224 Chapter Six Network Optimization Problems

6.14. You need to take a trip by car to another town that you j
have never visited before. Therefore, you are studying a map to
determine the shortest route to your destination. Depending on 1 2 3
which route you choose, there are five other towns (call them A, i
B, C, D, E) through which you might pass on the way. The map 0 $8,000 $18,000 $31,000
shows the mileage along each road that directly connects two 1 10,000 21,000
towns without any intervening towns. These numbers are sum- 2 12,000
marized in the following table, where a dash indicates that there
is no road directly connecting these two towns without going Management wishes to determine at what times (if any) the trac-
through any other towns. tor should be replaced to minimize the total cost for the tractor(s)
over three years.
Miles between Adjacent Towns a. Formulate a network model for this problem as a
Town A B C D E Destination shortest path problem.
E* b. Formulate and solve a spreadsheet model for this
Origin 40 60 50 — — —
A 10 — 70 — —
problem.
B 20 55 40 — 6.16. One of Speedy Airlines’s flights is about to take off
C — 50 — from Seattle for a nonstop flight to London. There is some flex-
D 10 60 ibility in choosing the precise route to be taken, depending upon
E 80 weather conditions. The following network depicts the possible
routes under consideration, where SE and LN are Seattle and
a. Formulate a network model for this problem as London, respectively, and the other nodes represent various
a shortest path problem by drawing a network intermediate locations.
where nodes represent towns, links represent
roads, and numbers indicate the length of each 3.5
A D
link in miles.
E* b. Formulate and solve a spreadsheet model for this 3.4

3.4
problem.
4.6

c. Use part b to identify your shortest route. 3.6

d. If each number in the table represented your cost
(in dollars) for driving your car from one town to 4.7 3.2 3.6
SE B E LN
the next, would the answer in part c now give your
minimum-cost route? 3.3
4.

e. If each number in the table represented your time

2

3.8
(in minutes) for driving your car from one town to
3.5
the next, would the answer in part c now give your
minimum-time route? 3.4
C F
6.15.* At a small but growing airport, the local airline com-
pany is purchasing a new tractor for a tractor-trailer train to bring
luggage to and from the airplanes. A new mechanized luggage The winds along each arc greatly affect the flying time
system will be installed in three years, so the tractor will not be (and so the fuel consumption). Based on current meteorologi-
needed after that. However, because it will receive heavy use, cal reports, the flying times (in hours) for this particular flight
so that the running and maintenance costs will increase rapidly are shown next to the arcs. Because the fuel consumed is so
as it ages, it may still be more economical to replace the trac- expensive, the management of Speedy Airlines has established a
tor after one or two years. The next table gives the total net policy of choosing the route that minimizes the total flight time.
discounted cost associated with purchasing a tractor (purchase a. What plays the role of distances in interpreting this
price minus trade-in allowance, plus running and maintenance problem to be a shortest path problem?
costs) at the end of year i and trading it in at the end of year j E* b. Formulate and solve a spreadsheet model for this
(where year 0 is now). problem.

Case 6-1
Aiding Allies
Commander Votachev steps into the cold October night His two years of work training revolutionaries east of the Ural
and deeply inhales the smoke from his cigarette, savoring Mountains has proven successful; his troops now occupy
its warmth. He surveys the destruction surrounding him— seven strategically important cities in the Russian Federa-
shattered windows, burning buildings, torn roads—and smiles. tion: Kazan, Perm, Yekaterinburg, Ufa, Samara, Saratov, and
 Case 6-1 Aiding Allies 225

