Chapter Topics

n The Transportation Problem:

• The Network Model and a
• Linear Programming Formulation

n The Assignment Problem:

• The Network Model and a
• Linear Programming Formulation

n The Transshipment Problem:

• The Network Model and a
• Linear Programming Formulation

Transportation, Assignment, and Transshipment

Problems: “Network Models”

A network model is one which can be represented by

n a set of nodes,

n a set of arcs, and

n functions (e.g. costs, supplies, demands, etc.)

associated with the arcs and/or nodes.

1
 More “Network Models”

n Transportation, assignment, and transshipment

problems of this chapter, as well as the

n shortest route, minimal spanning tree, and maximal

flow problems and

n PERT/CPM problems are all examples of network

problems.

Transportation, Assignment,
and Transshipment Problems
n Each of these three models (transportation,
assignment, and transshipment models) can be
formulated as linear programs and solved by general
purpose linear programming codes.

n For each of the three models, if the right-hand side of

the linear programming formulations are all integers,
the optimal solution will be in terms of integer values
for the decision variables.

n However, there are many computer packages which

contain separate computer codes for these models
which take advantage of their network structure.
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2
 Transportation Problem

The transportation problem seeks to minimize the total

shipping costs of transporting goods

n from m origins (each with a supply si)

n to n destinations (each with a demand dj),

n when the unit shipping cost from an origin, i, to a

destination, j, is cij.

Transportation Problem

n Network Representation

1 d1
c11
s1 1 c12
c13
2 d2
c21
c22
s2 2
c23
3 d3

SOURCES DESTINATIONS

3
 Transportation Problem

n LP Formulation
The linear programming formulation in terms of
the amounts shipped from the origins to the
destinations, xij, can be written as:

Min cijxij
ij

s.t. xij < si for each origin i

j

xij = dj for each destination j

i

xij > 0 for all i and j

7

Transportation Model Example

Problem: How many tons of coal to transport from each coal mine to
each power plant on a monthly basis in order to minimize the total cost
of transportation?
Assume: The coal has the same calory
Data: Coal Mine Supply Power Plant Demand
1. Balikpapan 150 A. Plant Jakarta 200
2. Samarinda 225 B. Plant Smrng 100
3. Palembang 275 C. Plant Gresik 300
Total 650 tons Total 600 tons

Transport Cost from coal mine to power plant

($/ton)
Coal mine A. Jakarta B. Semarang C. Gresik
1. Balikpapan $ 6 $ 8 $10
2. Samarinda 7 11 11
3. Palembang 4 5 12
8

4
 Transportation Model Example

n Network Representation
6
150 1 8 A 200
10

7
225 2 11
B 100
11

4
5
275 3 C 300
12

Coal Mine Power Plant

Transportation Model Formulation

xij = tons of wheat from each grain elevator, i,

i = 1, 2, 3, to each mill j, j = A,B,C

Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C

+ 4x3A + 5x3B + 12x3C
subject to:
x1A + x1B + x1C <= 150
x2A + x2B + x2C <= 225
x3A + X3b + x3C <= 275
x1A + x2A + x3A = 200
x1B + x2B + x3B = 100
x1C + x2C + x3C = 300
xij  0

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5
 Transportation Model Formulation

MIN = 6*X1A + 8*X1B + 10*X1C

+ 7*X2A + 11*X2B + 11*X2C
+ 4*X3A + 5*X3B + 12*X3C;

X1A + X1B + X1C <= 150;

X2A + X2B + X2C <= 225;
X3A + X3B + X3C <= 275;

X1A + X2A + X3A = 200;

X1B + X2B + X3B = 100;
X1C + X2C + X3C = 300;

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Transportation Model Formulation

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6
 Transportation Problem

The transportation problem seeks to minimize the total

shipping costs of transporting goods

n from m origins (each with a supply si)

n to n destinations (each with a demand dj),

n when the unit shipping cost from an origin, i, to a

destination, j, is cij.

