TRANSSHIPMENT PROBLEM

PRESENTED BY:

DANIELA ARDILA

KELLYMUÑOZ

PRESENTED TO

JUAN ESTEBAN MARTINEZ

GRANCOLOMBIAN POLYTECHNIC

Operations Research
 MEDELLÍN, ANTIOQUIA

2016

Introduction

The transportation problem was one of the first problems that was
formulated as a problem of linear programming. The first
The written reference known of this problem dates back to
1781, when the French mathematician Gaspard Monge describes the
problem of the construction and supply of fortifications
military for Napoleon's armies (Ramón, 1999). Starting from
at that moment the transport problem became one of the
major study problems in the field of research
operations (García, 2003), and its application is found not only in
the military field, but also in the field of production,
distribution, finance, etc.

The transshipment problem can be solved with the simplex algorithm.

using one of the commercial programming software programs
linear with which the problem is formulated; it can also be attempted the
optimization of it using the Transportation Algorithm, which is a
simplified simplex, making the conversion to the usual table, using
existence artifacts of units in all nodes. Another method is
build the distribution network and determine the minimum cost from the nodes
supply to the other nodes and consider such costs as unit costs in
the respective cells of the transport table (UPIICSA). Reference
incomplete

The general objective of this project is to use concepts to develop

capabilities that allow formular, plantear y solucionar problemas de
linear programming such as the transshipment problem with the help of
SOLVER and GAMS to assist in the decision-making process; in this
specific case, it would be to determine the quantities of bodies to be sent from
each origin to each destination passing through some assembly points for
satisfy all demands without exceeding the limits set by the supply of
way to minimize the total distribution cost of the Carrocerías company
ElToro Rojo. Figure 1 shows an example of a network diagram.
Project Description Problem

In this case, a transshipment problem arises for the Carrocerías Company.

ElToro Rojo, which is based on producing bodies in three factories, which
they have a production limit, these bodies are sent to four
cities passing through primary assemblers and then to some assemblers
secondary schools. The transportation and transshipment process is described in figure 2.

In general, we can assume that we have origins (plants

of production) that must supply destinations (centers of
consumption) a certain product. The supply capacity of each origin i
(i=1,…m) is toi(aiwhile the demand for each destination j (j=1,…n) is
bj(bjThe problem then consists of determining how many units (xij)
Product must be shipped from origin i to destination j, from
way to minimize the shipping cost, ensuring that the
the demand for the destinations is fully met.

In this sense, the purpose is to help decide on the distribution.

the optimal transportation of a body manufacturing company for
buses, which has three production plants, and four
subprocesses of assembly and finishing warehouses. This company
wants to determine what the distribution of its bodies should be
such that the costs associated with said transportation are the lowest, and
ensuring that the demand of four cities is met that
They are waiting for their products.

The problem of the "Carrocerías el Toro Rojo" factory has been considered.
of transshipment type basically because of a transshipment problem
it consists of minimizing the total transportation cost of a certain product
from different origins to destinations, satisfying your
demand, without exceeding the available supply at each origin (Begoña,
2009).

Fig. ura2. Network Diagram.

Model formulation

1. Decision variables:

XijUnits sent from origin i to destination j.

2. Problem data:

CijTransportation costs of a unit from origin i to destination j.

Objective Function: Minimize total transportation costs.

F.O. Min Z = 800X14+ 900X15+ 600X24+ 1300X25+ 700X35+ 900X46+

600X47+ 1100X56
+ 500X57+ 1800X68+ 1900X69+ 1400X6-10 + 400X79+
2050X7-10 + 800X7-11

[Link].

3.1 Capacity of the plants.

X14+ X15≤ 190 Envigado plant capacity

X24+ X25≤ 130 Plant capacity Tunja
X35 <= 90 Palmira plant capacity
 3.2 Inventory in warehouses (No warehouse has inventories in
process)

What arrives at warehouse 4 (Pereira) is equal to

X14+ X24X26X27= 0
what comes out
X15+ X25+ X35-X56- What arrives at warehouse 5 (Armenia) is the same.
X57=0 to what comes out
X46+ X56X68X69X6-10 What arrives at warehouse 6 (Duitama) is the same.
to what comes out
X47+ X57X79- X7-10- X7-11 What arrives at warehouse 6 (Cartago) is equal to
=0 what comes out.

3.3 Customer demand

X68 ≥ 110 Demand Bogotá

X69+ X79 ≥ 75 Cali Demand
X69-10+ X7-10 ≥ 65 Demand
Bucaramanga
X7-11 ≥ 90 Demand Medellín

For this case, we take customer demands as greater than or equal to, since
that the total supply exceeds the required demand.