Orenburg. His siege is not yet over, however. He looks to the launch a counter attack against Votachev to recapture the cities
west. Given the political and economic confusion in the Rus- he currently occupies. (The map is shown at the end of the case.)
sian Federation at this time, he knows that his troops will be The president also explains that all Starlifters and transports
able to conquer Saint Petersburg and Moscow shortly. Com- leave Boston or Jacksonville. All transports that have traveled
mander Votachev will then be able to rule with the wisdom across the Atlantic must dock at one of the NATO ports to
and control exhibited by his communist predecessors Lenin unload. Palletized load system trucks brought over in the trans-
and Stalin. ports will then carry all troops and materials unloaded from the
Across the Pacific Ocean, a meeting of the top security and ships at the NATO ports to the three strategic Russian cities not
foreign policy advisors of the United States is in progress yet seized by Votachev. All Starlifters that have traveled across
at the White House. The president has recently been briefed the Atlantic must land at one of the NATO airfields for refuel-
about the communist revolution masterminded by Commander ing. The planes will then carry all troops and cargo from the
Votachev and is determining a plan of action. The president NATO airfields to the three Russian cities.
reflects upon a similar October long ago in 1917, and he fears
the possibility of a new age of radical Communist rule accom- a. Draw a network showing the different routes troops and
panied by chaos, bloodshed, escalating tensions, and possibly supplies may take to reach the Russian Federation from the
nuclear war. He therefore decides that the United States needs United States.
to respond and to respond quickly. Moscow has requested assis- b. Moscow and Washington do not know when Commander
tance from the United States military, and the president plans to Votachev will launch his next attack. Leaders from the two
send troops and supplies immediately. countries therefore have agreed that troops should reach each
The president turns to General Lankletter and asks him of the three strategic Russian cities as quickly as possible.
to describe the preparations being taken in the United States The president has determined that the situation is so dire
to send the necessary troops and supplies to the Russian that cost is no object—as many Starlifters, transports, and
Federation. trucks as are necessary will be used to transfer troops and
General Lankletter informs the president that along with cargo from the United States to Saint Petersburg, Moscow,
troops, weapons, ammunition, fuel, and supplies, aircraft, and Rostov. Therefore, no limitations exist on the number of
ships, and vehicles are being assembled at two port cities with troops and amount of cargo that can be transferred between
airfields: Boston and Jacksonville. The aircraft and ships will any cities.
transfer all troops and cargo across the Atlantic Ocean to the The president has been given the information in the next
Eurasian continent. The general hands the president a list of the table about the length of the available routes between cities.
types of aircraft, ships, and vehicles being assembled along with Given the distance and the speed of the transportation
a description of each type. The list is shown next. used between each pair of cities, how can the president most

Transportation Type Name Capacity Speed

Aircraft C-141 Starlifter 150 tons 400 miles per hour
Ship Transport 240 tons 35 miles per hour
Vehicle Palletized Load 16,000 kilograms 60 miles per hour
System Truck

All aircraft, ships, and vehicles are able to carry both troops quickly move troops from the United States to each of the
and cargo. Once an aircraft or ship arrives in Europe, it stays three strategic Russian cities? Highlight the path(s) on the
there to support the armed forces. network. How long will it take troops and supplies to reach
The president then turns to Tabitha Neal, who has been nego- Saint Petersburg? Moscow? Rostov?
tiating with the NATO countries for the last several hours to use c. The president encounters only one problem with his first
their ports and airfields as stops to refuel and resupply before plan: He has to sell the military deployment to Congress.
heading to the Russian Federation. She informs the president Under the War Powers Act, the president is required to con-
that the following ports and airfields in the NATO countries will sult with Congress before introducing troops into hostilities
be made available to the U.S. military. or situations where hostilities will occur. If Congress does
Ports Airfields not give authorization to the president for such use of troops,
the president must withdraw troops after 60 days. Congress
Napoli London
also has the power to decrease the 60-day time period by
Hamburg Berlin
Rotterdam Istanbul passing a concurrent resolution.
The president knows that Congress will not authorize sig-
The president stands and walks to the map of the world pro- nificant spending for another country’s war, especially when
jected on a large screen in the middle of the room. He maps voters have paid so much attention to decreasing the national
the progress of troops and cargo from the United States to three debt. He therefore decides that he needs to find a way to get
strategic cities in the Russian Federation that have not yet been the needed troops and supplies to Saint Petersburg, Moscow,
seized by Commander Votachev. The three cities are Saint and Rostov at the minimum cost.
Petersburg, Moscow, and Rostov. He explains that the troops Each Russian city has contacted Washington to commu-
and cargo will be used both to defend the Russian cities and to nicate the number of troops and supplies the city needs at
226 Chapter Six Network Optimization Problems

