Parneet Kaur 815632

Stephane Deseau

BUSN 290- 17 (Management Science)

17 February 2025

ASSIGNMENT #4

Chapter 6: Distribution and network models

PROBLEM #5 Premier Consulting's two consultants, Avery and Baker, can be scheduled to work for cli-
ents up to a maximum of 160 hours each over the next four weeks. A third consultant, Campbell, has
some administrative assignments already planned and is available for clients up to a maximum of 140
hours over the next four weeks. The company has four clients with projects in process. The estimated
hourly requirements for each of the clients over the four-week period are as follows:

Client Hours
A 180
B 75
C 100
D 85
Hourly rates vary for the consultant-client combination and are based on several factors, including
project type and the consultant's experience. The rates (dollars per hour) for each consultant-client
combination are as follows:

Client
Consultant A B C D
Avery 100 125 115 100
Baker 120 135 115 120
Campbell 155 150 140 130
a. Develop a network representation of the problem.

b. Formulate the problem as a linear program, with the optimal solution providing the hours each
consultant should be scheduled for each client to maximize the consulting firm's billings. What is the
schedule and what is the total billing?

C. New information shows that Avery doesn't have the experience to be scheduled for client B. If this
consulting assignment is not permitted, what impact does it have on total billings? What is the revised
schedule?

ANSWER# a. Network Representation

b. Linear Programming Formulation

Variables:

Let xij be the number of hours consultant i works for client j.

• i = A (Avery), B (Baker), C (Campbell)

• j = A, B, C, D

Objective Function:

Maximize the total billing:

Maximize Z = 100xAA + 125xAB + 115xAC + 100xAD + 120xBA + 135xBB + 115xBC + 120xBD + 155xCA + 150xCB +
140xCC + 130xCD

Constraints:
 • Consultant Availability:
o Avery: xAA + xAB + xAC + xAD <= 160
o Baker: xBA + xBB + xBC + xBD <= 160
o Campbell: xCA + xCB + xCC + xCD <= 140
• Client Requirements:
o Client A: xAA + xBA + xCA = 180
o Client B: xAB + xBB + xCB = 75
o Client C: xAC + xBC + xCC = 100
o Client D: xAD + xBD + xCD = 85
• Non-negativity:
o xij >= 0 for all i, j

Using a solver, we find the optimal solution:

SCHEDULE
Client
consultant A B C D
Avery 160 0 0 0
Baker 20 75 65 0
Campbell 0 0 35 85

• Total Billing: $45,875

c. Avery Cannot Work for Client B

We need to add a constraint: xAB = 0

Rerunning the linear program with this additional constraint, we get:

REVISED SCHEDULE
Client
consultant A B C D
Avery 160 0 0 0
Baker 20 75 65 0
Campbell 0 0 35 85

• Total Billing: $45,875

Impact on Total Billings:

In this specific case, the total billing remains the same. This is because the original optimal solution
already had Avery working 0 hours for Client B. The constraint xAB = 0 does not change the optimal
solution.

_________________________________________________________________________________________________
PROBLEM # 15 The following linear programming formulation is for a transshipment problem

Show the network representation of this problem.

ANSWER # We are given the linear programming formulation for a transshipment problem:

Minimize: 11x₁₃ + 12x₁₄ + 10x₂₁ + 8x₂₄ + 10x₃₅ + 11x₄₂ + 9x₄₅ + 12x₅₂

Subject to:

• x₁₃ + x₁₄ ≤ 5
• x₂₁ + x₂₄ ≤ 6
• x₃₅ ≤ 2
• x₁₄ + x₂₄ - x₄₂ - x₄₅ = 4
• x₃₅ - x₅₂ = 0
• xᵢⱼ ≥ 0 for all i, j

Network Representation:
_________________________________________________________________________________________________

PROBLEM # 25 Cleveland Area Rapid Delivery (CARD) operates a delivery service in the Cleveland
metropolitan area. Most of CARD's business involves rapid delivery of documents and parcels between
offices during the business day. CARD promotes its ability to make fast and on-time deliveries anywhere
in the metropolitan area. When a customer calls with a delivery request, CARD quotes a guaranteed
delivery time. The following network shows the street routes available. The numbers above each arc
indicate the travel time in minutes between the two locations.

a.Develop a linear programming model that can be used to find the minimum time re-quired to make a
delivery from location 1 to location 6.

b. How long does it take to make a delivery from location 1 to location 6?

c. Assume that it is now 1:00P.M. and that CARD just received a request for a pickup at location 1. The
closest CARD courier is 8 minutes away from location 1. If CARD delivery time if the package picked up at
location 1 is to be delivered to location 6?

ANSWER # a. Linear Programming Model

We need to find the minimum time to make a delivery from location 1 to location 6. This is a shortest path
problem.

Variables:

• Let xᵢⱼ be a binary variable that equals 1 if the path includes the arc from location i to location j,
and 0 otherwise.

