Transportation and Transshipment Models Chapter 11 Supplement Transportation and Transshipment Models Russell and Taylor Operations and Supply Chain Management, 8th Edition

Just how do you make decisions? Emotional direction Intuition Analytic thinking Are you an intuit, an analytic, what??? How many of you use models to make decisions??

Problems Arise whenever there is a perceived difference between what is desired and what is in actuality. Problems serve as motivators for doing something Problems lead to decisions 42

Problem Problem MS Model Mental Model Mental Model Action Action Decision Decision Action Action

Model Classification Criteria Purpose Perspective Use the perspective of the targeted decision-maker Degree of Abstraction Content and Form Decision Environment {This is what you should start any modeling facilitation meeting with}

Purpose Planning Forecasting Training Behavioral research

Perspective Descriptive Prescriptive “Telling it like it is” Most simulation models are of this type Prescriptive “Telling it like it should be” Most optimization models are of this type

Degree of Abstraction Isomorphic One-to-one Homomorphic One-to-many

Copyright 2006 John Wiley & Sons, Inc. Content and Form verbal descriptions mathematical constructs simulations mental models physical prototypes Copyright 2006 John Wiley & Sons, Inc.

Copyright 2006 John Wiley & Sons, Inc. Decision Environment Decision Making Under Certainty TOOL: all of mathematical programming Decision Making under Risk and Uncertainty TOOL: Decision analysis--tables, trees, Bayesian revision Decision Making Under Change and Complexity TOOL: Structural models, simulation models Copyright 2006 John Wiley & Sons, Inc.

Mathematical Programming Linear programming Integer linear programming some or all of the variables are integer variables Network programming (produces all integer solutions) Nonlinear programming Dynamic programming Goal programming The list goes on and on Geometric Programming Copyright 2006 John Wiley & Sons, Inc.

A Model of this class What would we include in it?

Management Science Models A QUANTITATIVE REPRESENTATION OF A PROCESS THAT CONSISTS OF THOSE COMPONENTS THAT ARE SIGNIFICANT FOR THE PURPOSE BEING CONSIDERED Copyright 2006 John Wiley & Sons, Inc.

Mathematical programming models covered in Ch 11, Supplement Transportation Model Transshipment Model Not included are: Shortest Route Minimal Spanning Tree Maximal flow Assignment problem many others Copyright 2006 John Wiley & Sons, Inc.

Lecture Outline Transportation Model – Slide 3 Transshipment Model – Slide 12 © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

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 Excel’s Solver © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Transportation Method Example © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Transportation Model © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Problem Formulation with Excel © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Solver Parameters © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Solution © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Modified Problem Solution © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Modified Problem Settings © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

OM Tools © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Transshipment Model © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Transshipment Model Solution =SUM(B6:B7) =SUM(B6:D6) =SUM(C13:C15) =SUM(C13:E13) =C8-F14 = B8-F13, the amount shipped into KC equals the amount shipped out © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Transshipment Settings © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

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