Lecture Operations management: Creating value along the supply chain (Canadian edition) - Chapter 11S

OPERATIONS MANAGEMENT:
Creating Value Along the Supply Chain,
Canadian Edition
Robert S. Russell, Bernard W. Taylor III, Ignacio Castillo, Navneet Vidyarthi

CHAPTER 11
SUPPLEMENT
Transportation and Transshipment
Models

Supplement 11-1


Lecture Outline

—Transportation Model
—Trans-Shipment Model

Supplement 11-2


Transportation Model
—A model formulated for a class of problems with

the following characteristics

—items are transported from a number of sources to a

number of destinations at minimum cost
—each source supplies a fixed number of units
—each destination has a fixed demand for units

—Solution Methods
—stepping-stone
—modified distribution
—Excel’s Solver

Supplement 11-3


Transportation Method Example

Supplement 11-4


Transportation Method

Supplement 11-5


Problem Formulation with Excel

1. Click on “Data”

2. Solver

=C5+D5+E5

=E5+E6+E7
Total cost formula for all
potato shipments in cell C10

Supplement 11-6


Solver Parameters
Total cost

Click to “solve”

Decision variables
representing
shipment routes
Constraints specifying
that supply at the
distribution centers
equals demand
at the plants
Click on “Options”
to activate “Assume
Linear Models”

Supplement 11-7


Solution

Supplement 11-8


Modified Problem Solution
High cost prohibits

route C5

Column “H” added
for excess supply

Supplement 11-9


Modified Problem Settings

Constraint changed
to ≤ to reflect
supply > demand

Supplement 11-10


OM Tools

Supplement 11-11


Trans-Shipment Model

Supplement 11-12


Trans-Shipment Model Solution

=SUM(B6:B7)

=SUM(B6:D6)

=SUM(C13:E13)
=SUM(C13:C15)

=C8-F14

= B8-F13, the amount shipped
into KC equals the amount
shipped out
Supplement 11-13


Trans-Shipment Settings

Transshipment constraints

Supplement 11-14


COPYRIGHT
COPYRIGHT
Copyright © 2014 John Wiley & Sons Canada, Ltd.
All rights reserved. Reproduction or translation of
this work beyond that permitted by Access Copyright
(The Canadian Copyright Licensing Agency) is
unlawful. Requests for further information should be
addressed to the Permissions Department, John
Wiley & Sons Canada, Ltd. The purchaser may make

back-up copies for his or her own use only and not
for distribution or resale. The author and the
publisher assume no responsibility for errors,
omissions, or damages caused by the use of these
programs or from the use of the information
contained herein.