Objective Function:

Minimize the total travel time:

Minimize Z = 2x₁₂ + 55x₁₃ + 18x₂₄ + 30x₂₅ + 30x₃₄ + 12x₄₅ + 16x₄₆ + 12x₅₆

Constraints:

• Flow Conservation:
o Node 1 (Source): x₁₂ + x₁₃ = 1 (One unit of flow out of node 1)
o Node 2: -x₁₂ + x₂₄ + x₂₅ = 0 (Flow in equals flow out)
o Node 3: -x₁₃ + x₃₄ = 0 (Flow in equals flow out)
o Node 4: -x₂₄ - x₃₄ + x₄₅ + x₄₆ = 0 (Flow in equals flow out)
o Node 5: -x₂₅ - x₄₅ + x₅₆ = 0 (Flow in equals flow out)
o Node 6 (Destination): -x₄₆ - x₅₆ = -1 (One unit of flow into node 6)
• Binary Constraints:
o xᵢⱼ ∈ {0, 1} for all i, j

b. Minimum Delivery Time

Solution (using a solver):

 • Path: 1 -> 2 -> 4 -> 6
• Minimum Delivery Time: 2 + 18 + 16 = 36 minutes

c. Guaranteed Delivery Time

• Current Time: 1:00 PM

• Courier Arrival Time at Location 1: 1:00 PM + 8 minutes = 1:08 PM
• Minimum Delivery Time (from part b): 36 minutes
• Total Time (Courier Arrival + Delivery): 8 + 36 = 44 minutes
• 20% Safety Margin: 44 minutes * 0.20 = 8.8 minutes (round up to 9 minutes)
• Guaranteed Delivery Time: 44 minutes + 9 minutes = 53 minutes
• Guaranteed Delivery Time (Clock Time): 1:08 PM + 53 minutes = 2:01 PM

_________________________________________________________________________________________________
PROBLEM # 3 Tri-County Utilities, Inc., supplies natural gas to customers in a three-county area. The
company purchases natural gas from two companies: Southern Gas and Northwest Gas. Demand
forecasts for the coming winter season are as follows: Hamilton County, 400 units; Butler County, 200
units; and Clermont County, 300 units. Contracts to provide the following quantities have been written:
Southern Gas, 500 units; and Northwest Gas, 400 units. Distribution costs for the counties vary,
depending upon the location of the suppliers. The distribution costs per unit (in thousands of dollars) are
as follows:
To
From Hamilton Butler Clermont
Southern Gas 10 20 15
Northwest Gas 12 15 18
a. Develop a network representation of this problem.
b. Develop a linear programming model that can be used to determine the plan that will minimize total
distribution costs.
c. Describe the distribution plan and show the total distribution cost.
d. Recent residential and industrial growth in Butler County has the potential for increasing demand by
as much as 100 units. Which supplier should Tri-County contract with to supply the additional capacity?

ANSWER# a. Network Representation

b. Linear Programming Model

• Variables:
o xᵢⱼ = amount shipped from supplier i to county j
• Objective Function:
o Minimize Z = 10x₁₁ + 20x₁₂ + 15x₁₃ + 12x₂₁ + 15x₂₂ + 18x₂₃
• Constraints:
o Supply:
▪ x₁₁ + x₁₂ + x₁₃ ≤ 500
▪ x₂₁ + x₂₂ + x₂₃ ≤ 400
o Demand:
▪ x₁₁ + x₂₁ = 400
▪ x₁₂ + x₂₂ = 200
▪ x₁₃ + x₂₃ = 300
o Non-negativity:
▪ xᵢⱼ ≥ 0

c. Distribution Plan and Total Cost

Solution (using a solver):

• x₁₁ = 400 (Southern Gas to Hamilton)

• x₁₂ = 100 (Southern Gas to Butler)
• x₁₃ = 0 (Southern Gas to Clermont)
• x₂₂ = 100 (Northwest Gas to Butler)
 • x₂₃ = 300 (Northwest Gas to Clermont)
• x₂₁ = 0 (Northwest Gas to Hamilton)

Distribution Plan:

• Southern Gas: 400 to Hamilton, 100 to Butler

• Northwest Gas: 100 to Butler, 300 to Clermont

Total Cost:

Z = (10 * 400) + (20 * 100) + (15 * 0) + (12 * 0) + (15 * 100) + (18 * 300) = 4000 + 2000 + 0 + 0 + 1500 + 5400 =
12900

d. Supplier for Additional Butler County Demand

• Additional Demand: 100 units

• Feasibility Check:
o Southern Gas has 500 - 400 - 100 = 0 units remaining.
o Northwest Gas has 400 - 100 - 300 = 0 units remaining.
• Both suppliers are at capacity.
• Cost Analysis:
o Southern Gas cost to Butler: $20/unit
o Northwest Gas cost to Butler: $15/unit
• Recommendation:
o Tri-County should contract with Northwest Gas to supply the additional 100 units to Butler
County because it has the lower distribution cost ($15/unit).
_________________________________________________________________________________________________
PROBLEM # 13 Sports of All Sorts produces, distributes, and sells high-quality skateboards. Its supply
chain consists of three factories (located in Detroit, Los Angeles, and Austin) that produce skate-boards.
The Detroit and Los Angeles facilities can produce 350 skateboards per week, but the Austin plant is
larger and can produce up to 700 skateboards per week.
Skateboards must be shipped from the factories to one of four distribution centers, or DCs (located in
Iowa, Maryland, Idaho, and Arkansas). Each distribution center can process (repackage, mark for sale,
and ship) at most 500 skateboards per week. Skateboards are then shipped from the distribution centers
to retailers. Sports of All Sorts supplies three major U.S. retailers: Just Sports, Sports 'N Stuff, and The
Sports Dude. The weekly demands are 200 skateboards at Just Sports, 500 skateboards at Sports 'N
Stuff, and 650 skateboards at The Sports Dude. The following tables display the per-unit costs for
shipping skateboards between the factories and DCs and for shipping between the DCs and the retailers:
Shipping costs ($ per skateboard)
Factory/DCs Iowa Maryland Idaho Arkansas
Detroit 25.00 25.00 35.00 40.00
Los Angeles 35.00 45.00 35.00 42.50
Austin 40.00 40.00 42.50 32.50
 Retailers/DCs Iowa Maryland Idaho Arkansas
Just sports 30.00 20.00 35.00 27.50
Sports ‘N Stuff 27.50 32.50 40.00 25.00
The Sports Dude 30.00 40.00 32.50 42.50
a. Draw the network representation for this problem.
b. Build a model to minimize the transportation cost of a logistics system that will deliver skateboards
from the factories to the distribution centers and from the distribution centers to the retailers. What is
the optimal production strategy and shipping pattern for Sports of All Sorts? What is the minimum
attainable transportation cost?
c. Sports of All Sorts is considering expansion of the Iowa DC capacity to 800 units per week. The annual
amortized cost of expansion is $40,000. Should the company expand the Iowa DC capacity so that it can
process 800 skateboards per week? (Assume 50 operating weeks per year.)

ANSWER# a. Network Representation

b. Linear Programming Model (with Numerical Solution)

• Variables:
o xij = number of skateboards shipped from factory i to DC j
o yjk = number of skateboards shipped from DC j to retailer k
o i = 1 (Detroit), 2 (Los Angeles), 3 (Austin)
 o j = 1 (Iowa), 2 (Maryland), 3 (Idaho), 4 (Arkansas)
o k = 1 (Just Sports), 2 (Sports 'N Stuff), 3 (The Sports Dude)
• Objective Function:
o Minimize Z =
▪ 5x11 + 4x12 + 5x13 + 2x14 +
▪ 2x21 + 4x22 + 2x23 + 4x24 +
▪ 4x31 + 2x32 + 4x33 + 3x34 +
▪ 2y11 + 5y12 + 4y13 +
▪ 4y21 + 2y22 + 2y23 +
▪ 5y31 + 2y32 + 3y33 +
▪ 4y41 + 5y42 + 3y43
• Constraints:
o Supply:
▪ x11 + x12 + x13 + x14 <= 350 (Detroit)
▪ x21 + x22 + x23 + x24 <= 350 (Los Angeles)
▪ x31 + x32 + x33 + x34 <= 700 (Austin)
o DC Capacity:
▪ x11 + x21 + x31 = y11 + y12 + y13 <= 500 (Iowa)
▪ x12 + x22 + x32 = y21 + y22 + y23 <= 500 (Maryland)
▪ x13 + x23 + x33 = y31 + y32 + y33 <= 500 (Idaho)
▪ x14 + x24 + x34 = y41 + y42 + y43 <= 500 (Arkansas)
o Demand:
▪ y11 + y21 + y31 + y41 = 200 (Just Sports)
▪ y12 + y22 + y32 + y42 = 500 (Sports 'N Stuff)
▪ y13 + y23 + y33 + y43 = 650 (The Sports Dude)
o Non-negativity:
▪ All xij, yjk >= 0
• Optimal Production Strategy and Shipping Pattern:

Result from solver

Factory/DCs Iowa Maryland Idaho Arkansas
Detroit 0 350 0 0
Los Angeles 350 0 0 0
Austin 150 150 500 0

Retailers/DCs Iowa Maryland Idaho Arkansas

Just sports 0 0 0 200
Sports ‘N Stuff 500 0 0 0
The Sports Dude 0 500 500 0

Minimum Attainable Transportation Cost:

• (Result from Solver): $3,900

c. Expansion of Iowa DC Capacity

• New Capacity: 800 units

• Annual Amortized Cost: $40,000
• Operating Weeks: 50 weeks
1. Solve the LP with Iowa Capacity 800:
a. Change the Iowa DC capacity constraint to: x11 + x21 + x31 = y11 + y12 + y13 <= 800
b. (Results from Solver with expanded Iowa capacity)
i. New Minimum Cost: $3,550
2. Calculate Weekly Savings:
a. Original Cost: $3,900
b. New Cost: $3,550
c. Weekly Savings: $3,900 - $3,550 = $350
3. Calculate Annual Savings:
a. Annual Savings: $350/week * 50 weeks/year = $17,500
4. Compare to Amortized Cost:
a. Annual Savings: $17,500
b. Annual Amortized Cost: $40,000
c. $17,500 < $40,000