From To (Kilometers) From To Cost

Boston Berlin 7,250 km Boston Berlin $50,000 per Starlifter
Boston Hamburg 8,250 Boston Hamburg $30,000 per transport
Boston Istanbul 8,300 Boston Istanbul $55,000 per Starlifter
Boston London 6,200 Boston London $45,000 per Starlifter
Boston Rotterdam 6,900 Boston Rotterdam $30,000 per transport
Boston Napoli 7,950 Boston Napoli $32,000 per transport
Jacksonville Berlin 9,200 Jacksonville Berlin $57,000 per Starlifter
Jacksonville Hamburg 9,800 Jacksonville Hamburg $48,000 per transport
Jacksonville Istanbul 10,100 Jacksonville Istanbul $61,000 per Starlifter
Jacksonville London 7,900 Jacksonville London $49,000 per Starlifter
Jacksonville Rotterdam 8,900 Jacksonville Rotterdam $44,000 per transport
Jacksonville Napoli 9,400 Jacksonville Napoli $56,000 per transport
Berlin Saint Petersburg 1,280 Berlin Saint Petersburg $24,000 per Starlifter
Hamburg Saint Petersburg 1,880 Hamburg Saint Petersburg $3,000 per truck
Istanbul Saint Petersburg 2,040 Istanbul Saint Petersburg $28,000 per Starlifter
London Saint Petersburg 1,980 London Saint Petersburg $22,000 per Starlifter
Rotterdam Saint Petersburg 2,200 Rotterdam Saint Petersburg $3,000 per truck
Napoli Saint Petersburg 2,970 Napoli Saint Petersburg $5,000 per truck
Berlin Moscow 1,600 Berlin Moscow $22,000 per Starlifter
Hamburg Moscow 2,120 Hamburg Moscow $4,000 per truck
Istanbul Moscow 1,700 Istanbul Moscow $25,000 per Starlifter
London Moscow 2,300 London Moscow $19,000 per Starlifter
Rotterdam Moscow 2,450 Rotterdam Moscow $5,000 per truck
Napoli Moscow 2,890 Napoli Moscow $5,000 per truck
Berlin Rostov 1,730 Berlin Rostov $23,000 per Starlifter
Hamburg Rostov 2,470 Hamburg Rostov $7,000 per truck
Istanbul Rostov 990 Istanbul Rostov $2,000 per Starlifter
London Rostov 2,860 London Rostov $4,000 per Starlifter
Rotterdam Rostov 2,760 Rotterdam Rostov $8,000 per truck
Napoli Rostov 2,800 Napoli Rostov $9,000 per truck

a minimum for reinforcement. After analyzing the requests, used between the United States and the Russian Federation
General Lankletter has converted the requests from numbers on the network.
of troops, gallons of gasoline, and so on, to tons of cargo for d. Once the president releases the number of planes, ships, and
easier planning. The requirements are listed below. trucks that will travel between the United States and the Russian
Federation, Tabitha Neal contacts each of the American cities
City Requirements and NATO countries to indicate the number of planes to expect
Saint Petersburg 320,000 tons at the airfields, the number of ships to expect at the docks,
Moscow 440,000 tons and the number of trucks to expect traveling across the roads.
Rostov 240,000 tons Unfortunately, Tabitha learns that several additional restrictions
exist that cannot be immediately eliminated. Because of air-
Both in Boston and Jacksonville, there are 500,000 tons field congestion and unalterable flight schedules, only a limited
of the necessary cargo available. When the United States number of planes may be sent between any two cities. These
decides to send a plane, ship, or truck between two cities, plane limitations are given below.
several costs occur: fuel costs, labor costs, maintenance
costs, and appropriate port or airfield taxes and tariffs. These
costs are listed next. Maximum Number of
The president faces a number of restrictions when trying From To Airplanes
to satisfy the requirements. Early winter weather in northern Boston Berlin 300
Russia has brought a deep freeze with much snow. Therefore, Boston Istanbul 500
General Lankletter is opposed to sending truck convoys in the Boston London 500
Jacksonville Berlin 500
area. He convinces the president to supply Saint Petersburg
Jacksonville Istanbul 700
only through the air. Moreover, the truck routes into Rostov
Jacksonville London 600
are quite limited, so that from each port, at most 2,500 trucks Berlin Saint Petersburg 500
can be sent to Rostov. The Ukrainian government is very sen- Istanbul Saint Petersburg 0
sitive about American airplanes flying through its air space. London Saint Petersburg 1,000
It restricts the U.S. military to at most 200 flights from Berlin Berlin Moscow 300
to Rostov and to at most 200 flights from London to Rostov. Istanbul Moscow 100
(The U.S. military does not want to fly around the Ukraine London Moscow 200
and is thus restricted by the Ukrainian limitations.) Berlin Rostov 0
How does the president satisfy each Russian city’s mili- Istanbul Rostov 900
London Rostov 100
tary requirements at minimum cost? Highlight the path to be
 Case 6-2 Money in Motion 227