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13

Transportation Problem

n Network Representation

1 d1
c11
s1 1 c12
c13
2 d2
c21
c22
s2 2
c23
3 d3

SOURCES DESTINATIONS

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7
 Transportation Problem

n LP Formulation
The linear programming formulation in terms of
the amounts shipped from the origins to the
destinations, xij, can be written as:

Min cijxij
ij

s.t. xij < si for each origin i

j

xij = dj for each destination j

i

xij > 0 for all i and j

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15

Transportation Model Formulation

xij = tons of wheat from each grain elevator, i,

i = 1, 2, 3, to each mill j, j = A,B,C

Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C

+ 4x3A + 5x3B + 12x3C

Minimize Z = C1A X1A + C1B X1B + C1C X1C  j is moving

+ C2A X2A + C2B X2B + C2C X2C  j is moving
+ C3A X3A + C3B X3B + C3C X3C  j is moving

Min z=   Cij Xij

i j

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8
 Transportation Model Formulation

Subject to:
x1A + x1B + x1C <= 150 (s1 = 150)
x2A + x2B + x2C <= 175 (s2 = 175)
x3A + x3B + x3C <= 275 (s3 = 275)
xij < si for each origin i
j

x1A + x2A + x3A = 200 (dA = 200)

x1B + x2B + x3B = 100 (dB = 100)
x1C + x2C + x3C = 300 (dC = 300)
xij  0
xij = dj for each destination j
i

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Transportation Model Formulation

xij = tons of wheat from each grain elevator, i,

i = 1, 2, 3, to each mill j, j = A,B,C

SETS:
Elevator / GE1, GE2, GE3/ : CAPACITY;
Mill / M1, M2, M3 / : DEMAND;
ROUTES( Elevator, Mill) : COST, VOLUME;
ENDSETS

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 Transportation Model Formulation

Min z=   Cij Xij =   Costij Volumeij

i j i j

MIN = @SUM( LINKS(I,J): COST(I,J) * VOLUME(I,J));

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Transportation Model Formulation

Subject to:
x1A + x2A + x3A = 200 (demandA = 200)
x1B + x2B + x3B = 100 (demandB = 100)
x1C + x2C + x3C = 300 (demandC = 300)
xij = dj for each destination j
I
! The demand constraints;
@FOR( Mill( J): [DEM]
@SUM( Elevator( I): VOLUME( I, J)) >= DEMAND( J));

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10
 Transportation Model Formulation

Subject to:
x1A + x1B + x1C <= 150 (Capacity1 = 150)
x2A + x2B + x2C <= 175 (Capacity2 = 175)
x3A + x3B + x3C <= 275 (Capacity3 = 275)
xij < si for each origin i
j
! The supply constraints;
@FOR( Elevator( I): [SUP]
@SUM( Mill( J): VOLUME( I, J)) <= CAPACITY( I));

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Transportation Model Formulation

MODEL:
!xij = tons of wheat from each grain elevator, i,
i = 1, 2, 3, to each mill j, j = A,B,C;

SETS:
Elevator / GE1, GE2, GE3/ : CAPACITY;
Mill / M1, M2, M3 / : DEMAND;
ROUTES( Elevator, Mill) : COST, VOLUME;
ENDSETS

! The objective;
[OBJ] MIN = @SUM( ROUTES: COST * VOLUME);

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11
 Transportation Model Formulation

! The demand constraints;

@FOR( Mill( J): [DEM]
@SUM( Elevator( I): VOLUME( I, J)) >= DEMAND( J));

! The supply constraints;

@FOR( Elevator( I): [SUP]
@SUM( Mill( J): VOLUME( I, J)) <= CAPACITY( I));

! Here are the parameters;

DATA:
CAPACITY = 150 175 275;
DEMAND = 200 100 300;
COST = 6 8 10
7 11 11
4 5 12;
ENDDATA
END

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Transportation Model Formulation

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 Transportation Model Formulation (Large Scale)

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25

The Transportation Problem

Assess your understanding:

n Write the objective function for the general LP

formulation of the Transportation Problem using
only words -- do not use any mathematical symbols.

n Write contraints for the general LP formulation of the

Transportation Problem using only words -- do not
use any mathematical symbols.

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 Transportation Problem: Special Situations

n LP Formulation Special Cases or Situations.

