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Supplement 8

The Transportation Model

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

Supplement 8: Learning Objectives


You should be able to:
Describe the nature of a transportation problem
Set up transportation problems in the general linear
programming format
Interpret computer solutions

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Transportation Problem
Involves finding the lowest-cost plan for
distributing stocks of goods or supplies from
multiple origins to multiple destinations that
demand the goods.
Demand

Supply

Demand

Supply

Demand

Supply

Demand
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Transportation Model: Applications


The transportation model has numerous applications:
Location decisions
Compare location alternatives in terms of their impact cost on
the total distribution costs for the system
Involves working through a separate model for each location
being considered
Production planning
Capacity planning
Transshipment

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Transportation Problem
Shipping (supply) points
Any place from which good are sent
Factories
Warehouses
Departments

Destinations
Any point that receives goods
Factories
Warehouses
Departments

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Model: Information Requirements


Information requirements
1. A list of the origins and each ones capacity or
supply quantity per period
2. A list of the destinations and each ones demand per
period
3. The unit cost of shipping items from each origin to
each destination

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Model: Assumptions
Transportation model assumptions
1. The items to be shipped are homogeneous
2. Shipping cost per unit is the same regardless of the
number of units shipped
3. There is only one route or mode of transportation
being used between each origin and destination

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Transportation Table

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Transportation Table

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Transportation Problem: Formulation


xij the number of units to ship from factory i to warehouse j
Decision Variables

Minimize

where
i 1, 2, and 3 and j A, B, C, and D
4 x1 A 7 x1B 7 x1C 1x1D 12 x2 A 3x2 B 8 x2C
8 x2 D 8 x3 A 10 x3 B 16 x3C 5 x3 D

Subject to
Supply (rows)

x1 A x1B x1C x1D 100


x2 A x2 B x2C x2 D 200
x3 A x3 B x3C x3 D 150

Demand (columns)

x1 A x2 A x3 A 80
x1B x2 B x3 B 90
x1C x2C x3C 120
x1D x2 D x3 D 160
xij 0 for all i and j
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Transportation: Computer Solution


Transportation problems can be solved manually in a
straightforward manner
Except for very small problems, solving the problem manually
can be very time consuming
For medium to large problems, computer solution techniques are
more practical

A variety of software packages are available for solving


the transportation model
Some require formulating the problem as a general LP model
Others allow data entry in a more simple, tabular format

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Transportation Problem: Excel Template

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