Quantitative Analysis for Management

Fourteenth Edition

Chapter 9
Transportation,
Assignment, and
Network Models

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Learning Objectives
After completing this chapter, students will be able to:
9.1 Construct LP problems for the transportation,
assignment, and transshipment models.
9.2 Solve facility location and other application problems
with transportation models.
9.3 Use LP to model and solve maximal-flow problems.
9.4 Use LP to model and solve shortest route problems.
9.5 Solve minimal-spanning tree problems.

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Introduction (1 of 2)
• LP problems modeled as networks
– Helps visualize and understand problems
▪ Transportation problem
▪ Transshipment problem
▪ Assignment problem
▪ Maximal-flow problem
▪ Shortest-route problem
▪ Minimal-spanning tree problem
– Specialized algorithms available

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Introduction (2 of 2)
• Common terminology for network models
– Points on the network are referred to as nodes
▪ Typically circles
– Lines on the network that connect nodes are called
arcs

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The Transportation Problem
• Deals with the distribution of goods from several points of
supply (sources) to a number of points of demand
(destinations)
– Usually given the capacity of goods at each source
and the requirements at each destination
– Typically, objective is to minimize total transportation
and production costs

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Linear Program for Transportation (1 of 4)
• Executive Furniture Figure 9.1 Network
Corporation Representation of a
transportation problem Transportation Problem, with
– Minimize Costs, Demands, and Supplies
transportation cost
– Meet demand
– Not exceed supply

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Linear Program for Transportation (2 of 4)
Let X ij  number of units shipped from source i to
destination j

Where
i = 1, 2, 3, with 1 = Des Moines, 2 = Evansville,
and 3 = Fort Lauderdale
j = 1, 2, 3, with 1 = Albuquerque, 2 = Boston, and
3 = Cleveland

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Linear Program for Transportation (3 of 4)
Minimize total cost  5 X11  4 X12  3 X13  8 X 21  4 X 22
 3 X 23  9 X 31  7 X 32  5 X 33
Subject to:
X11  X12  X13 100 (Des Moines supply)

X 21  X 22  X 23 300 (Evansville supply)

X 31  X 32  X 33 300 (Fort Lauderdale supply)

X11  X 21  X 31 300 (Albuquerque demand)

X12  X 22  X 32 200 (Boston demand)

X13  X 23  X 33 200 (Cleveland demand)

X ij 0 for all i and j
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Linear Program for Transportation (4 of 4)
Optimal solution

100 units from Des Moines to Albuquerque

200 units from Evansville to Boston
100 units from Evansville to Cleveland
200 units from Ft. Lauderdale to Albuquerque
100 units from Ft. Lauderdale to Cleveland
Total cost = $3,900

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Using Excel QM—Transportation (1 of 3)
Program 9.1 Executive Furniture Corporation Solution in Excel Using
Excel QM

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A General LP Model for Transportation
Problems (1 of 2)
Let
X ij  number of units shipped from source i to destination j

cij  cost of one unit from source i to destination j

si  supply at source I

d j  demand at destination j

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A General LP Model for Transportation
Problems (2 of 2)
n m
Minimize cost    cij xij
j 1 i  1

Subject to:
n

x
j 1
ij si i 1,2,..., m

x
i 1
ij d j j 1,2,..., n

xij 0 for all i and j

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Facility Location Analysis (1 of 7)
• Transportation method especially useful
• New location is major financial importance
• Several alternative locations evaluated
• Subjective factors are considered
• Final decision also involves minimizing total shipping and
production costs
• Alternative facility locations analyzed within the
framework of one overall distribution system

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Facility Location Analysis (2 of 7)
• Hardgrave Machine Company produces computer
components in Cincinnati, Salt Lake City, and Pittsburgh
• Four warehouses in Detroit, Dallas, New York, and Los
Angeles
• Two new plant sites being considered—Seattle and
Birmingham
• Which of the new locations will yield the lowest cost for
the firm in combination with the existing plants and
warehouses?