In addition, because some countries fear that citizens will Tabitha learns that all shipping lanes have no capacity limits
become alarmed if too many military trucks travel the pub- due to the American control of the Atlantic Ocean.
lic highways, they object to a large number of trucks traveling The president realizes that due to all the restrictions, he
through their countries. These objections mean that a limited will not be able to satisfy all the reinforcement requirements
number of trucks are able to travel between certain ports and of the three Russian cities. He decides to disregard the cost
Russian cities. These limitations are listed below. issue and instead to maximize the total amount of cargo he
can get to the Russian cities. How does the president maxi-
From To Maximum Number of Trucks
mize the total amount of cargo that reaches the Russian Fed-
Rotterdam Moscow 600 eration? Highlight the path(s) used between the United States
Rotterdam Rostov 750 and the Russian Federation on the network.
Hamburg Moscow 700
Hamburg Rostov 500
Napoli Moscow 1,500
Napoli Rostov 1,400

St.
Boston Perm
Petersburg
Kazan Yekaterinburg
Moscow
Samara Ufa
London Hamburg Berlin
Orenburg
Jacksonville Saratov
Rotterdam
Rostov

Napoli Istanbul

Case 6-2
Money in Motion
Jake Nguyen runs a nervous hand through his once finely Associates held in the Japanese market. Because the Japanese
combed hair. He loosens his once perfectly knotted silk tie. And market had performed better than expected over the past year,
he rubs his sweaty hands across his once immaculately pressed Jake had increased investments in Japan from $2.5 million to
trousers. Today has certainly not been a good day. $15 million only one month ago. At that time, one dollar was
Over the past few months, Jake had heard whispers circu- worth 80 yen.
lating from Wall Street—whispers from the lips of investment No longer. Jake realizes that today’s devaluation of the yen
bankers and stockbrokers famous for their outspokenness. They means that one dollar is worth 125 yen. He will be able to liqui-
had whispered about a coming Japanese economic collapse— date these investments without any loss in yen, but now the dol-
whispered because they had believed that publicly vocalizing lar loss when converting back into U.S. currency would be huge.
their fears would hasten the collapse. He takes a deep breath, closes his eyes, and mentally prepares
And, today, their very fears have come true. Jake and his himself for serious damage control.
colleagues gather around a small television dedicated exclu- Jake’s meditation is interrupted by a booming voice calling
sively to the Bloomberg channel. Jake stares in disbelief as he for him from a large, corner office. Grant Hill, the president of
listens to the horrors taking place in the Japanese market. And Grant Hill Associates, yells, “Nguyen, get the hell in here!”
the Japanese market is taking the financial markets in all other Jake jumps and looks reluctantly toward the corner office
East Asian countries with it on its tailspin. He goes numb. As hiding the furious Grant Hill. He smooths his hair, tightens his
manager of Asian foreign investment for Grant Hill Associates, tie, and walks briskly into the office.
a small West Coast investment boutique specializing in currency Grant Hill meets Jake’s eyes upon his entrance and continues
trading, Jake bears personal responsibility for any negative yelling, “I don’t want one word out of you, Nguyen! No excuses;
impacts of the collapse. And Grant Hill Associates will experi- just fix this debacle! Get all of our money out of Japan! My gut
ence negative impacts. tells me this is only the beginning! Get the money into safe U.S.
Jake had not heeded the whispered warnings of a Japanese bonds! NOW! And don’t forget to get our cash positions out of
collapse. Instead, he had greatly increased the stake Grant Hill Indonesia and Malaysia ASAP with it!”
228 Chapter Six Network Optimization Problems