No negativity.
Xij≥ 0 for i = 1,2,3,4,5,6,7; j = 4,5,6,7,8,9,10,11

Feasibility analysis

Capacity vs Demand Table

TOTAL CAPACITIES PLANTS CLIENT DEMAND

PLANT CAPACITY CLIENT DEMAND
Bogotá 110
Envigado 190 Cali 75
Tunja 130 Bucaramanga 65
Palmira 90 Medellín 90
TOTAL 410 TOTAL 340

As seen in table 1, we are facing a transportation problem.

balanced, this happens when the total supply is different from the demand
total. In our case, the total supply exceeds the demand, which means that the
the problem will have an optimal solution, however it is necessary to establish what
dealing with the oversupply, this means whether the final destinations are
willing to accept the excess supply, or on the contrary, it should
to think about reducing the production capacity of the plants. Or to seek a
new client

Results with SOLVER:

For the previously presented problem, it was decided to use Excel's SOLVER.
in order to model the problem and find an optimal solution if
this exists. SOLVER analyzes the problem using the SIMPLEX algorithm.
What is being sought is to be able to evaluate the cost of shipping each
one of the units that leaves a respective origin and arrives at its
determined destination. What LaF.O seeks is to minimize costs of
transshipment give an analysis of the quantity of product it has since
the supply is greater than the demand and finding the best management of
the leftover merchandise.

In this program, what we do is insert source values and

destination so as to know what the total cost is from start to finish.

As part of the project, a model of the problem was formulated in Microsoft.

Excel 2013. Subsequently, with the help of the SOLVER add-in, it was determined
the optimal distribution for the buses, which minimizes total costs of
shipments. The spreadsheet is attached. The following tables show the
relevant results.

Table # 1. Bodies to be sent from each factory to each

assembly warehouse
Factories Assembly warehouses
Pereira Armenia
Envigado 85 0
Tunja 0 75
Palmira 90 0

Table # 2. Bodies to be sent from each assembly warehouse to

 each finished warehouse
Warehouses of Finished warehouses
ensemble Duitama Cartago
Pereira 175 0
Armenia 0 175

Table # 3. Bodies to be sent from each finished warehouse to

each city
Warehouses of End customers - Cities
ensemble Bogotá Cali Bucarama Medellín
of
Duitama 110 0 65 90
Cartago 0 75 0 0

With the solution found through SOLVER, we guarantee that it is covered

total demand of the cities, compliance with the restrictions of no
to have units in process in the different assembly warehouses and
finished. Finally, the total cost of the distribution of the bodies is:

Total transportation cost: $688,500

Analysis of results: The Envigado factory has a availability

of 190 bodies of which only 120 bodies were required,
this means that the company has a surplus of 70 chassis, that is to say
that the supply they are handling right now is greater than the demand.

Analysis of results in SOLVER

Barranquilla Requirement: The city of Barranquilla implemented the

mass transportation system and requests the purchase of 70 bodies,
requirement that will be covered by Envigado which has a surplus of
over 70 bodies, which will be sent to the finished warehouse
Duitama and subsequently delivered to the city of Barranquilla, at a cost
From $1200, this new requirement generated new changes such as:

. The number of car bodies sent from Envigado to Armenia

it went from 85 to 155 and from Armenia to Duitama it went from 175 to
245, so that the new requirement for bodies
will arrive at its final destination, the shipping costs were modified for the
cities involved, as the amount to be sent was increasing.

. The increase in the original objective function, increase of

$224,000, since the initial objective function yielded a result of
$928,000 and after the changes made as a result of the
 new specifications and requirements, the objective function gave
a result of $1,152,000.

Facatativa Purchase: Regarding whether it is feasible or not to change the 4 warehouses

of assembly currently used by only one in the city of Facatativá;
recommend based on the analyses conducted and the results generated
in SOLVER the purchase of the assembler warehouse in Facatativá, since
comparing the initial objective function ($928,000) that had the 4
warehouses (Pereira, Armenia, Duitama, Cartago), with the new objective function
(731.500) which has only 1 warehouse presents a decrease in
$196,500.

One of the requirements of the company Carrocerías el Toro Rojo was that if the
transshipment costs plus the credit balance were lower than that of the model
Initially, the decision would be made to work only with Facatativá, a requirement that
it is fulfilled as explained earlier.

Minimum value Barranquilla: The minimum value that should be charged to

Barranquilla for providing them with the bodies and in turn that it complies with the
costs for the next year that amount to $800,000, plus the $50,000 that he has
The favor is $93, because it is the only value that would meet the requirements, if it
it would give a higher value exceeding the $850,000 set as the limit of
costs for the company and would violate the established requirements by the
same.

Analysis of results in GAMS

In the data obtained from the GAMS program, it can be identified that we
generate a final result of 928,000, which if compared with the generated
in SOLVER, we realize that it is the same result of the objective function

Attached are tables with results in SOLVER and the model solved in GAMS.

References
Begoña,V.(2009). Modelos operativos de gestión,1(Septiembre),
225.

Interdisciplinary Professional Unit of Engineering and Social Sciences

And Administrative (UPIICSA) of the National Polytechnic Institute
(IPN)

García, J. G. H. and M. J. (2003). Model of solution to the problem of

transport of multiple products with multi-attribute (Vol. 3, pp.
43–59).

Ramon, S. G. (1999). Transportation problems, 1(April), 149–199.