Table of Contents Chapter 6 (Transportation and Assignment Problems)

The P&T Company Distribution Problem (Section 6.1) Characteristics of Transportation Problems (Section 6.2) Variants of Transportation Problems: Better Products (Section 6.3) Variants of Transportation Problems: Nifty (Section 6.3) Applications of Transportation Problems: Metro Water (Section 6.4) Applications of Transportation Problems: Northern Airplane (Section 6.4) Applications of Transportation Problems: Middletown (Section 6.4) Applications of Transportation Problems: Energetic (Section 6.4) A Case Study: Texago Corp. Site Selection Problem (Section 6.5) Characteristics of Assignment Problems: Sellmore (Section 6.6) Variants of Assignment Problems: Job Shop (Section 6.7) Variants of Assignment Problems: Better Products (Section 6.7) Variants of Assignment Problems: Revised Middletown (Section 6.7) Transportation & Assignment Problems (UW Lecture) 6.26.5 6.66.14 6.156.17 6.186.20 6.216.22 6.236.25 6.266.28 6.296.31 6.326.46 6.476.51 6.52-6.54 6.55 6.56 6.576.75

These slides are based upon a lecture to second-year MBA students at the University of Washington that discusses transportation and assignment problems (as taught by one of the authors).

P&T Company Distribution Problem

CANNERY 1 Bellingham WAREHOUSE 3 Rapid City WAREHOUSE 2 Salt Lake City WAREHOUSE 1 Sacramento WAREHOUSE 4 Albuquerque

CANNERY 2 Eugene

CANNERY 3 Albert Lea

Shipping Data

Cannery
Bellingham Eugene Albert Lea

Output
75 truckloads 125 truckloads 100 truckloads

Warehouse
Sacramento Salt Lake City Rapid City

Allocation
80 truckloads 65 truckloads 70 truckloads

Total

300 truckloads

Albuquerque
Total

85 truckloads
300 truckloads

Current Shipping Plan

Warehouse From

\ To

Sacramento

Salt Lake City

Rapid City

Albuquerque

Cannery Bellingham 75 0 0 0

Eugene
Albert Lea

5
0

65
0

55
15

0
85

Shipping Cost per Truckload

Warehouse From

\ To

Sacramento

Salt Lake City

Rapid City

Albuquerque

Cannery Bellingham $464 $513 $654 $867

Eugene
Albert Lea

352
995

416
682

690
388

791
685

Total shipping cost = 75($464) + 5($352) + 65($416) + 55($690) + 15($388) + 85($685) = $165,595

Terminology for a Transportation Problem

P&T Company Problem

General Model

Truckloads of canned peas

Canneries Warehouses

Units of a commodity
Sources Destinations

Output from a cannery

Allocation to a warehouse Shipping cost per truckload from a cannery to a warehouse

Supply from a source

Demand at a destination Cost per unit distributed from a source to a destination

Characteristics of Transportation Problems

The Requirements Assumption
Each source has a fixed supply of units, where this entire supply must be distributed to the destinations. Each destination has a fixed demand for units, where this entire demand must be received from the sources.

The Feasible Solutions Property

A transportation problem will have feasible solutions if and only if the sum of its supplies equals the sum of its demands.

The Cost Assumption

The cost of distributing units from any particular source to any particular destination is directly proportional to the number of units distributed. This cost is just the unit cost of distribution times the number of units distributed.

The Transportation Model

Any problem (whether involving transportation or not) fits the model for a transportation problem if 1. It can be described completely in terms of a table like Table 6.5 that identifies all the sources, destinations, supplies, demands, and unit costs, and 2. satisfies both the requirements assumption and the cost assumption.

The objective is to minimize the total cost of distributing the units.

The P&T Co. Transportation Problem

Unit Cost Destination (Warehouse): Source (Cannery) Bellingham Eugene Albert Lea Demand $464 352 995 80 $513 416 682 65 $654 690 388 70 $867 791 685 85 75 125 100 Sacramento Salt Lake City Rapid City Albuquerque Supply

Spreadsheet Formulation

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

B Unit Cost Source (Cannery)

D Sacramento $464 $352 $995

Bellingham Eugene Albert Lea

E F Destination (Warehouse) Salt Lake City Rapid City $513 $654 $416 $690 $682 $388

G Albuquerque $867 $791 $685

Shipment Quantity (Truckloads) Source Bellingham (Cannery) Eugene Albert Lea Total Received Demand

