Transportation, Transshipment and Assignment Problems

Transportation Problem
A distribution-type problem in which supplies of goods that are held at various locations are to be distributed to other receiving locations. The solution of a transportation problem will indicate to a manager the quantities and costs of various routes and the resulting minimum cost. Used to compare location alternatives in deciding where to locate factories and warehouses to achieve the minimum cost distribution configuration.

A transportation problem
Typically involves a set of sending locations, which are referred to as origins, and a set of receiving locations, which are referred to as destinations. To develop a model of a transportation problem, it is necessary to have the following information: 1. Supply quantity (capacity) of each origin. 2. Demand quantity of each destination. 3. Unit transportation cost for each origin-destination route.

Transshipment Problems

A transportation problem in which some locations are used as intermediate shipping points, thereby serving both as origins and as destinations. Involve the distribution of goods from intermediate nodes in addition to multiple sources and multiple destinations.

The Assignment-type Problems

Involve the matching or pairing of two sets of items such as jobs and machines, secretaries and reports, lawyers and cases, and so forth.
Have different cost or time requirements for different pairings.

Network diagram of a Transportation Problem

Solve it using excel:

Special Cases of Transportation Problems

Maximization Transportation-type problems that concern profits or revenues rather than costs with the objective to maximize profits rather than to minimize costs. Unacceptable Routes Certain origin-destination combinations may be unacceptable due to weather factors, equipment breakdowns, labor problems, or skill requirements that either prohibit, or make undesirable, certain combinations (routes).

Special Cases of Transportation Problems

Unequal Supply and Demand Situations in which supply and demand are not equal such that it is necessary to modify the original problem so that supply and demand are equalized.

Quantities in dummy routes in the optimal solution are not shipped and serve to indicate which supplier will hold the excess supply, and how much, or which destination will not receive its total demand, and how much it will be short.

A Network Diagram of a Transshipment Problem

Transshipment Problem Example:

The manager of Harleys Sand and Gravel Pit has decided to utilize two intermediate nodes as transshipment points ( warehouses) for temporary storage of material.
Cost of Shipping One Unit from the Farms to Warehouses

Cost of Shipping One Unit from the Warehouses to Projects

A Network Diagram of the Transshipment Example

Let us solve it in excel

Remember:1. Supply at farm= Qty transported from farm 2. Demand at project = Qty received at project 3. Storage in the warehouses are not permitted

Exercise:
Problem number D1, Problem set D, OPRH course pack Problem number 16, Page 315, Text Book, Ozgur

Mitsubishi Aircraft Company (MAC)*

MAC builds planes for various companies around the world. The last stage in the production process is to produce the jet engines and then to install them (a fast process) in a completed airplane frame. The company has been working under some contracts to deliver a considerable number of airplanes in the near future, and the production of these jet engines for these planes must now be scheduled for next four months. To meet the dates of delivery the company must supply engines in the quantities mentioned in table 1. Thus the cumulative number of engines produced at the end of months 1,2,3 and 4 must be at least equal to 10,25,50 and 70 respectively. The resulting monthly difference in the max no. that can be produced and the cost is also provided in table 1.
*Adopted from Introduction to Operations Research, Hillier et al, 9e, TMH

Mitsubishi Aircraft Company (MAC)

Because of the variations in the production costs it may well be worthwhile to produce some of the engines a month or more before they are scheduled for installation, and this possibilities are considered. The drawback is that these engines must be stored until the scheduled installation @ $15k per month per engine (refer to Table 1). The production manager wants a schedule developed for the no. of engines to be produced in each of the 4 months so that the total of the production and storage costs will be minimized.
Month 1 2 3 4 Schedule installations 10 15 25 20 Max Production 25 35 30 10 Unit cost of production (M$) 1.08 1.11 1.10 1.13 Unit cost of storage (M$) 0.015 0.015 0.015

Next session.

Example of Assignment Problem

A manager has prepared a table that shows the cost of performing each of five jobs by each of five employees (see Table in next slide). According to this table, job 1 will cost Rs.1500 if done by Raman, Rs.2000 if it is done by Shama, and so on. The manager has stated that his goal is to develop a set of job assignments that will minimize the total cost of getting all four jobs done. It is further required that the jobs be performed simultaneously, thus requiring one job being assigned to each employee. In the past, to find the minimum-cost set of assignments, the manager has resorted to listing all of the different possible assignments (i.e., complete enumeration) for small problems such as this one. But for larger problems, the manager simply guesses because there are too many possibilities to try to list them. For example, with a 5X5 table, there are 5! = 120 different possibilities; but with, say, a 7X7 table, there are 7! = 5,040 possibilities.

Numerical Example for the Assignment Problem ( cost in 00 rupees)

EMPLOYEE RAMAN 1 2 JOB 3 15 12 14 SHAMA 20 17 15 ABDULLA 18 16 19 STEPHEN 24 15 17 PANKAJ 19 14 18

4
5

11
13

14
16

12
17

13
18

15
16

\\192.168.254.3\faculty\debmallyac\OPRH 2013\Assignment problem.xlsx Exercise: Ozgur, Page 319, Q. 29

Q1. What if Raman is found not suitable for job 5? What about the extra cost of new assignment?

Q2. What if Shama is found not suitable for job 3? What about the extra cost of new assignment? Q3. What if Stephen is not ready to do job 4 at the old price? What amount of increase can be allowed without increasing the total cost?