Special-case modifications to the linear programming

formulation can be made, such as:

• Minimum shipping guarantees from i to j:

xij > Lij
• Maximum route capacity from i to j:
xij < Lij
• Unacceptable routes:
delete the variable

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Transportation Problem

n To solve the transportation problem by its special

purpose algorithm, it is required that the sum of the
supplies at the origins equal the sum of the demands
at the destinations.
• If the total supply is greater than the total
demand, a dummy destination is added with
demand equal to the excess supply, and shipping
costs from all origins are zero.
• Similarly, if total supply is less than total demand,
a dummy origin is added.
n When solving a transportation problem by its special
purpose algorithm, unacceptable shipping routes are
given a cost of +M (a very large number).

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 Transportation Problem

n A transportation tableau is given below. Each cell

represents a shipping route (which is an arc on the
network and a decision variable in the LP
formulation), and the unit shipping costs are given in
an upper right hand box in the cell.

D1 D2 D3 Supply

15 30 20
S1 50

30 40 35
S2 30

Demand 25 45 10

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Formulation Practice

n Write the formulation for the following

Transportation Problem:

D1 D2 D3 Supply

15 30 20
S1 50

30 40 35
S2 30

Demand 25 45 10

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 Transportation Problem

n The transportation problem is solved in two phases:

• Phase I — Obtaining an initial feasible solution
• Phase II — Moving toward optimality
n In Phase I, the Minimum-Cost Procedure can be used
to establish an initial basic feasible solution without
doing numerous iterations of the simplex method.
n In Phase II, the Stepping Stone Method, using the
MODI method for evaluating the reduced costs may
be used to move from the initial feasible solution to
the optimal one.

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Transportation Algorithm

n Phase I - Minimum-Cost Method

• Step 1: Select the cell with the least cost. Assign to
this cell the minimum of its remaining row supply or
remaining column demand.
• Step 2: Decrease the row and column availabilities
by this amount and remove from consideration all
other cells in the row or column with zero
availability/demand. (If both are simultaneously
reduced to 0, assign an allocation of 0 to any other
unoccupied cell in the row or column before deleting
both.) GO TO STEP 1.

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16
 Transportation Algorithm

n Phase II - Stepping Stone Method

• Step 1: For each unoccupied cell, calculate the
reduced cost by the MODI method described below.
Select the unoccupied cell with the most
negative reduced cost. (For maximization problems
select the unoccupied cell with the largest reduced
cost.) If none, STOP.
• Step 2: For this unoccupied cell generate a stepping
stone path by forming a closed loop with this cell
and occupied cells by drawing connecting
alternating horizontal and vertical lines between
them.
Determine the minimum allocation where a
subtraction is to be made along this path.
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33

Transportation Algorithm

n Phase II - Stepping Stone Method (continued)

• Step 3: Add this allocation to all cells where
additions are to be made, and subtract this allocation
to all cells where subtractions are to be made along
the stepping stone path. (Note: An occupied cell on
the stepping stone path now becomes 0
(unoccupied).
If more than one cell becomes 0, make only
one unoccupied; make the others occupied with 0's.)
GO TO STEP 1.

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17
 Transportation Algorithm

n MODI Method (for obtaining reduced costs)

Associate a number, ui, with each row and vj with
each column.
• Step 1: Set u1 = 0.
• Step 2: Calculate the remaining ui's and vj's by
solving the relationship cij = ui + vj for occupied cells.
• Step 3: For unoccupied cells (i,j), the reduced cost =
cij - ui - vj.

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Example: BBC

Building Brick Company (BBC) has orders for 80

tons of bricks at three suburban locations as follows:
Northwood — 25 tons, Westwood — 45 tons, and
Eastwood — 10 tons. BBC has two plants, each of
which can produce 50 tons per week.
How should end of week shipments be made to fill
the above orders given the following delivery cost per
ton:
Northwood Westwood Eastwood
Plant 1 24 30 40
Plant 2 30 40 42

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18
 Example: BBC

n Initial Transportation Tableau

Since total supply = 100 and total demand = 80, a
dummy destination is created with demand of 20 and 0
unit costs.

Northwood Westwood Eastwood Dummy Supply

24 30 40 0
Plant 1 50

30 40 42 0
Plant 2 50

Demand 25 45 10 20

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37

Example: BBC

n Initial Transportation Tableau

Since total supply = 100 and total demand = 80, a
dummy destination is created with demand of 20 and 0
unit costs.

