NETWORK OPTIMIZATION PROBLEMS

SOLUTION TO SOLVED PROBLEMS

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Assessing the Capacity of a Pipeline Network

Exxo 76 is an oil company that operates the pipeline network shown below, where each pipeline is labeled with its
maximum flow rate in million cubic feet (MMcf) per day. A new oil well has been constructed near A. They would like
to transport oil from the well near A to their refinery at G. Formulate and solve a network optimization model to
determine the maximum flow rate from A to G.

15 D
14
B 6
20 12
4 G
A 2 F
20
8 16
15
C 23
E

This is a minimum-cost flow problem. Associated with each pipe in the network will be an arc (or, for pipes which
might flow in either direction, two arcs, one in each direction). To set up a spreadsheet model, first list all of the arcs
as shown in B5:C19, along with their capacity (F5:F19). Then list all of the nodes as shown in H5:H11. All the
transshipment nodes (every node except the start node A and the end node G) will be constrained to have net flow =
0 (Supply/Demand = 0). The start node (A) and end node (G) are left unconstrained. We want to maximize the net
flow out of node A.

The changing cells are the amount of flow to send through each pipe (arc). These are shown in Flow (D5:D19) below,
with an arbitrary value of 0 entered for each. The flow through each arc is capacitated as indicated by the <= in
E5:E19.
For each node, calculate the net flow as a function of the changing cells. This can be done using the SUMIF function.
In each case, the first SUMIF function calculates the flow leaving the node and the second one calculates the flow
entering the node. For example, consider the A node (H5). SUMIF(From, Nodes, Flow) in I5 sums each individual
entry in Flow (the changing cells in D5:D19) if that entry is in a row where the entry in From (B5:B19) is the same as
in the entry in that row of Nodes (i.e., A). Since the only rows that have A in From (B5:B19) are rows 5 and 6, the
sum in the ship column is only over these same rows, so this sum is D5+D6.
The goal is to maximize the amount shipped from A to G. Since nodes B through F are transshipment nodes (net flow
= 0), any amount that leaves A must enter G. Thus, maximizing the flow out of A will achieve our goal. Thus, the
formula entered into the objective cell MaximumFlow (D21) is =I5.
The Solver information and solved spreadsheet are shown below.

Solver Parameters
Set Objective Cell: MaximumFlow
To: Max
By Changing Variable Cells:
Flow
Subject to the Constraints:
Flow <= Capacity
NetFlow = SupplyDemand
Solver Options:
Make Variables Nonnegative
Solving Method: Simplex LP

Thus, Flow (D5:D19) indicates how to send oil through the network so as to achieve the Maximum Flow (D21) of 34
thousand gallons/hour.
Driving to the Mile-High City
Sarah and Jennifer have just graduated from college at the University of Washington in Seattle and want to go on a
road trip. They have always wanted to see the mile-high city of Denver. Their road atlas shows the driving time (in
hours) between various city pairs, as shown below. Formulate and solve a network optimization model to find the
quickest route from Seattle to Denver?
Seattle
Butte
Billings
10
3 4
9 7
Portland 7 7
Boise 12 7

6 14
Cheyenne
7
Salt Lake 1
5
City
4
Grand Denver
Junction
This is a shortest path problem. To set up a spreadsheet model, first list all of the arcs as shown in B4:C19, along
with their travel time (E4:E19). Then list all of the nodes as shown in G4:G12 along with each node’s supply or
demand (J4:J12). We are sending one unit (Sarah and Jennifer’s car) from Seattle to Denver, so the supply is 1 at
Seattle and the demand is 1 at Denver. Every other node has demand 0 because if you enter the node, you must
also leave it.
The changing cells are whether or not to include an arc on the route. These are shown in OnRoute (D4:D19) below. If
the one unit (Sarah and Jennifer’s car) is shipped through an arc, it must mean they traveled along that route.
For each node, calculate the net flow as a function of the changing cells. This can be done using the SUMIF function.
In each case, the first SUMIF function calculates the flow leaving the node and the second one calculates the flow
entering the node. For example, consider the Seattle node (H4). SUMIF(From, G4, OnRoute) sums each individual
entry in OnRoute (the changing cells in D4:D19) if that entry is in a row where the entry in From (B4:B19) is the same
as in G4 (i.e., Seattle). Since G4 = Seattle and the only rows that have Seattle in From (B4:B19) are rows 4, 5, and 6,
the sum in the OnRoute column is only over these same rows, so this sum is D4+D5+D6.

The goal is to minimize the total time of the route. The cost is the SUMPRODUCT of the Time with OnRoute, or Total
Time = SUMPRODUCT(OnRoute, Time). This formula is entered into TotalTime (D21).
The Solver information and solved spreadsheet are shown below.

Solver Parameters
Set Objective Cell: TotalTime
To: Min
By Changing Variable Cells:
OnRoute
Subject to the Constraints:
NetFlow = SupplyDemand
Solver Options:
Make Variables Nonnegative
Solving Method: Simplex LP

OnRoute (D4:D19) indicates whether that arc should be included in the route. The optimal route is to go Seattle–
Butte–Billings–Cheyenne–Denver. The minimum TotalTime (D21) is 22 hours.