Multi-Commodity Flow Joe Monahan Josh Onuska

Back Story N.S. - Largest rail shipper of automobiles Scope – Exclusive deal with Ford (1.9 million sold in 2010) – Facilities operating 24 hours / 7 days – East Coast distribution Risks – Terrorism or war – Labor union strikes – Severe weather – Derailing / rail failure

Why Multi-Commodity?

Nodes and Arcs Nodes – 5 assembly plants – 4 mixing centers – 25 distribution facilities Arcs – 22,000 miles of rail – 30,000 Ford vehicles shipped weekly – Capacity is more than sufficient to handle demand

N.S. Rail System

Automotive Shipping Facilities

Assembly Plants & Mixing Centers

Assembly Plants Location Supply Model Cleveland 5,000Econoline Van Chicago 5,000Taurus, Explorer Detroit 10,000Mustang, F-150, Focus Kansas City 5,000F-150, Escape, Contour Louisville 5,000SuperDuty,Expedition,Navigator

Containerization

Mixing Centers Location Capacity Region Chicago5938 NE/NW Louisville 3510 SE/E Toledo 2800 NE Kansas City 2538 NW/MW

Chicago Mixing Center

Node Overlay

Model Multi-commodity: Sorted (5) / Mixed Supply/Demand Driven – Supply = 30,000 – Demand = 30,000 – 60,000 units in motion – Accounts for 75% of Ford’s monthly U.S. sales Network Risks – Arcs unusable – Weather – Accident – Unions – Bridges

Cleveland(Avon Lake) Chicago Detroit (Dearborn/Wayne) Louisville Kansas City Toledo Chicago Louisville Kansas City Mixed Source Mixed Sink Assembly Plants Mixing Stations Assembly Sinks -30,000 30, D C L K A

Network Characteristics Network Goal – Meeting demand at the minimum cost – DNM: Current vs Future Profit loss Measure of effectiveness – Average cost to deliver vehicle to distribution facility – MOE = Total Cost / # of cars shipped – Total Cost = (.25)(Rail Miles) + (DNM)($2700)

Assumptions 30,000 cars moved per week (From Mid-West Plants) – 20,000 to East Coast / 10,000 to West Coast $0.25 per rail mile for each car moved No cost incurred for movement between co- located facilities DNM results in lost sales

Assembly Plants & Mixing Centers

Assembly Plants to Mixing Facilities Mixing Facility Assembly Plant

Mixing Facilities to Distribution Sites

Initial Results Base line – zero attacks: – Total Mileage: 25,511,500 Rail miles – Total Cost: $6,377, – Cost per vehicle:$212.00

Results w/ Interdiction 1 Interdiction – 23,219,000 Miles; $11,204,750; $386.37/car 5 Interdictions – 14,460,000 Miles; $49,515,000; $2,303.02/car 10 Interdictions – 8,010,000 Miles; $88,402,500; $6,314.46/car 17 Interdictions – 5,010,000 Miles; $139,600,500; $31,872.60/car

Impacts of Interdiction

Resiliency Curve Cost over profit margin Attack Saturation

Charts: Cost of Interdiction Map of varying paths after each interdiction And/or histograms of cost at each interdiction

Resiliency How do we make the system more robust and resistant to catastrophic collapse? – Add arcs to isolated nodes – Back up plan (trucks) Can we move nodes around (mixing stations or distribution points) to get a more efficient solution? – Moving or even eliminating mixing stations improves performance.

Optimal Attack Histogram

Frequency of Attack Locations

Additional Analysis Option to eliminate one of the four mixing facilities: – Bypassed Chicago – $194,375 in weekly savings

Analysis Limitations Lots of assumptions Changes in Consumer Demand by geographic location

Conclusion What did we learn from the model? – Hub and spoke affect How does the model react to interdiction? – Greatest impact from interdiction seen in DNM Critical vulnerabilities? – Isolated nodes, close proximity of Assm. Plants How can we improve the system to lower cost? – Eliminate Mixing Facility Diminishing returns after 17 attacks

Questions