Northwood Westwood Eastwood Supply

24 30 40
Plant 1 50

30 40 42
Plant 2 50

Demand 25 45 10

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19
 Transportation Problem

Assess your understanding:

n Write the objective function for the Example

Problem.

n Write the Constraints for the Example Problem.

n Think of an example of this type of problem

(“transportation”) that might occur in your field of
expertise.

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Example: BBC

n Least Cost Starting Procedure

• Iteration 1: Tie for least cost (0), arbitrarily select x14.
Allocate 20. Reduce s1 by 20 to 30 and delete the
Dummy column.
• Iteration 2: Of the remaining cells the least cost is 24
for x11. Allocate 25. Reduce s1 by 25 to 5 and
eliminate the Northwood column.
• Iteration 3: Of the remaining cells the least cost is 30
for x12. Allocate 5. Reduce the Westwood column to
40 and eliminate the Plant 1 row.
• Iteration 4: Since there is only one row with two
cells left, make the final allocations of 40 and 10 to x22
and x23, respectively.
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40

20
 Example: BBC

n Iteration 1
• MODI Method
1. Set u1 = 0
2. Since u1 + vj = c1j for occupied cells in row 1, then
v1 = 24, v2 = 30, v4 = 0.
3. Since ui + v2 = ci2 for occupied cells in column 2,
then u2 + 30 = 40, hence u2 = 10.
4. Since u2 + vj = c2j for occupied cells in row 2, then
10 + v3 = 42, hence v3 = 32.

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41

Example: BBC

n Iteration 1
• MODI Method (continued)
Calculate the reduced costs (circled numbers on the
next slide) by cij - ui + vj.

Unoccupied Cell Reduced Cost

(1,3) 40 - 0 - 32 = 8
(2,1) 30 - 24 -10 = -4
(2,4) 0 - 10 - 0 = -10

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21
 Example: BBC

n Iteration 1 Tableau

Northwood Westwood Eastwood Dummy ui

24 30 40 0
Plant 1 25 5 +8 20 0

30 40 42 0
Plant 2 -4 40 10 -10 10

vj 24 30 32 0

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43

Example: BBC

n Iteration 1
• Stepping Stone Method
The stepping stone path for cell (2,4) is (2,4), (1,4),
(1,2), (2,2). The allocations in the subtraction cells are 20
and 40, respectively. The minimum is 20, and hence
reallocate 20 along this path. Thus for the next tableau:
x24 = 0 + 20 = 20 (0 is its current allocation)
x14 = 20 - 20 = 0 (blank for the next tableau)
x12 = 5 + 20 = 25
x22 = 40 - 20 = 20
The other occupied cells remain the same.

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22
 Example: BBC

n Iteration 2
• MODI Method
The reduced costs are found by calculating
the ui's and vj's for this tableau.
1. Set u1 = 0.
2. Since u1 + vj = cij for occupied cells in row 1, then
v1 = 24, v2 = 30.
3. Since ui + v2 = ci2 for occupied cells in column 2,
then u2 + 30 = 40, or u2 = 10.
4. Since u2 + vj = c2j for occupied cells in row 2, then
10 + v3 = 42 or v3 = 32; and, 10 + v4 = 0 or v4 = -10.

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45

Example: BBC

n Iteration 2
• MODI Method (continued)
Calculate the reduced costs (circled numbers on the
next slide) by cij - ui + vj.

Unoccupied Cell Reduced Cost

(1,3) 40 - 0 - 32 = 8
(1,4) 0 - 0 - (-10) = 10
(2,1) 30 - 10 - 24 = -4

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 Example: BBC

n Iteration 2
• Stepping Stone Method
The most negative reduced cost is = -4 determined
by x21. The stepping stone path for this cell is
(2,1),(1,1),(1,2),(2,2). The allocations in the subtraction
cells are 25 and 20 respectively. Thus the new solution
is obtained by reallocating 20 on the stepping stone
path. Thus for the next tableau:
x21 = 0 + 20 = 20 (0 is its current allocation)
x11 = 25 - 20 = 5
x12 = 25 + 20 = 45
x22 = 20 - 20 = 0 (blank for the next tableau)
The other occupied cells remain the same.
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47

