1. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-1 Chapter 8 Supplement The Transportation Model

2. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-2 The Transportation Problem D (demand) D (demand) D (demand) D (demand) S (supply) S (supply) S (supply) Figure 8S-1

3. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-3 Requirements for Transportation Model List of origins and each one’s capacity List of destinations and each one’s demand Unit cost of shipping

4. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-4 A Transportation Table Warehouse 47 7 1 100 12 3 8 8 200 8 1016 5 150 450 8090120160 ABCD 1 2 3 Factory Factory 1 can supply 100 units per period Total supply capacity per period Total demand per period Demand Warehouse B can use 90 units per period Table 8S-1

5. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-5 Transportation Model Assumptions Items to be shipped are homogeneous Shipping cost per unit is the same Only one route between origin and destination

6. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-6 Steps in the Process Obtain an initial solution –Intuitive approach Test the solution for optimality –Stepping-stone approach Improve suboptimal solutions

7. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-7 Special Problems Unequal supply and demand Dummy: Imaginary number added equal to the difference between supply and demand when these are unequal Degeneracy: The condition of too few completed cells to allow all necessary paths to be constructed

8. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-8 Summary of Procedure Make certain that supply and demand are equal Develop an initial solution using intuitive, low-cost approach Check that completed cells = R+C-1 Evaluate each empty cell Repeat until all cells are zero or positive

9. SUPPLEMENT TO CHAPTER EIGHT Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 THE TRANSPORTATION MODEL 8S-9 Excel Template Figure 8S-2