Jake has enough common sense to say nothing. He nods his always can find on-the-minute exchange rates for most curren-
head, turns on his heels, and practically runs out of the office. cies in the world (see Table 1).
Safely back at his desk, Jake begins formulating a plan to The table states that, for example, 1 Japanese yen equals
move the investments out of Japan, Indonesia, and Malaysia. His 0.008 U.S. dollars. By making a few phone calls, he discovers
experiences investing in foreign markets have taught him that the transaction costs his company must pay for large currency
when playing with millions of dollars, how he gets money out of transactions during these critical times (see Table 2).
a foreign market is almost as important as when he gets money Jake notes that exchanging one currency for another one
out of the market. The banking partners of Grant Hill Associates results in the same transaction cost as a reverse conversion.
charge different transaction fees for converting one currency into Finally, Jake finds out the maximum amounts of domestic cur-
another one and wiring large sums of money around the globe. rencies his company is allowed to convert into other currencies
And now, to make matters worse, the governments in East in Japan, Indonesia, and Malaysia (see Table 3).
Asia have imposed very tight limits on the amount of money an
individual or a company can exchange from the domestic cur- a. Formulate Jake’s problem as a minimum-cost flow problem,
rency into a particular foreign currency and withdraw it from and draw the network for his problem. Identify the supply
the country. The goal of this dramatic measure is to reduce the and demand nodes for the network.
outflow of foreign investments out of those countries to prevent b. Which currency transactions must Jake perform to con-
a complete collapse of the economies in the region. Because of vert the investments from yens, rupiahs, and ringgits
Grant Hill Associates’ cash holdings of 10.5 billion Indonesian into U.S. dollars to ensure that Grant Hill Associates has
rupiahs and 28 million Malaysian ringgits, along with the hold- the maximum dollar amount after all transactions have
ings in yen, it is not clear how these holdings should be con- occurred? How much money does Jake have to invest in
verted back into dollars. U.S. bonds?
Jake wants to find the most cost-effective method to con- c. The World Trade Organization forbids transaction limits
vert these holdings into dollars. On his company’s website, he because they promote protectionism. If no transaction limits

TABLE 1
Currency Exchange Rates

To
From Yen Rupiah Ringgit U.S. Dollar Canadian Dollar Euro Pound Peso
Japanese yen 1 50 0.04 0.008 0.01 0.0064 0.0048 0.0768
Indonesian rupiah 1 0.0008 0.00016 0.0002 0.000128 0.000096 0.001536
Malaysian ringgit 1 0.2 0.25 0.16 0.12 1.92
U.S. dollar 1 1.25 0.8 0.6 9.6
Canadian dollar 1 0.64 0.48 7.68
European euro 1 0.75 12
English pound 1 16
Mexican peso 1

TABLE 2
Transaction Cost (Percent)

To
From Yen Rupiah Ringgit U.S. Dollar Canadian Dollar Euro Pound Peso
Yen — 0.5 0.5 0.4 0.4 0.4 0.25 0.5
Rupiah — 0.7 0.5 0.3 0.3 0.75 0.75
Ringgit — 0.7 0.7 0.4 0.45 0.5
U.S. dollar — 0.05 0.1 0.1 0.1
Canadian dollar — 0.2 0.1 0.1
Euro — 0.05 0.5
Pound — 0.5
Peso —

TABLE 3
Transaction Limits in Equivalent of 1,000 Dollars

To
From Yen Rupiah Ringgit U.S. Dollar Canadian Dollar Euro Pound Peso
Yen — 5,000 5,000 2,000 2,000 2,000 2,000 4,000
Rupiah 5,000 — 2,000 200 200 1,000 500 200
Ringgit 3,000 4,500 — 1,500 1,500 2,500 1,000 1,000
 Case 6-3 Airline Scheduling 229

exist, what method should Jake use to convert the Asian limits, what currency transactions should Jake perform to
holdings from the respective currencies into dollars? convert the Asian holdings from the respective currencies
d. In response to the World Trade Organization’s mandate into dollars?
forbidding transaction limits, the Indonesian government e. Jake realizes that his analysis is incomplete because he has
introduces a new tax to protect its currency that leads to a not included all aspects that might influence his planned
500 percent increase in transaction costs for transactions of currency exchanges. Describe other factors that Jake should
rupiahs. Given these new transaction costs but no transaction examine before he makes his final decision.