Example: BBC

n Iteration 3
• MODI Method
The reduced costs are found by calculating
the ui's and vj's for this tableau.
1. Set u1 = 0
2. Since u1 + vj = c1j for occupied cells in row 1, then
v1 = 24 and v2 = 30.
3. Since ui + v1 = ci1 for occupied cells in column 2,
then u2 + 24 = 30 or u2 = 6.
4. Since u2 + vj = c2j for occupied cells in row 2, then
6 + v3 = 42 or v3 = 36, and 6 + v4 = 0 or v4 = -6.

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24
 Example: BBC

n Iteration 3
• MODI Method (continued)
Calculate the reduced costs (circled numbers on the
next slide) by cij - ui + vj.

Unoccupied Cell Reduced Cost

(1,3) 40 - 0 - 36 = 4
(1,4) 0 - 0 - (-6) = 6
(2,2) 40 - 6 - 30 = 4

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49

Example: BBC

n Iteration 3 Tableau
Since all the reduced costs are non-negative, this is
the optimal tableau.

Northwood Westwood Eastwood Dummy ui

24 30 40 0
Plant 1 5 45 +4 +6 0

30 40 42 0
Plant 2 20 +4 10 20 6

vj 24 30 36 -6

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 Example: BBC

n Optimal Solution

From To Amount Cost

Plant 1 Northwood 5 120
Plant 1 Westwood 45 1,350
Plant 2 Northwood 20 600
Plant 2 Eastwood 10 420
Total Cost = $2,490

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Assignment Problem

n An assignment problem seeks to minimize the total cost

assignment of m workers to m jobs, given that the cost
of worker i performing job j is cij.
n It assumes all workers are assigned and each job is
performed.
n An assignment problem is a special case of a
transportation problem in which all supplies and all
demands are equal to 1; hence assignment problems
may be solved as linear programs.
n The network representation of an assignment problem
with three workers and three jobs is shown on the next
slide.

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 Assignment Problem

n Network Representation

c11
1 1
c12
c13

c21
c22
2 2
c23

c31
c32
3 c33 3

WORKERS JOBS
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Assignment Problem

n Linear Programming Formulation

Min cijxij
ij

s.t. xij = 1 for each worker i

j

xij = 1 for each job j

i
xij = 0 or 1 for all i and j.

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27
 The Assignment Problem:

Assess your understanding:

n Write the objective function for the general LP

formulation of the Assignment Problem using only
words -- do not use any mathematical symbols.

n Write contraint for the general LP formulation of the

Assignment Problem using only words -- do not use
any mathematical symbols.

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Assignment Problem--Special Considerations:

Special considerations can include:

n A modification to the right-hand side of the first

constraint set can be made if a worker is permitted to
work more than 1 job.
n number of workers does not equal the number of jobs —
add dummy workers/jobs with 0 assignment costs as
needed. (note: this may not be necessary if a
worker/job is allowed more than one job/worker)
n worker i cannot do job j — assign cij = +M (where +M =
some very large number--implying a very large cost!).

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 Assignment Problem--Special Considerations:

Additional special considerations can include:

n maximization objective — create an opportunity loss

matrix subtracting all profits for each job from the
maximum profit for that job before beginning the
Hungarian method

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Hungarian Method

The Hungarian method solves minimization assignment

problems with m workers and m jobs.

n Step 1: For each row, subtract the minimum number in

that row from all numbers in that row.

n Step 2: For each column, subtract the minimum

number in that column from all numbers in that
column.

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29
 Hungarian Method (continued)

n Step 3: Draw the minimum number of lines to cover all

zeroes. If this number = m, STOP — an assignment can
be made.

n Step 4: Determine the minimum uncovered number (call

it d).
• Subtract d from uncovered numbers.
• Add d to numbers covered by two lines.
• Numbers covered by one line remain the same.
• Then, GO TO STEP 3.

