Transhipment Model
Transhipment is an extension of transportation in which
intermediate nodes referred to as transhipment nodes.
• Transhipment problem permits shipments of goods
– from origin to transhipment nodes and on to destination,
– from one origin to another origin,
– from one transhipment location to another,
– from one destination location to another
– directly from origins to destinations.
• Supply available at each origin is limited and demand at each
destination is specified.
• Objective of the transhipment problem is to determine how
many units should be shipped over each arc in the network so
that all destination demands are satisfied with the minimum
possible transportation cost.
• Example
• Two automobile plants, Pl and P2, are linked to three dealers, Dl, D2,
and D3, by way of two transit centers T1 and T2. The supply amounts
at plants P1 and P2 are 1000 and 1200 cars and the demand amounts at
dealers Dl, D2, and D3, are 800, 900, and 300 cars. The shipping cost
per car (in hundreds of dollars) between pairs of nodes are shown on
the connecting links (or arcs) of the network in the figure.
• Solution:
• Transshipment occurs in the network in figure, because entire
supply amount of 2200 (= 1000 + 1200) cars at nodes P1 and
P2 could pass through any node of network before ultimately
reaching their destinations at nodes Dl, D2, and D3.
• The nodes of the network with both input and output arcs (i.e.
T1, T2, Dl, and D2) act as both sources and destinations and are
referred to as transshipment nodes.
• Remaining nodes are either pure supply nodes (i.e. Pl and P2)
or pure demand nodes (i.e. D3).
• Transshipment model can be converted into a regular transportation
model with six sources (P1, P2, T1, T2, Dl and D2) and five
destinations (T1, T2, Dl, D2, and D3).
• Amounts of supply and demand at different nodes are
– Supply at a pure supply node = Original supply
– Supply at a transshipment node = Original supply + Buffer
– Demand at a pure demand node = Original demand
– Demand at a transshipment node = Original demand + Buffer
– Buffer amount should be sufficiently large to allow all original supply (or
demand) units to pass through any of transshipment nodes.
• Let B be desired buffer amount, then B = Total supply (or demand) =
1000 + 1200 (or 800 + 900 + 500) = 2200 cars
• Using information and unit shipping costs given on network the
equivalent regular transportation model is constructed
T1 T2 D1 D2 D3 Supply
P1 3 4 M M M 1000
P2 2 5 M M M 1200
T1 0 7 8 6 M B
T2 M 0 M 4 9 B
D1 M M 0 5 M B
D2 M M M 0 3 B
Demand B B 800+B 900+B 500
• Solution of resulting transportation model (determined by
TORA) is shown in figure.
• Dealer D2 receives 1400 cars keeps to satisfy its demand and
sends the remaining 500 cars to dealer D3.
Ryan Electronics
• Ryan is an electronics company with production facilities in
Denver and Atlanta. Components produced at either facility may
be shipped to either of the firm’s regional warehouses, which are
located in Kansas City and Louisville. From the regional
warehouse the firm supplies retail outlets in Detroit, Miami,
Dallas and New Orleans. The transportation cost per unit for each
distribution route is shown in the Table given bellow and the arcs
of the network model depicted in the Figure. The key features of
the problem are shown in the network model in Figure. The
supply at each origin and demand at each destination are shown
in the left and right margins, respectively. Nodes 1 and 2 are the
origin nodes; nodes 3 and 4 are the transhipment nodes and nodes
5, 6, 7 and 8 are the destination nodes.
Ryan Electronics
Table: Transportation costs per unit
Warehouse
Plant Kansas City Louisville
Denver 2 3
Atlanta 3 1
Retail Outlet
Warehouse Detroit Miami Dallas New Orleans
Kansas City 2 6 3 6
Louisville 4 4 6 5
Ryan Electronics
• Min 2x13 + 3x14 + 3x23 + 1x24 + 2x35 + 6x36 + 3x37 + 6x38 + 4x45 + 4x46 +
6x47 + 5x48
• Subject to
• x13 + x14 ≤ 600
• x23 + x24 ≤ 400
• - x13 - x23 + x35 + x36 + x37 + x38 = 0
• - x14 - x24 + x45 + x46 + x47 + x48 = 0
• x35 + x45 = 200
• x36 + x46 = 150
• x37 + x47 = 350
• x38 + x48 = 300
• xij ≥ 0 for all i and j
