Transportation, Transshipment, and

Assignment Problems

Prof. Yongwon Seo

([email protected])

College of Business Administration, CAU

Transportation, Transshipment, and Assignment Problems

TRANSPORTATION PROBLEM
 Transportation Model:
Example Problem Definition and Data
• How many tons of wheat to transport from each grain
elevator to each mill on a monthly basis in order to
minimize the total cost of transportation?
Grain Elevator Supply Mill Demand
1. Kansas City 150 A. Chicago 200
2. Omaha 175 B. St. Louis 100
3. Des Moines 275 C. Cincinnati 300
Total 600 tons Total 600 tons

Transport Cost from Grain Elevator to Mill ($/ton)

Grain Elevator A. Chicago B. St. Louis C. Cincinnati
1. Kansas City $6 $8 $ 10
2. Omaha 7 11 11
3. Des Moines 4 5 12

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 Transportation Model: Schematic Diagram

1 6 A
150 200
8
10

7
11
175 2 B 100
11

4
5
12
205 3 C 300

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 Transportation Model: Formulation
Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C +
4x3A + 5x3B + 12x3C
subject to:
x1A + x1B + x1C = 150
x2A + x2B + x2C = 175
x3A + x3B + x3C = 275
x1A + x2A + x3A = 200
x1B + x2B + x3B = 100
x1C + x2C + x3C = 300
xij  0
xij = tons of wheat from each grain elevator, i, i = 1, 2, 3,
to each mill j, j = A,B,C

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 Transportation Table

From A. Chicago B. St.Louis C. Supply

Cincinnati
To
1. Kansas 6 8 10 150

2. Omaha 7 11 11 175

3. Des 4 5 12 275
Moines

Demand 200 100 300 600

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 Excel Solver

Objective function

=C7+D7+E7
Cost array in
cells K5:M7
=D5+D6+D7
Decision variables in cells
C5:E7

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 Excel Solver

Supply constraints

Demand constraints

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 Solution

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 Schematic Diagram of a Transportation
Problem
• Ex) Harley’s Sand and Gravel Pit supplies topsoil for three
residential housing developments from three different “farms.”
Unit Transportation Cost

Farms Project

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 Transportation Table for Harley’s Sand
and Gravel

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 LP formulation

x11 x12 x13

x21 x22 x23
x31 x32 x33

Minimize Z  4 x11  2 x12  8 x13  5 x21  x22  9 x23  7 x31  6 x32  3x33
subject to
Farm A : x11  x12  x13  100
Farm B : x21  x22  x23  200
Farm C : x31  x32  x33  200

Project 1: x11  x21  x31  50

Project 2 : x12  x22  x32  150
Project 3 : x13  x23  x33  300

All variables  0
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 LP formulation : General Form

n m
Minimize  c x
i 1 j 1
ij ij

subject to
m

x
j 1
ij  Si , i  1, , n

x
i 1
ij  D j , j  1, , m

xij  0, for all i, j

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 Using Excel to solve transportation prob.

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 When the Shipping Route between Farm
B and Project 1 Is Prohibited

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Transportation, Transshipment, and Assignment Problems

TRANSSHIPMENT PROBLEM
 Transshipment Problems

• A transportation problem in which some locations are

used as intermediate shipping points, thereby serving
both as origins and as destinations.

• Involve the distribution of goods from intermediate

nodes in addition to multiple sources and multiple
destinations.

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 Transshipment: Example

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 Transshipment: Formulation

Minimize Z = $16x13 + 10x14 + 12x15 + 15x23 + 14x24

+ 17x25 + 6x36 + 8x37 + 10x38 + 7x46 + 11x47
+ 11x48 + 4x56 + 5x57 + 12x58
subject to:
x13 + x14 + x15 = 300
x23 + x24 + x25 = 300
x36 + x46 + x56 = 200
x37 + x47 + x57 = 100
x38 + x48 + x58 = 300
x13 + x23 - x36 - x37 - x38 = 0
x14 + x24 - x46 - x47 - x48 = 0
x15 + x25 - x56 - x57 - x58 = 0
xij  0
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 Transshipment: Excel Solver