Sacramento 0 80 0 80 = 80

Destination (Warehouse) Salt Lake City Rapid City 20 0 45 0 0 70 65 70 = = 65 70

Albuquerque 55 0 30 85 = 85

Total Shipped 75 125 100

= = =

Supply 75 125 100 Total Cost $152,535

Network Representation
Supplies De mands Destina tions Sourc es

464
(Bellingham) 75 S1

D1

80 (Sa cr amento)

513 867 654 690 682 685

D3 70 (Rapid City) D2 65 (Salt Lake City)

352
(E ugene) 125 S2

416 791

995
(Alber t Lea) 100 S3

388
D4 85 (Albuquerque)

The Transportation Problem is an LP

Let xij = the number of truckloads to ship from cannery i to warehouse j (i = 1, 2, 3; j = 1, 2, 3, 4) Minimize Cost = $464x11 + $513x12 + $654x13 + $867x14 + $352x21 + $416x22 + $690x23 + $791x24 + $995x31 + $682x32 + $388x33 + $685x34 subject to Cannery 1: x11 + x12 + x13 + x14 = 75 Cannery 2: x21 + x22 + x23 + x24 = 125 Cannery 3: x31 + x32 + x33 + x34 = 100 Warehouse 1: x11 + x21 + x31 = 80 Warehouse 2: x12 + x22 + x32 = 65 Warehouse 3: x13 + x23 + x33 = 70 Warehouse 4: x14 + x24 + x34 = 85 and xij 0 (i = 1, 2, 3; j = 1, 2, 3, 4)

Integer Solutions Property

As long as all its supplies and demands have integer values, any transportation problem with feasible solutions is guaranteed to have an optimal solution with integer values for all its decision variables. Therefore, it is not necessary to add constraints to the model that restrict these variables to only have integer values.

Distribution System at Proctor and Gamble

Proctor and Gamble needed to consolidate and re-design their North American distribution system in the early 1990s.
50 product categories 60 plants 15 distribution centers 1000 customer zones

Solved many transportation problems (one for each product category).

Goal: find best distribution plan, which plants to keep open, etc.
Closed many plants and distribution centers, and optimized their product sourcing and distribution location.

Implemented in 1996. Saved $200 million per year.

For more details, see 1997 Jan-Feb Interfaces article, Blending OR/MS, Judgement, and GIS: Restructuring P&Gs Supply Chain, downloadable at www.mhhe.com/hillier2e/articles

Better Products (Assigning Plants to Products)

The Better Products Company has decided to initiate the product of four new products, using three plants that currently have excess capacity.
Unit Cost Product: Plant 1 2 3 Required production $41 40 37 20 $27 29 30 30 $28 27 30 $24 23 21 40 75 75 45 1 2 3 4 Capacity Available

Question: Which plants should produce which products?

Transportation Problem Formulation

Unit Cost Destination (Product): Source(Plant) 1 2 3 Demand $41 40 37 20 $27 29 30 30 $28 27 30 $24 23 21 40 75 75 45 1 2 3 4 Supply

Spreadsheet Formulation
B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Unit Cost Plant 1 Plant 2 Plant 3 C Product 1 $41 $40 $37 D Product 2 $27 $29 $30 E Product 3 $28 $27 F Product 4 $24 $23 $21 G H I

Daily Production Plant 1 Plant 2 Plant 3 Products Produced Required Production

Product 1 0 0 20 20 = 20

Product 2 30 0 0 30 = 30

Product 3 30 0 0 30 = 30

Product 4 0 15 25 40 = 40

Produced At Plant 60 15 45

<= <= <=

Capacity 75 75 45 Total Cost $3,260

Nifty Co. (Choosing Customers)

The Nifty Company specializes in the production of a single product, which it produces in three plants. Four customers would like to make major purchases. There will be enough to meet their minimum purchase requirements, but not all of their requested purchases. Due largely to variations in shipping cost, the net profit per unit sold varies depending on which plant supplies which customer.

Question: How many units should Nifty sell to each customer and how many units should they ship from each plant to each customer?

Data for the Nifty Company

Unit Cost Capacity Available

Product: Plant 1 2 3 Required production

$41 40 37 20

$27 29 30 30

$28 27 30

$24 23 21 40

75 75 45

Question: How many units should Nifty sell to each customer and how many units should they ship from each plant to each customer?