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Facility Location Analysis (3 of 7)
Table 9.1 Hardgrave’s Demand and Supply Data
Monthly Demand Cost to Produce
Warehouse (Units) Production Plant Monthly Supply One Unit ($)
Detroit 10,000 Cincinnati 15,000 48
Dallas 12,000 Salt Lake City 6,000 50
New York 15,000 Pittsburgh 14,000 52
Blank Blank

Los Angeles 9,000 35,000

Blank Blank Blank Blank

46,000

Supply needed from new plant 46,000  35,000 11,000 units per month

Estimated Production Cost per Unit at Proposed Plants

Seattle $53

Birmingham $49

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 Facility Location Analysis (4 of 7)
Table 9.2 Hardgrave’s Shipping Costs
blank

To Detroit To Dallas To New York To Los Angeles

From Cincinnati $25 $55 $40 $60

From Salt Lake City 35 30 50 40

From Pittsburgh 36 45 26 66

From Seattle 60 38 65 27

From Birmingham 35 30 41 50

Solve two transportation problems

– one for each combination

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Facility Location Analysis (5 of 7)
X ij  number of units shipped from source i to destination j

where
i = 1, 2, 3, 4 with 1 = Cincinnati, 2 = Salt Lake City,
3 = Pittsburgh, and 4 = Seattle
j = 1, 2, 3, 4 with 1 = Detroit, 2 = Dallas, 3 = New
York, and 4 = Los Angeles

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Facility Location Analysis (6 of 7)
Minimize total cost  73 X11  103 X12  88 X13  108 X14  85 X 21  80 X 22 
100 X 23  90 X 24  88 X 31  97 X 32  78 X 33
 118 X 34  113 X 41  91X 42  118 X 43  80 X 44
Subject to:
X11  X 21  X 31  X 41 10,000 Detroit demand
X12  X 22  X 32  X 42 12,000 Dallas demand
X13  X 23  X 33  X 43 15,000 New York demand
X14  X 24  X 34  X 44 9,000 Los Angeles demand
X11  X12  X13  X14 15,000 Cincinnati supply
X 21  X 22  X 23  X 24 6,000 Salt Lake City supply
X 31  X 32  X 33  X 34 14,000 Pittsburgh supply
X 41  X 42  X 43  X 44 11,000 Seattle supply
All variables X ij 0
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Facility Location Analysis (7 of 7)
• The total cost for the Seattle alternative = $3,704,000

Reformulating the problem for the Birmingham alternative

and solving, the total cost = $3,741,000

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Using Excel QM—Transportation (2 of 3)
Program 9.2 Facility Location (Seattle) Solution in Excel Using
Excel QM

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Using Excel QM—Transportation (3 of 3)
Program 9.3 Facility Location (Birmingham) Solution in Excel Using
Excel QM

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The Assignment Problem
• This class of problem determines the most efficient
assignment of people or equipment to particular tasks
• Objective is typically to minimize total cost or total task
time

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Linear Program for Assignment Example (1 of 5)

• The Fix-it Shop has just received three new repair

projects that must be repaired quickly
1. A radio
2. A toaster oven
3. A coffee table
• Three workers with different talents are able to do the
jobs
• Owner estimates wage cost for workers on projects
• Objective—minimize total cost

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Linear Program for Assignment Example (2 of 5)

Figure 9.2 Example of an Assignment Problem in a Transportation

Network Format

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Linear Program for Assignment Example (3 of 5)

Let
 1 if person i is assigned to project j
X ij = 
 0 otherwise

where
i = 1, 2, 3, with 1 = Adams, 2 = Brown, and 3 = Cooper
j = 1, 2, 3, with 1 = Project 1, 2 = Project 2, and 3 =
Project 3

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Linear Program for Assignment Example (4 of 5)

Minimize total cost  11X11  14 X12  6 X13  8 X 21

 10 X 22  11X 23  9 X 31
 12 X 32  7 X 33

subject to
X11  X12  X13 1
X 21  X 22  X 23 1
X 31  X 32  X 33 1
X11  X 21  X 31 1
X12  X 22  X 32 1
X13  X 23  X 33 1
X ij 0 or 1 for all i and j
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Linear Program for Assignment Example (5 of 5)

• Solution
• X13 1, Adams assigned to Project 3
• X 22 1, Brown assigned to Project 2
• X 31 1, Cooper is assigned to Project 1
• Total cost = $25

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Using Excel QM—Assignment
Program 9.4 Mr. Fix-It Shop Assignment Solution in Excel Using
Excel QM

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The Transshipment Problem (1 of 6)
• Items are being moved from a source to a destination through
an intermediate point (a transshipment point)
• Frosty Machines manufactures snow blowers in Toronto and
Detroit
• Shipped to regional distribution centers in Chicago and Buffalo
• Then shipped to supply houses in New York, Philadelphia, and
St. Louis
• Shipping costs vary by location and destination
• Snow blowers cannot be shipped directly from the factories to
the supply houses

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The Transshipment Problem (2 of 6)
Figure 9.3 Network Representation of a Transshipment Example

Can you identify the seven constraints?