=SUM(B6:B7) Objective function

=SUM(B6:D6)

Cost arrays

=SUM(C13:C15) =SUM(C13:E13)

Constraints for transshipment flows; i.e.,

shipments in = shipments out

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 Transshipment: Excel Solver

Transshipment
constraints in cells
C20:C22

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 Transshipment: Solution

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 Ex.
The manager of Harley’s Sand and Gravel Pit has decided to utilize two
intermediate nodes as transshipment points for temporary storage of topsoil.

Farm A

Farm B

Farm C

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 Formulation

Minimize Z  3 x14  2 x15    4 x48  5 x58

subject to
Node 1 : x14  x15  100
Node 2 : x24  x25  200
Node 3 : x34  x35  200
Node 4 : x14  x24  x34  x46  x47  x48
Node 5 : x15  x25  x35  x56  x57  x58
Node 6 : x46  x56  50
Node 7 : x47  x57  150
Node 8 : x48  x58  300
xij  0, for all i, j

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25
Transportation, Transshipment, and Assignment Problems

ASSIGNMENT PROBLEM
 Assignment Problems

• Involve the matching or pairing of two sets of items

such as jobs and machines, secretaries and reports,
lawyers and cases, and so forth.

• Have different cost or time requirements for different

pairings.

• Special form of linear programming model similar to the

transportation model.
– Supply at each source and demand at each destination limited
to one unit.

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 Assignment Model

• Problem: Assign four teams of officials to four games in

a way that will minimize total distance traveled by the
officials. Supply is always one team of officials, demand
is for only one team of officials at each game.

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 Formulation
Minimize Z = 210xAR + 90xAA + 180xAD + 160xAC + 100xBR +70xBA
+ 130xBD + 200xBC + 175xCR + 105xCA +140xCD
+ 170xCC + 80xDR + 65xDA + 105xDD + 120xDC
subject to:
xAR + xAA + xAD + xAC = 1 xij  0
xBR + xBA + xBD + xBC = 1
xCR + xCA + xCD + xCC = 1
xDR + xDA + xDD + xDC = 1
xAR + xBR + xCR + xDR = 1
xAA + xBA + xCA + xDA = 1
xAD + xBD + xCD + xDD = 1
xAC + xBC + xCC + xDC = 1

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 Excel Solver
Objective function

Decision
variables,
C5:F8

=C5+D5+E5+F5

=D5+D6+D7+D8

Mileage array

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 Excel Solver

Simplex LP

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 Solution

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 Assignment Problem: Example
• A manager has prepared a table that shows the cost of performing
each of five jobs by each of five employees (see Table 6-8).
According to this table, job I will cost $15 if done by Al. $20 if it is
done by Bill, and so on. The manager has stated that his goal is to
develop a set of job assignments that will minimize the total cost
of getting all four jobs done. It is further required that the jobs be
performed simultaneously, thus requiring one job being assigned to
each employee.
• In the past, to find the minimum-cost set of assignments, the
manager has resorted to listing all of the different possible
assignments (i.e., complete enumeration) for small problems such
as this one. But for larger problems, the manager simply guesses
because there are too many possibilities to try to list them. For
example, with a 5X5 table, there are 5! = 120 different possibilities;
but with, say, a 7X7 table, there are 7! = 5,040 possibilities.

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 Problem

Minimize Z  15 x11  20 x12    18 x54  16 x55

Subject to
x11  x12  x13  x14  x15  1
x21  x22  x23  x24  x25  1

x51  x52  x53  x54  x55  1

x11  x21  x31  x41  x51  1

x12  x22  x32  x42  x52  1

x15  x25  x35  x45  x55  1
Integer?

xij  0, for all i, j

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35
Multi-Criteria Decision-Making Models

Prof. Yong Won Seo

([email protected])

College of Business Administration, CAU

 Multi-Criteria Decision-Making
■ Study of problems with several criteria, i.e., multiple criteria,
instead of a single objective when making a decision.
■ Three techniques discussed: goal programming, the analytical
hierarchy process and scoring models.
■ Goal programming is a variation of linear programming
considering more than one objective (goals) in the objective
function.
■ The analytical hierarchy process develops a score for each
decision alternative based on comparisons of each under different
criteria reflecting the decision makers’ preferences.
■ Scoring models are based on a relatively simple weighted scoring
technique.