Spreadsheet Formulation
B Unit Profit Plant 1 Plant 2 Plant 3 C Customer 1 $55 $37 $29 D Customer 2 $42 $18 $59 E Customer 3 $46 $32 $51 F Customer 4 $53 $48 $35 G H I

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Shipment Plant 1 Plant 2 Plant 3 Min Purchase Total Shipped Max Purchase

Customer 1 7,000 0 0 7,000 <= 7,000 <= 7,000

Customer 2 0 0 6,000 3,000 <= 6,000 <= 9,000

Customer 3 1,000 0 1,000 2,000 <= 2,000 <= 6,000

Customer 4 0 5,000 0 0 <= 5,000 <= 8,000

Total Production 8,000 5,000 7,000

= = =

Production Quantity 8,000 5,000 7,000

Total Profit $1,076,000

Metro Water (Distributing Natural Resources)

Metro Water District is an agency that administers water distribution in a large goegraphic region. The region is arid, so water must be brought in from outside the region.
Sources of imported water: Colombo, Sacron, and Calorie rivers. Main customers: Cities of Berdoo, Los Devils, San Go, and Hollyglass.
Cost per Acre Foot Berdoo Colombo River Sacron River $160 140 Los Devils $130 130 San Go $220 190 Hollyglass $170 150 Available 5 6

Calorie River
Needed

190
2

200
5

230
4

1.5

5
(million acre feet)

Question: How much water should Metro take from each river, and how much should they send from each river to each city?

Spreadsheet Formulation
B Unit Cost ($millions) Colombo River Sacron River Calorie River C Berdoo 160 140 190 D Los Devils 130 130 200 E San Go 220 190 230 F Hollyglass 170 150 G H I

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Water Distribution (million acre-feet) Colombo River Sacron River Calorie River Total To City Needed

Berdoo 0 2 0 2 = 2

Los Devils 5 0 0 5 = 5

San Go 0 2.5 1.5 4 = 4

Hollyglass 0 1.5 0 1.5 = 1.5

Total From River 5 6 1.5

<= <= <=

Available 5 6 5 Total Cost ($million) 1,975

Northern Airplane (Production Scheduling)

Northern Airplane Company produces commercial airplanes. The last stage in production is to produce the jet engines and install them.
The company must meet the delivery deadline indicated in column 2. Production and storage costs vary from month to month. Unit Cost of Production ($million) Regular Time 1.08 1.11 1.10 1.13

Maximum Production

Month
1 2 3 4

Scheduled Installations 10 15 25 20

Regular Time 20 30 25 5

Overtime
10 15 10 10

Overtime
1.10 1.12 1.11 1.15

Unit Cost of Storage ($thousand) 15 15 15

Question: How many engines should be produced in each of the four months so that the total of the production and storage costs will be minimized?

Spreadsheet Formulation
B C D 3 Production Cost Regular 4 ($millions) Time 5 Month 1 1.08 6 Month 2 1.11 7 Month 3 1.10 8 Month 4 1.13 9 10 11 Unit Cost 12 ($millions) 1 13 1 (RT) 1.08 14 1 (OT) 1.10 15 2 (RT) 16 Month 2 (OT) 17 Produced 3 (RT) 18 3 (OT) 19 4 (RT) 20 4 (OT) 21 22 23 24 Units Produced 1 25 1 (RT) 10 26 1 (OT) 0 27 2 (RT) 0 28 Month 2 (OT) 0 29 Produced 3 (RT) 0 30 3 (OT) 0 31 4 (RT) 0 32 4 (OT) 0 33 Installed 10 34 = 35 Scheduled Installations 10 36 E Overtime 1.10 1.12 1.11 1.15 G H Storage Cost ($millions per month) 0.015 F I J

Month Installed 2 3 1.10 1.11 1.12 1.13 1.11 1.13 1.12 1.14 1.10 1.11 -

4 1.13 1.15 1.14 1.15 1.12 1.13 1.13 1.15

Month Installed 2 3 5 0 0 0 10 0 0 0 0 25 0 0 0 0 0 0 15 25 = = 15 25

4 5 0 0 0 0 10 5 0 20 = 20

Produced 20 0 10 0 25 10 5 0

<= <= <= <= <= <= <= <=

Maximum Production 20 10 30 15 25 10 5 10 Total Cost ($millions) 77.4

Optimal Production at Northern Airplane

Month

Production

Installations

Stored

1 (RT)
2 (RT) 3 (RT)

20
10 25

10
15 25

10
5 5

3 (OT)
4 (RT)

10
5

0
20

10
0

Middletown School District

Middletown School District is opening a third high school and thus needs to redraw the boundaries for the area of the city that will be assigned to the respective schools.

