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Chapter 14-2 - Applications of Linear Optimization - Transportation Problem

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70 views5 pages

Chapter 14-2 - Applications of Linear Optimization - Transportation Problem

Uploaded by

Pankaj Marye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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3/27/2021 Transportation Problem in Excel - Easy Excel Tutorial

Excel Easy  
#1 Excel tutorial on the net Excel Introduction Basics Functions Data Analysis VBA 300 Examples Ask us

Transportation Problem Search Entire Site Go


 
Formulate the Model | Trial and Error | Solve the Model
Chapter
Use the solver in Excel to find the number of units to ship from each factory to each customer
Solver
that minimizes the total cost.

Formulate the Model


The model we are going to solve looks as follows in Excel. Learn more, it's easy
Transportation Problem

Assignment Problem

Shortest Path Problem

Maximum Flow Problem

Capital Investment

Sensitivity Analysis

Download Excel File


transportation-problem.xlsx

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300 Examples

1. To formulate this transportation problem, answer the following three questions.

a. What are the decisions to be made? For this problem, we need Excel to find out how many
units to ship from each factory to each customer.

b. What are the constraints on these decisions? Each factory has a fixed supply and each
customer has a fixed demand.

c. What is the overall measure of performance for these decisions? The overall measure of
performance is the total cost of the shipments, so the objective is to minimize this quantity.

2. To make the model easier to understand, create the following named ranges.

Range Name Cells


UnitCost C4:E6
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3/27/2021 Transportation Problem in Excel - Easy Excel Tutorial

Shipments C10:E12
TotalIn C14:E14
Demand C16:E16
TotalOut G10:G12
Supply I10:I12
TotalCost I16

3. Insert the following functions.

Explanation: The SUM functions calculate the total shipped from each factory (Total Out) to each
customer (Total In). Total Cost equals the sumproduct of UnitCost and Shipments.

Trial and Error


With this formulation, it becomes easy to analyze any trial solution.

For example, if we ship 100 units from Factory 1 to Customer 1, 200 units from Factory 2 to
Customer 2, 100 units from Factory 3 to Customer 1 and 200 units from Factory 3 to Customer 3,
Total Out equals Supply and Total In equals Demand. This solution has a total cost of 27800.

It is not necessary to use trial and error. We shall describe next how the Excel Solver can be used
to quickly find the optimal solution.

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3/27/2021 Transportation Problem in Excel - Easy Excel Tutorial

Solve the Model


To find the optimal solution, execute the following steps.

1. On the Data tab, in the Analyze group, click Solver.

Note: can't find the Solver button? Click here to load the Solver add-in.

Enter the solver parameters (read on). The result should be consistent with the picture below.

You have the choice of typing the range names or clicking on the cells in the spreadsheet.

2. Enter TotalCost for the Objective.

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3/27/2021 Transportation Problem in Excel - Easy Excel Tutorial

3. Click Min.

4. Enter Shipments for the Changing Variable Cells.

5. Click Add to enter the following constraint.

6. Click Add to enter the following constraint.

7. Check 'Make Unconstrained Variables Non-Negative' and select 'Simplex LP'.

8. Finally, click Solve.

Result:

The optimal solution:

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3/27/2021 Transportation Problem in Excel - Easy Excel Tutorial

Conclusion: it is optimal to ship 100 units from Factory 1 to Customer 2, 100 units from Factory 2
to Customer 2, 100 units from Factory 2 to Customer 3, 200 units from Factory 3 to Customer 1
and 100 units from Factory 3 to Customer 3. This solution gives the minimum cost of 26000. All
constraints are satisfied.

2/7 Completed! Learn much more about the solver >


Next Chapter: Analysis ToolPak

Transportation Problem • © 2010-2021


Excel is Awesome, we'll show you: Introduction • Basics • Functions • Data Analysis • VBA

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