Transportation Problem
A Network Model and Linear
Programming Formulation
Introduction
The transportation problem arises frequently in planning for
the distribution of goods and services from several supply
locations to several demand locations.
The quantity of goods available at each supply location
(origin) is limited and the quantity of goods needed at each of
several demand locations (destination) is known.
The objective in a transportation problem is to minimize the
cost of shipping goods from the origin to the destinations.
Formulation
Linear programming model of the transportation problem is
i = index for origins, i = 1, 2, .... , m
j = index for destinations, j = 1, 2, .... , n
xij = = number of units shipped from origin i to destination j
cij = cost per unit of shipping from origin i to destination j
si = supply or capacity in units at origin i
dj = demand in units at destination j
Formulation
m
Min
c x
i 1 j 1
ij ij
Subject to
n
x ij sii = 1, 2, ..... , m Supply
j 1
m
x
i 1
ij
dj j= 1, 2, ..... , n Demand
xij 0 for all i and j
Add constraints of the form xij Lij if the route from origin i to
destination j has capacity Lij is called a capacitated
transportation problem.
Add rout minimum constraints of the form xij Mij if the route
from origin i to destination j must handle at least Mij units.
Foster Generators
Foster Generators has plants in Cleveland, Bedford and York.
The production capacities over the next three month planning
period for one particular type of generator are as follows:
Origin
1
2
3
Plant
Cleveland
Bedford
York
Total
Three Month Production
Capacity (units)
5000
6000
2500
13500
Foster Generators
The firm distributers its generators through four regional
distribution centres located in Boston, Chicago, St. Louis and
Lexington; the tree month forecast of demand for the
distribution centres is follows:
Distribution Three Month Demand
Destination Centre
Forecast (units)
1
Boston
6000
2
Chicago
4000
3
St. Louis
2000
4
Lexington
1500
Total
13500
Foster Generators
Management would like to determine how much of its
production should be shipped from each plant to each
distribution centre. Figure shows that the 12 distribution routes
Foster can used. Such a graph is called network; the circle is
referred to the nodes and the line connecting the nodes as arcs.
Each origin or destination is represented by a node and each
possible shipping route is represented by an arc. The amount
of supply is written next to each origin node and the amount of
demand is written next to each destination node. The goods
shipped from origins to destinations represent the flow in
network. The direction of flow from origins to destinations is
indicated by the arrows.
Foster Generators
For Fosters transportation problem, the objective is to
determine the route to be used and the quantity to be shipped
via each route that will provide the minimum total
transportation cost. The cost for each unit shipped on each
route is given in the Table and is shown on each arc in Figure.
Destination
Origin
Boston Chicago
St. Louis
Cleveland
3
2
7
Bedford
7
5
2
York
2
5
4
Lexington
6
3
5
Foster Generators Formulation
There are 12 variables and 7 constraints for Foster Generators
transportation problem:
Min 3x11 + 2x12 + 7x13 + 6x14 + 7x21 + 5x22 + 2x23 + 3x24 + 2x31
+ 5x32 + 4x33 + 5x34
x11 + x12 + x13 + x14 5000
x21 + x22 + x23 + x24 6000
x31 + x32 + x33 + x34 2500
x11 + x21 + x31 = 6000
x12 + x22 + x32 = 4000
x13 + x23 + x33 = 2000
x14 + x24 + x34 = 1500
xij 0 for i = 1, 2, 3; j = 1, 2, 3, 4
Transhipment Problem
Transhipment problem is an extension of transportation
problem 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 and directly from
origins to destinations.
The supply available at each origin is limited and the 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.
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 firms 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
Kansas City
2
6
3
Louisville
4
4
6
New Orleans
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
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 the 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
800+B
900+B
500
The 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.