The city has been divided into 9 tracts with approximately equal populations.
Each school has a minimum and maximum number of students that should be assigned.

The school district management has decided that the appropriate objective is to minimize the average distance that students must travel to school.

Question: How many students from each tract should be assigned to each school?

Data for the Middletown School District

Distance (Miles) to School Tract 1 2 1 2.2 1.4 2 1.9 1.3 3 2.5 1.7 Number of High School Students 500 400

3
4 5 6 7 8 9 Minimum enrollment Maximum enrollment

0.5
1.2 0.9 1.1 2.7 1.8 1.5 1,200 1,800

1.8
0.3 0.7 1.6 0.7 1.2 1.7 1,100 1,700

1.1
2.0 1.0 0.6 1.5 0.8 0.7 1,000 1,500

450
400 500 450 450 400 500

Spreadsheet Formulation
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 B Distance (Miles) Tract 1 Tract 2 Tract 3 Tract 4 Tract 5 Tract 6 Tract 7 Tract 8 Tract 9 C School 1 2.2 1.4 0.5 1.2 0.9 1.1 2.7 1.8 1.5 D School 2 1.9 1.3 1.8 0.3 0.7 1.6 0.7 1.2 1.7 E School 3 2.5 1.7 1.1 2 1 0.6 1.5 0.8 0.7 F G H

Number of Students Tract 1 Tract 2 Tract 3 Tract 4 Tract 5 Tract 6 Tract 7 Tract 8 Tract 9 Min Enrollment Total At School Max Enrollment

School 1 0 400 450 0 350 0 0 0 0 1,200 <= 1,200 <= 1,800

School 2 500 0 0 400 150 0 450 0 0 1,500 <= 1,500 <= 1,700

School 3 0 0 0 0 0 450 0 400 500 1,350 <= 1,350 <= 1,500

Total From Tract 500 400 450 400 500 450 450 400 500

= = = = = = = = =

Total In Tract 500 400 450 400 500 450 450 400 500

Total Distance (miles) 3,530

Energetic (Meeting Energy Needs)

The Energetic Company needs to make plans for the energy systems for a new building. The energy needs fall into three categories:
electricity (20 units) heating water (10 units) heating space (30 units)

The three possible sources of energy are

electricity natural gas solar heating unit (limited to 30 units because of roof size)

Question: How should Energetic meet the energy needs for the new building?

Cost Data for Energetic

Unit Cost Energy Need: Source of Energy Electricity Natural gas Solar heater $400 $500 600 300 $600 500 400 Electricity Water Heating Space Heating

Spreadsheet Formulation
B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 C D Electricity 400 E Energy Need Water Heating 500 600 300 F Space Heating 600 500 400 G H I

Unit Cost ($/day) Source Electricity of Natural Gas Energy Solar Heater

Daily Energy Use Source Electricity of Natural Gas Energy Solar Heater Total Supplied Demand

Electricity 20 0 0 20 = 20

Energy Need Water Heating 0 0 10 10 = 10

Space Heating 0 10 20 30 = 30

Total Used 20 10 30

<=

Max Solar 30 Total Cost ($/day) 24,000

Location of Texagos Facilities

Type of Facility Oil fields Locations 1. Several in Texas 2. Several in California 3. Several in Alaska 1. Near New Orleans, Lousiana 2. Near Charleston, South Carolina 3. Near Seattle, Washington

Refineries

Distribution Centers

1. Pittsburgh, Pennsylvania 2. Atlanta, Georgia 3. Kansas City, Missouri 4. San Francisco, California

Potential Sites for Texagos New Refinery

Potential Site

Main Advantages

Near Los Angeles, California

1. Near California oil fields. 2. Ready access from Alaska oil fields. 3. Fairly near San Francisco distribution center.
1. Near Texas oil fields. 2. Ready access from Middle East imports. 3. Near corporate headquarters. 1. Low operating costs. 2. Centrally located for distribution centers. 3. Ready access to crude oil via the Mississippi River.