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The Transshipment Problem (3 of 6)
Table 9.3 Frosty Machines Transshipment Data
To
To New York Philadelphi
From To Chicago To Buffalo City a To St. Louis Supply
blank Blank blank

Toronto $4 $7 800
Blank blank Blank

Detroit $5 $7 700
blank Blank Blank

Chicago $6 $4 $5
Blank Blank Blank

Buffalo $2 $3 $4
blank blank blank

Demand 450 350 300

Minimize transportation costs associated with shipping

snow blowers subject to demands and supplies

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The Transshipment Problem (4 of 6)
Decision variables
X ij  number of units shipped from location (node) i to
location (node) j

where:
i = 1, 2, 3, 4
j = 3, 4, 5, 6, 7

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The Transshipment Problem (5 of 6)
Minimize cost = 4 X13  7 X14  5 X 23  7 X 24  6 X 35  4 X 36  5 X 37
 2 X 45  3 X 46  4 X 47
subject to
X13  X14 800 (Supply at Toronto [node 1])
X 23  X 24 700 (Supply at Detroit [node 2])
X 35  X 45 450 (Demand at New York [node 5])
X 36  X 46 350 (Demand at Philadelphia [node 6])
X 37  X 47 300 (Demand at St. Louis [node 7])
X13  X 23  X 35  X 36  X 37 (Shipping through Chicago [node 3])
X14  X 24  X 45  X 46  X 47 (Shipping through Buffalo [node 4])
X ij 0 for all i and j (nonnegativity)
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The Transshipment Problem (6 of 6)
• Ship 650 units from Toronto to Chicago
• Ship 150 units from Toronto to Buffalo
• Ship 300 units from Detroit to Buffalo
• Ship 350 units from Chicago to Philadelphia
• Ship 300 units form Chicago to St. Louis
• Ship 450 units from Buffalo to New York

Total cost = $9,550

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Using Excel QM—Transshipment
Program 9.5 Excel QM Solution to Frosty Machines
Transshipment Problem in Excel

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Maximal-Flow Problem (1 of 4)
• Determining the maximum amount of material that can
flow from one point (the source) to another (the sink) in
a network
• Two common methods
– Linear programming
– Maximal-flow technique

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Maximal-Flow Problem (2 of 4)
• Determine maximum number of cars from east to west for Waukesha
WI road system

Figure 9.4 Road Network for Waukesha Maximal-Flow Example

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Maximal-Flow Problem (3 of 4)
Variables
X ij  flow from node i to node j

where

i = 1, 2, 3, 4, 5, 6
j = 1, 2, 3, 4, 5, 6
• Constraints necessary for
– Capacity of each arc
– Equal flows into and out of each arc

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Maximal-Flow Problem (4 of 4)
Maximize flow = X 61
subject to
X12 3 X13 10 X14 2 Capacities for arcs from node 1
X21 1 X24 1 X26 2 Capacities for arcs from node 2
X34 3 X35 2 Capacities for arcs from node 3
X 42 1 X 43 1 X 46 1 Capacities for arcs from node 4
X53 1 X56 1 Capacities for arcs from node 5
X62 2 X64 1 Capacities for arcs from node 6
(X21  X61 )  (X12  X13  X14 ) 0 Flows into = flows out of node 1
(X12  X 42  X62 )  (X21  X24  X26 ) 0 Flows into = flows out of node 2
(X13  X 43  X53 )  (X34  X35 ) 0 Flows into = flows out of node 3
(X14  X24  X34  X64 )  (X 42  X43  X 46 ) 0 Flows into = flows out of node 4
(X35 )  (X56  X53 ) 0 Flows into = flows out of node 5
(X26  X 46  X56 )  (X61  X62  X64 ) 0 Flows into = flows out of node 6
Xij 0
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Using Excel QM—Maximal Flow
Program 9.6 Waukesha Maximal-Flow Solution in Excel Using
Excel QM

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Shortest-Route Problem (1 of 5)
• Find the shortest distance from one location to another
• Can be modeled as
– A linear programming problem with 0-1 variables
▪ A special type of transshipment problem
– Using specialized algorithm

