18/11/2019

Transshipment
Problem  A generalization of the transportation problem which allows shipments from
any source to any destination to first go through intermediate (transient)
transfer points.
 Network Representation

Industrial Engineering Department

Institut Teknologi Sepuluh Nopember
Surabaya

Quantitative Modeling & Industrial Policy Analysis (Q-Lab)

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Thomas Industries and Washburn Corporation supply three

firms (Zrox, Hewes, Rockwright) with customized shelving for
its offices. They both order shelving from the same two
manufacturers, Arnold Manufacturers and Supershelf, Inc.

Currently weekly demands by the users are 50 for Zrox, 60

for Hewes, and 40 for Rockwright. Both Arnold and
Supershelf can supply at most 75 units to its customers.

Additional data is shown on the next slide.

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 Network Representation
Because of long standing contracts based on past orders, unit
Zrox 50
costs from the manufacturers to the suppliers are:

Thomas Washburn 5 1
75 Arnold Thomas 5
Arnold 5 8
8 8
Supershelf 7 4
Hewes 60

The cost to install the shelving at the various locations are: 7

3 4
Super Wash-
Zrox Hewes Rockwright 75 Shelf Burn
4 4
Thomas 1 5 8 Rock-
Washburn 3 4 4 Wright 40

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 Linear Programming Formulation  Objective Function Defined

◦ Decision Variables Defined
xij = amount shipped from manufacturer i to supplier j ◦ Minimize Overall Shipping Costs:
xjk = amount shipped from supplier j to customer k Min 5x13 + 8x14 +
where i = 1 (Arnold), 2 (Supershelf) 7x23 + 4x24 +
j = 3 (Thomas), 4 (Washburn) 1x35 + 5x36 + 8x37 +
k = 5 (Zrox), 6 (Hewes), 7 (Rockwright) 3x45 + 4x46 + 4x47

 Note: A common mistake in Formulation is to define the

decision variable as Xijk -- implying that you have 2x2x3 =
12 decisions, when in fact, you only have
(2x2) + (2x3) = 10 decisions.

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 each node of the network with both input and output arcs
 Constraints Defined
(T1,T2,D1,D2) acts as both a source and a destination
and is referred to as a transshipment node
Amount Out of Arnold: x13 + x14 < 75
 The remaining nodes are either pure supply nodes (P1,
Amount Out of Supershelf: x23 + x24 < 75
P2) or pure demand nodes (D3)
Amount Through Thomas: x13 + x23 - x35 - x36 - x37 = 0
Amount Through Washburn: x14 + x24 - x45 - x46 - x47 = 0
Amount Into Zrox: x35 + x45 = 50
There are:
Amount Into Hewes: x36 + x46 = 60 - 6 sources
Amount Into Rockwright: x37 + x47 = 40 (P1,P2,T1,T2,D1,D2)
- 5 destinations
(T1,T2,D1,D2,D3)
Non-negativity of Variables: xij > 0, for all i and j.

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 Formulate This Problem D1 800

3 8
1000 P1 T1 5

4 6

7 D2 900

4
2 3
1200 P2 T2
5 9
D3 500

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Widgetco manufactures widgets

at two factories, one in Memphis
and one in Denver. The Memphis
factory can produce as many as
150 widgets per day, and the
Denver factory can produce as
many as 200 widgets per day.
Widgets are shipped by air to
customers in Los Angeles and
Boston. The customers in each city
require 130 widgets per day.
Widgetco wants to minimize the
total cost of shipping the
required widgets to its customers.

Buffer Amount = Total Supply

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