Near Galveston, Texas

Near St. Louis, Missouri

Production Data for Texago

Refinery
New Orleans Charleston Seattle New site Total

Crude Oil Needed Annually (Million Barrels) 100 60 80 120 360

Oil Fields
Texas California Alaska Total

Crude Oil Produced Annually (Million Barrels) 80 60 100 240

Needed imports = 360 240 = 120

Cost Data for Shipping to Refineries

Cost per Unit Shipped to Refinery or Potential Refinery (Millions of Dollars per Million Barrels) New Orleans Source Texas California Alaska Middle East 2 5 5 2 4 5 7 3 5 3 3 5 3 1 4 4 1 3 5 3 1 4 7 4 Charleston Seattle Los Angeles Galveston St. Louis

Cost Data for Shipping to Distribution Centers

Cost per Unit Shipped to Distribution Center (Millions of Dollars)

Pittsburgh
Refinery New Orleans 6.5

Atlanta

Kansas City

San Francisco

5.5

Charleston
Seattle Potential Refinery Los Angeles Galveston

7
7

5
8

4
4

7
3

8 5

6 4

3 3

2 6

St. Louis
Number of units needed

4
100

3
80

1
80

5
100

Estimated Operating Costs for Refineries

Site

Annual Operating Cost (Millions of Dollars) 620 570

Los Angeles Galveston

St. Louis

530

Basic Spreadsheet for Shipping to Refineries

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D New Orleans 2 5 5 2

Unit Cost ($millions) Texas Oil California Fields Alaska Middle East

F Refineries Charleston Seattle 4 5 5 3 7 3 3 5

G New Site

Shipment Quantity (millions of barrels) Texas Oil California Fields Alaska Middle East Total Received Demand

New Orleans 0 0 0 0 0 = 100

Refineries Charleston Seattle 0 0 0 0 0 0 0 0 0 0 = = 60 80

New Site 0 0 0 0 0 = 120

Total Shipped 0 0 0 0

= = = =

Supply 80 60 100 120 Total Cost ($millions) 0

Shipping to Refineries, Including Los Angeles

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D New Orleans 2 5 5 2

Unit Cost ($millions) Texas Oil California Fields Alaska Middle East

F Refineries Charleston Seattle 4 5 5 3 7 3 3 5

G Los Angeles 3 1 4 4

Shipment Quantity (millions of barrels) Texas Oil California Fields Alaska Middle East Total Received Demand

New Orleans 40 0 0 60 100 = 100

Refineries Charleston Seattle 0 0 0 0 0 80 60 0 60 80 = = 60 80

Los Angeles 40 60 20 0 120 = 120

Total Shipped 80 60 100 120

= = = =

Supply 80 60 100 120 Total Cost ($millions) 880

Shipping to Refineries, Including Galveston

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D New Orleans 2 5 5 2

Unit Cost ($millions) Texas Oil California Fields Alaska Middle East

F Refineries Charleston Seattle 4 5 5 3 7 3 3 5

G Galveston 1 3 5 3

Shipment Quantity (millions of barrels) Texas Oil California Fields Alaska Middle East Total Received Demand

New Orleans 20 0 20 60 100 = 100

Refineries Charleston Seattle 0 0 0 0 0 80 60 0 60 80 = = 60 80

Galveston 60 60 0 0 120 = 120

Total Shipped 80 60 100 120

= = = =

Supply 80 60 100 120 Total Cost ($millions) 920

Shipping to Refineries, Including St. Louis

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D New Orleans 2 5 5 2

Unit Cost ($millions) Texas Oil California Fields Alaska Middle East

F Refineries Charleston Seattle 4 5 5 3 7 3 3 5

G St. Louis 1 4 7 4

Shipment Quantity (millions of barrels) Texas Oil California Fields Alaska Middle East Total Received Demand

New Orleans 0 0 20 80 100 = 100

Refineries Charleston Seattle 0 0 20 0 0 80 40 0 60 80 = = 60 80

St. Louis 80 40 0 0 120 = 120

Total Shipped 80 60 100 120

= = = =

Supply 80 60 100 120 Total Cost ($millions) 960

Basic Spreadsheet for Shipping to D.C.s

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D Pittsburgh 6.5 7 7

Unit Cost ($millions) New Orleans Refineries Charleston Seattle New Site

E F Distribution Center Atlanta Kansas City 5.5 6 5 4 8 4

G San Francisco 8 7 3

Shipment Quantity (millions of barrels) New Orleans Refineries Charleston Seattle New Site Total Received Demand