Case 6-3
Airline Scheduling
Richard Cook is very concerned. Until recently, he has always (including some new ones) for the coming year that could feasi-
had the golden touch, having successfully launched two start- bly be flown by the four airplanes.
up companies that made him a very wealthy man. However, A little over a decade ago, Richard had been an honor gradu-
the timing could not have been worse for his latest start-up— ate of a leading MBA program. He had enjoyed the management
a regional airline called Northwest Commuter that operates on science course he took then and he has decided to apply spread-
the west coast of the United States. All had been well at the sheet modeling to analyze his problem.
beginning. Four airplanes had been leased and the company The leasing cost for each airplane is $30,000 per day. At the
had become fairly well established as a no-frills airline provid- end of the day, an airplane might remain in the city where it
ing low-cost commuter flights between the west coast cities of landed on its last flight. Another option is to fly empty overnight

Flight Expected
Number From To Depart Arrive Revenue ($000)
1257 Seattle San Francisco 8:00 AM 10:00 AM 37
2576 Seattle Portland 9:30 AM 10:30 AM 20
8312 Seattle San Francisco 9:30 AM 11:30 AM 25
1109 Seattle San Francisco 12:00 PM 2:00 PM 27
3752 Seattle San Francisco 2:30 PM 4:30 PM 23
2498 Seattle Portland 3:00 PM 4:00 PM 18
8787 Seattle San Francisco 5:00 PM 7:00 PM 29
8423 Seattle Portland 6:30 PM 7:30 PM 27
7922 Portland Seattle 9:00 AM 10:00 AM 20
5623 Portland San Francisco 9:30 AM 11:00 AM 23
2448 Portland San Francisco 11:00 AM 12:30 PM 19
1842 Portland Seattle 12:00 PM 1:00 PM 21
3487 Portland Seattle 2:00 PM 3:00 PM 22
4361 Portland San Francisco 4:00 PM 5:30 PM 29
4299 Portland Seattle 6:00 PM 7:00 PM 27
1288 San Francisco Seattle 8:00 AM 10:00 AM 32
3335 San Francisco Portland 8:30 AM 10:00 AM 26
9348 San Francisco Seattle 10:30 AM 12:30 PM 24
7400 San Francisco Seattle 12:00 PM 2:00 PM 27
7328 San Francisco Portland 12:00 PM 1:30 PM 24
6386 San Francisco Portland 4:00 PM 5:30 PM 28
6923 San Francisco Seattle 5:00 PM 7:00 PM 32

Seattle, Portland, and San Francisco. Achieving fast turnaround to another city to be ready to start a flight from there the next
times between flights had given Northwest Commuter an impor- morning. The cost of this latter option is $5,000.
tant competitive advantage. Then the cost of jet fuel began spi- The table above shows the 22 possible flights that are being
raling upward and the company began going heavily into the red considered for the coming year. The last column gives the esti-
(like so many other airlines at the time). Although some of the mated net revenue (in thousands of dollars) for each flight, given
flights were still profitable, others were losing a lot of money. the average number of passengers anticipated for that flight.
Fortunately, jet fuel costs now are starting to come down, but
it has become clear to Richard that he needs to find new ways a. To simplify the analysis, assume for now that there is vir-
for Northwest Commuter to become a more efficient airline. tually no turnaround time between flights so the next flight
In particular, he wants to start by dropping unprofitable flights can begin as soon as the current flight ends. (If an immediate
and then identifying the most profitable combination of flights next flight is not available, the airplane would wait until the
230 Chapter Six Network Optimization Problems