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Hungarian Method

n Finding the Minimum Number of Lines and

Determining the Optimal Solution
• Step 1: Find a row or column with only one unlined
zero and circle it. (If all rows/columns have two or
more unlined zeroes choose an arbitrary zero.)
• Step 2: If the circle is in a row with one zero, draw a
line through its column. If the circle is in a column
with one zero, draw a line through its row. One
approach, when all rows and columns have two or
more zeroes, is to draw a line through one with the
most zeroes, breaking ties arbitrarily.
• Step 3: Repeat step 2 until all circles are lined. If this
minimum number of lines equals m, the circles
provide the optimal assignment.
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30
 Example: Hungry Owner
A contractor pays his subcontractors a fixed fee
plus mileage for work performed. On a given day the
contractor is faced with three electrical jobs associated
with various projects. Given below are the distances
between the subcontractors and the projects.
Project
A B C
Westside 50 36 16
Subcontractors Federated 28 30 18
Goliath 35 32 20
Universal 25 25 14
How should the contractors be assigned to minimize
total costs?
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61

Example: Hungry Owner:

Network Representation (note the “dummy” project)

50
West. 36
A

0 16

28
30
Fed. B
18
0

35 32
20
Gol. C
0

25 25
14
Univ. Dum.
0

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31
 The Assignment Problem:

Assess your understanding:

n Write the LP formulation for the Hungry Owner

problem.

n Think of and describe an “assignment” problem that

occurs in your field of expertise.

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63

Example: Hungry Owner

n Initial Tableau Setup

Since the Hungarian algorithm requires that there
be the same number of rows as columns, add a Dummy
column so that the first tableau is:

A B C Dummy
Westside 50 36 16 0
Federated 28 30 18 0
Goliath 35 32 20 0
Universal 25 25 14 0

For Practice: Write the Formulation for this problem.

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32
 Example: Hungry Owner

n Step 1: Subtract minimum number in each row from all

numbers in that row. Since each row has a zero, we
would simply generate the same matrix above.
n Step 2: Subtract the minimum number in each column
from all numbers in the column. For A it is 25, for B it
is 25, for C it is 14, for Dummy it is 0. This yields:

A B C Dummy
Westside 25 11 2 0
Federated 3 5 4 0
Goliath 10 7 6 0
Universal 0 0 0 0

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65

Example: Hungry Owner

n Step 3: Draw the minimum number of lines to cover all

zeroes. Although one can "eyeball" this minimum, use
the following algorithm. If a "remaining" row has only
one zero, draw a line through the column. If a
remaining column has only one zero in it, draw a line
through the row.
A B C Dummy
Westside 25 11 2 0
Federated 3 5 4 0
Goliath 10 7 6 0
Universal 0 0 0 0

n Step 4: The minimum uncovered number is 2 (circled).

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33
 Example: Hungry Owner

n Step 5: Subtract 2 from uncovered numbers; add 2 to all

numbers covered by two lines. This gives:

A B C Dummy
Westside 23 9 0 0
Federated 1 3 2 0
Goliath 8 5 4 0
Universal 0 0 0 2

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67

Example: Hungry Owner

n Step 3: Draw the minimum number of lines to cover all

zeroes.
A B C Dummy
Westside 23 9 0 0
Federated 1 3 2 0
Goliath 8 5 4 0
Universal 0 0 0 2

n Step 4: The minimum uncovered number is 1 (circled).

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 Example: Hungry Owner

n Step 5: Subtract 1 from uncovered numbers. Add 1 to

numbers covered by two lines. This gives:

A B C Dummy
Westside 23 9 0 1
Federated 0 2 1 0
Goliath 7 4 3 0
Universal 0 0 0 3

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Example: Hungry Owner

n Step 4: The minimum number of lines to cover all 0's is

four.

