Chapter 5 – Transportation Model

- finding the minimum cost/maximum profit for distributing homogeneous units of a product from several points of supply and demand - what are the cheapest routes to send a certain no. of products from suppliers to destinations

origin

destination

- no. of sources and capacity to supply to distribute - no. of destinations and their demand - per unit cost of shipping the products from a certain source to destination

- similar items - same shipping cost per unit regardless of no. - only one route or mode used between each origin and destination

represent routes where no quantity is shipped between source and destination

stone squares

- 1941 -.American mathematician/physicist - The Distribution of a Product from Several Sources to Numerous Localities

- 1910 -1985 - Dutch-American mathematician/economist - Optimum Utilization of the Transportation System

- 1917 - 1992 - American operations researchers - 1953, Stepping Stone Method (SSM)

- 1914 - 2012 - American operations researchers - 1953, Stepping Stone Method (SSM)

- 1955

allocating units to the upper left-hand corner and ends in the lower right corner

- provides good but not optimal solution - allocates to the least cost/highest profit cell

- considers the penalty cost of not using the cheapest available route - near optimal/optimal starting solution

tracing closed paths from each unused squares through stone squares...

determining the per-unit cost/profit change associated with assigning flow to an unused square

increase/deacrease in a total cost or profit that would result from reallocating one unit to an unused square