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Shortest-Route Problem (2 of 5)
• Ray Design transports furniture items from the plant to the
warehouse
– Travel through several cities
– No direct interstate highways
• Find the route with the shortest distance
Figure 9.5 Roads from Ray’s Plant to Warehouse

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Shortest-Route Problem (3 of 5)
Variables
X ij 1 if arc from node i to node j is selected and X ij 0

otherwise

where

i = 1, 2, 3, 4, 5
j = 2, 3, 4, 5, 6

Constraints specify the number of units going into a node

must equal the number of units going out of the node

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Shortest-Route Problem (4 of 5)
Origin point must ship one unit
X12  X13 1
Final destination must have one unit shipped into it
X 46  X 56 1

Intermediate nodes must have same amounts entering and

leaving
X12  X 32  X 23  X 24  X 25
or
X12  X 32  X 23  X 24  X 25 0
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Shortest-Route Problem (5 of 5)
Minimize distance  100 X12  200 X13  50 X 23  50 X 32
 200 X 24  200 X 42  100 X 25
 100 X 52  40 X 35  40 X 53  150 X 45
 150 X 54  100 X 46  100 X 56

subject to
X12  X13 1 Node 1
X12  X 32  X 23  X 24  X 25 0 Node 2
X13  X 23  X 32  X 35 0 Node 3
X 24  X 54  X 42  X 45  X 46 0 Node 4
X 25  X 35  X 45  X 52  X 53  X 54  X 56 0 Node 5
X 46  X 56 1 Node 6
All variables = 0 or 1
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Using Excel QM—Shortest Route
Program 9.7 Ray Designs, Inc., Solution in Excel Using Excel Q M

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Minimal-Spanning Tree Problem (1 of 8)
• Connecting all points of a network together while
minimizing the total distance of the connections
• Linear programming can be used but is complex
• Minimal-spanning tree technique is quite easy

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Minimal-Spanning Tree Problem (2 of 8)
Steps for the Minimal-Spanning Tree Technique
1. Select any node in the network
2. Connect this node to the nearest node that minimizes the total
distance
3. Considering all of the nodes that are now connected, find and
connect the nearest node that is not connected. If there is a tie for
the nearest node, select one arbitrarily. A tie suggests there may be
more than one optimal solution
4. Repeat the third step until all nodes are connected

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Minimal-Spanning Tree Problem (3 of 8)
• Lauderdale Construction
– Housing project in Panama City Beach
– Determine the least expensive way to provide water and power
to each house
Figure 9.6 Network for Lauderdale Construction

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Minimal-Spanning Tree Problem (4 of 8)
Step 1 : Arbitrarily select node 1
Step 2 : Connect node 1 to node 3 (nearest)

Figure 9.7 First Iteration for Lauderdale Construction

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Minimal-Spanning Tree Problem (5 of 8)
Step 3 : Connect next nearest unconnected node, node 4 Continue for
other unconnected nodes
Figure 9.8 Second and Third Iterations for Lauderdale Construction

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Minimal-Spanning Tree Problem (6 of 8)
Step 4 : Repeat the process

Figure 9.9 Last Four Iterations for Lauderdale Construction

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Minimal-Spanning Tree Problem (7 of 8)
Step 4 : Repeat the process

Figure 9.9 Last Four Iterations for Lauderdale Construction

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Minimal-Spanning Tree Problem (8 of 8)
Table 9.4 Summary of Steps in Lauderdale Construction
Minimal-Spanning Tree Problem
Closest
Connected Unconnected Unconnected Arc Arc Total
Step Nodes Nodes Nodes Selected Length Distance
1 1 2, 3, 4, 5, 6, 7, 8 3 1–3 2 2

2 1, 3 2, 4, 5, 6, 7, 8 4 3–4 2 4

3 1, 3, 4 2, 5, 6, 7, 8 2 or 6 3–2 3 7

4 1, 2, 3, 4 5, 6, 7, 8 5 or 6 2–5 3 10

5 1, 2, 3, 4, 5 6, 7, 8 6 3–6 3 13

6 1, 2, 3, 4, 5, 6 7, 8 8 6–8 1 14

7 1, 2, 3, 4, 5, 6, 8 7 7 8–7 2 16

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Using Excel QM—Minimal Spanning Tree
Program 9.8 Lauderdale Construction Minimal-Spanning Tree
Example

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