next scheduled flight from that city.) Develop a network that ground for unloading and loading passengers between the
displays some of the feasible routings of the flights. (Hint: arrival of a flight and the departure of the next flight by the
Include separate nodes for each half hour between 8:00 am same airplane. (Most airlines use a considerably longer turn-
and 7:30 pm in each city.) Then develop and apply the corre- around time.) Does this change the number of flights that can
sponding spreadsheet model that finds the feasible combina- be flown?
tion of flights that maximizes the total profit. d. Richard now is considering having each of the four airplanes
b. Richard is considering leasing additional airplanes to achieve carry freight instead of flying empty if it flies overnight to
economies of scale. The leasing cost of each one again would another city. Instead of a cost of $5,000, this would result in
be $30,000 per day. Perform what-if analysis to determine net revenue of $5,000. Adapt the spreadsheet model used in
whether it would be worthwhile to have 5, 6, or 7 airplanes part c to find the feasible combination of flights that maxi-
instead of 4. mizes the total profit. Does this change the number of air-
c. Now repeat part a under the more realistic assumption that planes that fly overnight to another city?
there is a minimum turnaround time of 30 minutes on the

Case 6-4
Broadcasting the Olympic Games
The management of the WBC television network has been each link in the network is shown in the diagram below (in
celebrating for days. What a coup! After several unsuccessful GB/s). WBC can divide the transmission and route it through
attempts in recent decades, they finally have hit the big jackpot. multiple paths of the network from A to G, so long as the total
They have won the bidding war to gain the rights to broadcast bandwidth required on each link does not exceed the capacity
the next Summer Olympic Games! of that link.
The price was enormous. However, the advertising income
also will be huge. Even if the network loses some money in the a. By utilizing the entire computer network, what is the maxi-
process, the gain in prestige should make it all worthwhile. After mum bandwidth available (in GB/s) for transmission from
all, the entire world follows these games closely every four years. the general site of the Olympic Games (node A) to the home
Now the entire world receiving the feed of the broadcast from the studios (node G)? Set up and solve a linear programming
WBC network will learn what a preeminent network it is. spreadsheet model.

7 F
B
13 4 9
5
A E
6
9 G
3
6 10
12
D
C 8

However, reality also is setting in for WBC management. b. WBC would like to expand the capacity of the network so it
Telecasting the entire Olympic Games will be an enormously can handle the peak requirement of 35 GB/s from the Olym-
complex task. Many different sporting events will be occurring pics site (A) to the home studios (G). WBC can increase the
simultaneously in far-flung venues. An unprecedented amount capacity of each link of the computer network by install-
of live television and live-on-the-Internet coverage of the vari- ing additional fiber optic cables. The table on the next page
ous sporting events needs to be planned. shows the existing capacity of each network segment (in
Due to the high amount of bandwidth that will be required GB/s), the maximum additional capacity that can be added
to transmit the coverage of the games back to its home studios, (in GB/s), and the cost to increase the capacity (in millions of
WBC needs to upgrade its computer network. It operates a pri- dollars per unit GB/s added). Make a copy of the spreadsheet
vate computer network as shown in the network diagram in the model used to solve part a and make any revisions necessary
right-hand column. The games will be held near node A. WBC’s to solve this new problem.
home studios are located at node G. At peak times, coverage
of the games will require 35 GB/s (GB per second) to be sent Note: This case will be continued in the next chapter (Case 7-4),
through the network from node A to node G. The capacity of so we suggest that you save your spreadsheet model from part b.
 Additional Cases 231

Network Segment Cost per GB/s

Existing Maximum Additional of Additional Capacity
From To Capacity (GB/s) Capacity (GB/s) ($million)
A B 13 6 2.8
A C 6 4 2.5
A D 10 3 2.8
B D 9 4 2.5
B E 5 5 3.1
B F 7 3 1.6
C D 8 5 3.9
D E 3 2 2.8
D G 12 5 1.6
E F 4 2 4.6
E G 6 4 2.9
F G 9 5 1.8

Additional Cases
Additional cases for this chapter also are available at the
University of Western Ontario Ivey School of Business website,
cases.ivey.uwo.ca/cases, in the segment of the CaseMate area
designated for this book.