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

2. 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??

3. 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

4. Problem Problem MS Model Mental Model Mental Model Action Action
Decision
Decision
Action
Action

5. 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}

6. Purpose
Planning
Forecasting
Training
Behavioral research

7. 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

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

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

10. 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.

11. 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.

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

13. 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.

14. 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.

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

16. 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

17. Transportation Method Example
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18. Transportation Model
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19. Problem Formulation with Excel
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20. Solver Parameters
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21. Solution
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22. Modified Problem Solution
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23. Modified Problem Settings
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24. OM Tools
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25. Transshipment Model
© 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

26. 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

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

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