Pittsburgh 0 0 0 0 0 = 100

Distribution Center Atlanta Kansas City 0 0 0 0 0 0 0 0 0 0 = = 80 80

San Francisco 0 0 0 0 0 = 100

Total Shipped 0 0 0 0

= = = =

Supply 100 60 80 120 Total Cost ($millions) 0

Shipping to D.C.s When Choose Los Angeles

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D Pittsburgh 6.5 7 7 8

Unit Cost ($millions) New Orleans Refineries Charleston Seattle Los Angeles

E F Distribution Center Atlanta Kansas City 5.5 6 5 4 8 4 6 3

G San Francisco 8 7 3 2

Shipment Quantity (millions of barrels) New Orleans Refineries Charleston Seattle Los Angeles Total Received Demand

Pittsburgh 80 0 20 0 100 = 100

Distribution Center Atlanta Kansas City 20 0 60 0 0 0 0 80 80 80 = = 80 80

San Francisco 0 0 60 40 100 = 100

Total Shipped 100 60 80 120

= = = =

Supply 100 60 80 120 Total Cost ($millions) 1,570

Shipping to D.C.s When Choose Galveston

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D Pittsburgh 6.5 7 7 5

Unit Cost ($millions) New Orleans Refineries Charleston Seattle Galveston

E F Distribution Center Atlanta Kansas City 5.5 6 5 4 8 4 4 3

G San Francisco 8 7 3 6

Shipment Quantity (millions of barrels) New Orleans Refineries Charleston Seattle Galveston Total Received Demand

Pittsburgh 100 0 0 0 100 = 100

Distribution Center Atlanta Kansas City 0 0 60 0 0 0 20 80 80 80 = = 80 80

San Francisco 0 0 80 20 100 = 100

Total Shipped 100 60 80 120

= = = =

Supply 100 60 80 120 Total Cost ($millions) 1,630

Shipping to D.C.s When Choose St. Louis

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

D Pittsburgh 6.5 7 7 4

Unit Cost ($millions) New Orleans Refineries Charleston Seattle St. Louis

E F Distribution Center Atlanta Kansas City 5.5 6 5 4 8 4 3 1

G San Francisco 8 7 3 5

Shipment Quantity (millions of barrels) New Orleans Refineries Charleston Seattle St. Louis Total Received Demand

Pittsburgh 100 0 0 0 100 = 100

Distribution Center Atlanta Kansas City 0 0 60 0 0 0 20 80 80 80 = = 80 80

San Francisco 0 0 80 20 100 = 100

Total Shipped 100 60 80 120

= = = =

Supply 100 60 80 120 Total Cost ($millions) 1,430

Annual Variable Costs

Site Los Angeles Galveston

Total Cost of Shipping Crude Oil $880 million 920 million

Total Cost of Shipping Finished Product $1.57 billion 1.63 billion

Operating Cost for New Refinery $620 million 570 million

Total Variable Cost $3.07 billion 3.12 billion

St. Louis

960 million

1.43 billion

530 million

2.92 billion

Sellmore Company Assignment Problem

The marketing manager of Sellmore Company will be holding the companys annual sales conference soon. He is hiring four temporary employees:
Ann Ian Joan Sean

Each will handle one of the following four tasks:

Word processing of written presentations Computer graphics for both oral and written presentations Preparation of conference packets, including copying and organizing materials Handling of advance and on-site registration for the conference

Question: Which person should be assigned to which task?

Data for the Sellmore Problem

Required Time per Task (Hours) Temporary Employee Ann Ian Joan Sean Word Processing 35 47 39 32 Graphics 41 45 56 51 Packets 27 32 36 25 Registrations 40 51 43 46 Hourly Wage $14 12 13 15

Spreadsheet Formulation
B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Required Time (Hours) Assignee Ann Ian Joan Sean C D Word Processing 35 47 39 32 E Task Graphics 41 45 56 51 Packets 27 32 36 25 Registrations 40 51 43 46 Hourly Wage $14 $12 $13 $15 F G H I J

Task Cost Assignee Ann Ian Joan Sean Word Processing $490 $564 $507 $480 Graphics $574 $540 $728 $765 Packets $378 $384 $468 $375 Registrations $560 $612 $559 $690

Task Assignment Assignee Ann Ian Joan Sean Total Assigned Demand Word Processing 0 0 0 1 1 = 1 Graphics 0 1 0 0 1 = 1 Packets 1 0 0 0 1 = 1 Registrations 0 0 1 0 1 = 1 Total Assignments 1 1 1 1 Supply 1 1 1 1 Total Cost $1,957

= = = =

The Model for Assignment Problems

Given a set of tasks to be performed and a set of assignees who are available to perform these tasks, the problem is to determine which assignee should be assigned to each task.

