The Transportation Model Supplement 8 The Transportation Model
Transportation Problem Involves finding the lowest-cost plan for distributing stocks of goods or supplies from multiple origins to multiple destinations that demand the goods. Demand Supply
Transportation Model: Applications The transportation model has numerous applications: Location decisions Compare location alternatives in terms of their impact cost on the total distribution costs for the system Involves working through a separate model for each location being considered Production planning Capacity planning Transshipment
Transportation Problem Shipping (supply) points Any place from which good are sent Factories Warehouses Departments Destinations Any point that receives goods
Model: Information Requirements A list of the origins and each one’s capacity or supply quantity per period A list of the destinations and each one’s demand per period The unit cost of shipping items from each origin to each destination
Model: Assumptions Transportation model assumptions The items to be shipped are homogeneous Shipping cost per unit is the same regardless of the number of units shipped There is only one route or mode of transportation being used between each origin and destination
Transportation Table
Transportation Table
Transportation Problem: Formulation
Transportation: Computer Solution Transportation problems can be solved manually in a straightforward manner Except for very small problems, solving the problem manually can be very time consuming For medium to large problems, computer solution techniques are more practical A variety of software packages are available for solving the transportation model Some require formulating the problem as a general LP model Others allow data entry in a more simple, tabular format
Transportation Problem: Excel Template
F1 10 D1 100 220 5 8 6 F2 7 D2 200 180 8 8 10 D3 F3 200 300 8