus 6 1/3 $ 25K Taxi 3 1/3 $ 50L Train 1 1/3 $ 10M Bus 4 2/3 $ 20

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    30Slide 2008 Thomson South-Western. All Rights Reserved

    Example: Shortest Route

    Transport Time Time Ticket Total

    Route Mode (hours) Cost Cost CostA Train 4 $60 $ 20 $ 80B Plane 1 $15 $115 $130C Bus 2 $30 $ 10 $ 40D Taxi 6 $90 $ 90 $180

    E Train 3 1/3 $50 $ 30 $ 80F Bus 3 $45 $ 15 $ 60G Bus 4 2/3 $70 $ 20 $ 90H Taxi 1 $15 $ 15 $ 30I Train 2 1/3 $35 $ 15 $ 50

    J Bus 6 1/3 $95 $ 25 $120K Taxi 3 1/3 $50 $ 50 $100L Train 1 1/3 $20 $ 10 $ 30M Bus 4 2/3 $70 $ 20 $ 90

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    31Slide 2008 Thomson South-Western. All Rights Reserved

    Example: Shortest Route

    LP Formulation

    Objective FunctionMin 80x12 + 40x13 + 80x14 + 130x15 + 180x16 + 60x25

    + 100x26 + 30x34 + 90x35 + 120x36 + 30x43 + 50x45

    + 90x46 + 60x52 + 90x53 + 50x54 + 30x56

    Node Flow-Conservation Constraints

    x12 + x13 + x14 + x15 + x16 = 1 (origin)

    x12 + x25 + x26x52 = 0 (node 2)

    x13 + x34 + x35 + x36

    x43

    x53 = 0 (node 3) x14x34 + x43 + x45 + x46x54 = 0 (node 4)

    x15 x25x35x45 + x52 + x53 + x54 + x56 = 0 (node 5)

    x16 + x26 + x36 + x46 + x56 = 1 (destination)

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    Example: Shortest Route

    Solution Summary

    Minimum total cost = $150

    x12 = 0 x25 = 0 x34 = 1 x43 = 0 x52 = 0

    x13 = 1 x26 = 0 x35 = 0 x45 = 1 x53 = 0x14 = 0 x36 = 0 x46 = 0 x54 = 0

    x15 = 0 x56 = 1

    x16 = 0

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    33Slid 2008 Th S th W t All Ri ht R d