To fit the model for an assignment problem, the following assumptions need to be satisfied:
1. 2. 3. 4. 5. The number of assignees and the number of tasks are the same. Each assignee is to be assigned to exactly one task. Each task is to be performed by exactly one assignee. There is a cost associated with each combination of an assignee performing a task. The objective is to determine how all the assignments should be made to minimize the total cost.

The Network Representation

Assignees (Ann) A1 Tasks

490 574 378

T1

(Word pr oc essing)

560

564
(I an) A2

540 612 384

T2

(Gr aphics)

507
(Joan) A3

728 468 559 765 375

T3 (Packets)

480
(Sean) A4

690

T4

(Registrations)

Job Shop (Assigning Machines to Locations)

The Job Shop Company has purchased three new machines of different types. There are five available locations where the machine could be installed.

Some of these locations are more desirable for particular machines because of their proximity to work centers that will have a heavy work flow to these machines.

Question: How should the machines be assigned to locations?

Materials-Handling Cost Data

Cost per Hour

Location:
Machine 1

$13

$16

$12

$14

$15

2
3

15
4

13
10

20
6

16
7

Spreadsheet Formulation

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

B Cost ($/hour) Machine 1 Machine 2 Machine 3

C Location 1 13 15 4

D Location 2 16 7

E Location 3 12 13 10

F Location 4 14 20 6

G Location 5 15 16 7

Assignment Machine 1 Machine 2 Machine 3 Total Assigned Demand

Location 1 0 0 1 1 <= 1

Location 2 0 0 0 0 <= 1

Location 3 0 1 0 1 <= 1

Location 4 1 0 0 1 <= 1

Location 5 0 0 0 0 <= 1

Total Assignments 1 1 1

= = =

Supply 1 1 1 Total Cost ($/hour) 31

Better Products (No Product Splitting)

B 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Unit Cost Plant 1 Plant 2 Plant 3 Required Production C Product 1 $41 $40 $37 20 D Product 2 $27 $29 $30 30 E Product 3 $28 $27 30 F Product 4 $24 $23 $21 40 G H I

Cost ($/day) Plant 1 Plant 2 Plant 3

Product 1 $820 $800 $740

Product 2 $810 $870 $900

Product 3 $840 $810

Product 4 $960 $920 $840

Assignment Plant 1 Plant 2 Plant 3 Total Assigned Demand

Product 1 0 1 0 1 = 1

Product 2 1 0 0 1 = 1

Product 3 1 0 0 1 = 1

Product 4 0 0 1 1 = 1

Total Assignments 2 1 1

<= <= =

Supply 2 2 1 Total Cost $3,290

Middletown School District (No Tract Splitting)

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 B Distance (Miles) Tract 1 Tract 2 Tract 3 Tract 4 Tract 5 Tract 6 Tract 7 Tract 8 Tract 9 C School 1 2.2 1.4 0.5 1.2 0.9 1.1 2.7 1.8 1.5 D School 2 1.9 1.3 1.8 0.3 0.7 1.6 0.7 1.2 1.7 E School 3 2.5 1.7 1.1 2 1 0.6 1.5 0.8 0.7 F Number of Students 500 400 450 400 500 450 450 400 500 G H Cost (Miles) Tract 1 Tract 2 Tract 3 Tract 4 Tract 5 Tract 6 Tract 7 Tract 8 Tract 9 I School 1 1100 560 225 480 450 495 1215 720 750 J School 2 950 520 810 120 350 720 315 480 850 K School 3 1250 680 495 800 500 270 675 320 350

Assignment Tract 1 Tract 2 Tract 3 Tract 4 Tract 5 Tract 6 Tract 7 Tract 8 Tract 9 Total Assigned Demand

School 1 0 1 1 0 1 0 0 0 0 3 = 3

School 2 1 0 0 1 0 0 1 0 0 3 = 3

School 3 0 0 0 0 0 1 0 1 1 3 = 3

Total Assignments 1 1 1 1 1 1 1 1 1

= = = = = = = = =

Supply 1 1 1 1 1 1 1 1 1 Total Distance (Miles) 3560