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 Example: Hungry Owner

n There is a minimum-cost assignment. The optimal

assignment is:

Subcontractor Project Distance

Westside C 16
Federated A 28
Universal B 25
Goliath (unassigned)
Total Distance = 69 miles

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Transshipment Problem

n Transshipment problems are transportation problems

in which a shipment may move through intermediate
nodes (transshipment nodes)before reaching a
particular destination node.
n Transshipment problems can be converted to larger
transportation problems and solved by a special
transportation program.
n Transshipment problems can also be solved by general
purpose linear programming codes.
n 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

n Network Representation

3 c36
c13 c37
s1 1 c14 6 d1
c15 c46
4 c47
c23 c24
c56 7 d2
s2 2
c25
5 c57

SOURCES INTERMEDIATE DESTINATIONS

NODES

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Transshipment Problem

n Linear Programming Formulation

xij represents the shipment from node i to node j

Min cijxij
ij

s.t. xij < si for each origin i

j

xik - xkj = 0 for each intermediate

i j node k

xij = dj for each destination j

i
xij > 0 for all i and j

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 The Transshipment Problem :

Assess your understanding:

n Write the objective function for the general LP

formulation of the Transshipment Problem using
only words -- do not use any mathematical symbols.

n For each set of constraints stated above, state what it

means -- using only words -- do not use any
mathematical symbols.

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Example: Transshipping

Thomas Industries and Washburn Corporation

supply three firms (Zrox, Hewes, Rockwright) with
customized shelving for its offices. They both order
shelving 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 for Rockwright. Both
Arnold and Supershelf can supply at most 75 units to
its customers.
Additional data is shown on the next slide.

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 Example: Transshipping

Because of long standing contracts based on past

orders, unit costs from the manufacturers to the
suppliers are:
Thomas Washburn
Arnold 5 8
Supershelf 7 4

The cost to install the shelving at the various

locations are:
Zrox Hewes Rockwright
Thomas 1 5 8
Washburn 3 4 4

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Example: Transshipping

n Network Representation
ZROX
Zrox 50

5 1
75 Arnold Thomas 5
8 8

ARNOLD Hewes 60

3 4
7
Super Wash-
75
Shelf 4 Burn 4
Rock-
Wright 40

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 Example: Transshipping

n Linear Programming Formulation

• Decision Variables Defined
xij = amount shipped from manufacturer i to supplier j
xjk = amount shipped from supplier j to customer k
where i = 1 (Arnold), 2 (Supershelf)
j = 3 (Thomas), 4 (Washburn)
k = 5 (Zrox), 6 (Hewes), 7 (Rockwright)

n Note: A common mistake in Formulation is to define

the decision variable as Xijk -- implying that you have
2x2x3 = 12 decisions, when in fact, you only have
(2x2) + (2x3) = 10 decisions.
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Example: Transshipping

n Objective Function Defined

• Minimize Overall Shipping Costs:

Min 5x13 + 8x14 +
7x23 + 4x24 +
1x35 + 5x36 + 8x37 +
3x45 + 4x46 + 4x47

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 Example: Transshipping

n Constraints Defined

Amount Out of Arnold: x13 + x14 < 75

Amount Out of Supershelf: x23 + x24 < 75
Amount Through Thomas: x13 + x23 - x35 - x36 - x37 = 0
Amount Through Washburn: x14 + x24 - x45 - x46 - x47 = 0
Amount Into Zrox: x35 + x45 = 50
Amount Into Hewes: x36 + x46 = 60
Amount Into Rockwright: x37 + x47 = 40

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

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Example: Sun Co Oil

Sunco Oil produces oil at two wells. Well 1 can produce as many as 150,000 barrels
per day, and well 2 can produce as many as 200,000 barrels per day. It is possible to
ship oil directly from the wells to Sunco’s customers in Los Angeles and New York.
Alternatively, Sunco could transport oil to the ports of Mobile and Galveston and then
ship it by tanker to New York or Los Angeles. Los Angeles requires 160,000 barrels
per day, and New York requires 140,000 barrels per day. The costs of shipping 1,000
barrels between two points are shown in Table 61. Formulate a transshipment model
(and equivalent transportation model) that could be used to minimize the transport
costs in meeting the oil demands of Los Angeles and New York.

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 Example: Sun Co Oil (2)

In Previous Problem, assume that before being shipped to Los

Angeles or New York, all oil produced at the wells must be
refined at either Galveston or Mobile. To refine 1,000 barrels of
oil costs $12 at Mobile and $10 at Galveston. Assuming that
both Mobile and Galveston have infinite refinery capacity,
formulate a transshipment and balanced transportation model to
minimize the daily cost of transporting and refining the oil
requirements of Los Angeles and New York.

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