Transportation Problem
Case
Texaco Corp. Site Selection Problem: Sec. 5.5 Hillier
and Hillier
Texaco produces most of its oil in its own fields and import the
rest from middle east.
Texaco has several oil fields, several refineries, and several
distribution centers.
Texaco is planning to add a new refinery. There are several
candidate locations for this new refinery.
There are 3 important factors
1. Distance from row material locations (Transportation cost).
2. Distance from distribution locations (Transportation cost). .
3. Production cost
Transportation Problem and Related Topics
Ardavan Asef-Vaziri
June-2013
2
From Plants to Existing and Future Warehouses
Three manufacturing Plants
Three Warehouse
Capacity, and Distribution costs are given below
Warehouse 1 Warehouse 2 Warehouse 3 Plant Capacity
Plant 1
Plant 2
Plant 3
Plant 4
2
4
5
2
4
5
7
2
5
2
3
5
80
60
100
120
Warehouse Capacity
100
60
80
Capacity of the warehouses are nor enogh. Three candidate locations for one additional warehouse.
Capacity, and Distribution costs are given below
Candidate 1 Candidate 2 Candidate 3
Plant 1
Plant 2
Plant 3
Plant 4
Candidate Capacity
3
1
4
4
1
3
5
3
3
4
6
4
120
120
120
Transportation Problem and Related Topics
Ardavan Asef-Vaziri
June-2013
3
From Warehouses to Distribution Centers
Four distribution centers
The distance from warehouse to distribution center given below
DC1
DC2
DC3
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 1
Candidate 2
Candidate 3
5
6
7
8
5
4
2
4
8
6
4
3
6
3
4
3
3
1
8
5
3
2
6
5
100
80
80
Operations cost at each plant is given below
Operations Cost
620
570
530
Which candidate warehouse leads to the minimal system costs
Transportation Problem and Related Topics
Ardavan Asef-Vaziri
DC4
100
60
80
120
120
120
100
June-2013
4
From Plants To Candidate Warehouse 1
Warehouse 1 Warehouse 2 Warehouse 3 Candidate 1
Plant 1
2
4
5
Plant 2
4
5
2
Plant 3
5
7
3
Plant 4
2
2
5
3
1
4
4
Warehouse 1 Warehouse 2 Warehouse 3 Candidate 1
Plant 1
40
0
0
Plant 2
0
0
0
Plant 3
0
0
80
Plant 4
60
60
0
100
≥
60
≥
80
≥
100
60
80
Capacity
Transportation Problem and Related Topics
40
60
20
0
120
≥
120
Ardavan Asef-Vaziri
June-2013
Supply
80
60
100
120
≤
≤
≤
≤
80
60
100
120
820
5
From Plants To Candidate Warehouse 2
Warehouse 1 Warehouse 2 Warehouse 3 Candidate 2
Plant 1
2
4
5
Plant 2
4
5
2
Plant 3
5
7
3
Plant 4
2
2
5
1
3
5
3
Warehouse 1 Warehouse 2 Warehouse 3 Candidate 2
Plant 1
20
0
0
Plant 2
0
0
0
Plant 3
20
0
80
Plant 4
60
60
0
100
≥
60
≥
80
≥
100
60
80
Capacity
Transportation Problem and Related Topics
60
60
0
0
120
≥
120
Ardavan Asef-Vaziri
June-2013
Supply
80
60
100
120
≤
≤
≤
≤
80
60
100
120
860
6
From Plants To Candidate Warehouse 3
Warehouse 1 Warehouse 2 Warehouse 3 Candidate 3
Plant 1
2
4
5
Plant 2
4
5
2
Plant 3
5
7
3
Plant 4
2
2
5
3
4
6
4
Warehouse 1 Warehouse 2 Warehouse 3 Candidate 3
Plant 1
20
0
0
Plant 2
0
0
0
Plant 3
20
0
80
Plant 4
60
60
0
100
≥
60
≥
80
≥
100
60
80
Capacity
Transportation Problem and Related Topics
60
60
0
0
120
≥
120
Ardavan Asef-Vaziri
Supply
80
60
100
120
≤
≤
≤
≤
80
60
100
120
1040
June-2013
7
From Existing Warehouses and Candidate 1 to DCs
DC1
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 1
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 1
Demand
DC2
DC3
DC4
5
2
6
8
6
4
3
5
7
8
4
3
8
6
3
2
DC1
DC2
DC3
DC4
20
80
0
60
0
0
20
0
0
0
0
80
100
≥
100
80
≥
80
80
≥
80
0
0
60
40
100
≥
100
Transportation Problem and Related Topics
Ardavan Asef-Vaziri
June-2013
Supply
100
60
80
120
≤
≤
≤
≤
100
60
80
120
1260
8
From Existing Warehouses and Candidate 2 to DCs
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 2
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 2
Demand
DC1
DC2
DC3
DC4
5
2
6
8
6
4
3
5
7
8
4
3
5
4
3
6
DC1
DC2
DC3
DC4
20
80
0
0
0
40
0
0
0
80
0
40
100
≥
100
80
≥
80
80
≥
80
0
20
80
0
100
≥
100
Transportation Problem and Related Topics
Ardavan Asef-Vaziri
June-2013
Supply
100
60
80
120
≤
≤
≤
≤
100
60
80
120
1240
9
From Existing Warehouses and Candidate 3 to DCs
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 3
Warehouse 1
Warehouse 2
Warehouse 3
Candidate 3
Demand
DC1
DC2
DC3
DC4
5
2
6
8
6
4
3
5
7
8
4
3
4
3
1
5
DC1
DC2
DC3
DC4
20
80
0
0
0
40
0
0
0
80
0
40
100
≥
100
80
≥
80
80
≥
80
0
20
80
0
100
≥
100
Transportation Problem and Related Topics
Ardavan Asef-Vaziri
June-2013
Supply
100
60
80
120
≤
≤
≤
≤
100
60
80
120
1080
10
Total System Costs
From Plant to Warehouse costs
From Warehouse to DC costs
Productin Costs
Total
Transportation Problem and Related Topics
Candidate 1 Candidate 2 Candidate 3
820
860
1040
1260
1240
1080
620
570
530
2700
2670
2650
Ardavan Asef-Vaziri
June-2013
11