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 Applications of MCDA

• Some of the MCDM methods are:

– Analytic hierarchy process (AHP)
– Goal programming (GP)
– Data Envelopment Analysis (DEA)
– Inner Product of Vectors (IPV)
– Multi-attribute value theory (MAVT)
– Multi-attribute utility theory (MAUT)
– Multi-attribute global inference of quality (MAGIQ)
– ELECTRE (Outranking)
– PROMETHÉE (Outranking)
– The evidential reasoning approach
– Dominance-based Rough Set Approach (DRSA)
– Aggregated indices randomization method (AIRM)
– Nonstructural fuzzy decision support system (NSFDSS)
– Grey relational analysis (GRA)
– Superiority and inferiority ranking method (SIR method)… (source:: Wikipedia)

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Goal Programming

• Goal Programming (GP)

– A variation of linear programming that allows
multiple objectives (goals)—soft (goal) constraints or
a combination of soft and hard (nongoal) constraints
– There are priorities in the goals. (prioritized goal
programming model)
– In order to obtain an acceptable solution when there
are conflicts, it becomes necessary to make trade-
offs: satisfying hard constraints and achieving higher
levels of certain goals with sacrificing other goals.
 Standard LP Example

• Beaver Creek Pottery Company Example

Maximize Z = 40x1 + 50x2

subject to:
1x1 + 2x2  40 hours of labor (per day)
4x1 + 3x2  120 pounds of clay (per day)
x1, x2  0
Where: x1 = number of bowls produced
x2 = number of mugs produced

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 Modified Problem
• Labor : overtime allowed (but not desirable)
• Storage space can be added (but not desirable)
• The company has the following objectives, listed in order of
importance:
1. To avoid layoffs, the company does not want to use fewer than 40
hours of labor per day
2. The company would like to achieve a satisfactory profit level of $1600
per day
3. Because the clay must be stored in a special place so that it does not
dry out, the company prefers not to prepare more than 120 pounds
on hand each day
4. Because of high overtime cost, the company would like to minimize
the amount of overtime.

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 Goal Constraints

Labor goal:
x1 + 2x2 + d1- - d1+ = 40 (hours/day)

Profit goal:
40x1 + 50 x2 + d2 - - d2 + = 1,600 ($/day)

Material goal:
4x1 + 3x2 + d3 - - d3 + = 120 (lbs of clay/day)

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 Objective Function

• Minimize P1d1-, P2d2-, P3d3+, P4d1+

• Add one by one based on priorities

1. Min labor constraint (priority 1 - less than 40 hours labor)
 Minimize P1d1-
2. Add profit goal constraint (priority 2 - achieve profit of $1,600):
 Minimize P1d1-, P2d2-
3. Add material goal constraint (priority 3 - avoid keeping more
than 120 pounds of clay on hand)
 Minimize P1d1-, P2d2-, P3d3+
4. Add overtime constraint (priority 4 - minimum overtime):
 Minimize P1d1-, P2d2-, P3d3+, P4d1+

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 Graphical Interpretation

Minimize P1d1-, P2d2-, P3d3+, P4d1+

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

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 Graphical Interpretation

Minimize P1d1-, P2d2-, P3d3+, P4d1+

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

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 Graphical Interpretation

Minimize P1d1-, P2d2-, P3d3+, P4d1+

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

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 Graphical Interpretation

Minimize P1d1-, P2d2-, P3d3+, P4d1+

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

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 Graphical Interpretation

Minimize P1d1-, P2d2-, P3d3+, P4d1+

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

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