University of Santiago de Chile

Faculty of Engineering
Department of Mining Engineering
Optimization

Workshop 2 Optimization

Teacher: Sebastián Muñoz G

Autor: Miguel Cáceres C.
Fecha de entrega: 02/08/2019
 Summary
In the present report, 2 optimization problems are developed, the first belonging to the
maximum flow type and the second a programming problem, both problems in the context
to assume a consulting role, in order to provide recommendations for decision making
the companies that request these services.

First, a pipe network is analyzed, determining that it can satisfy the

demanda de una de las dos terminales y se aporta 50.000 barriles en la segunda terminal 8. Como
A critical point is observed in arc 3-5 as it is a limitation since it does not allow transporting 150,000.
due to the size of the pipe. Given the above, it is recommended to acquire externally
400,000 to meet the demand of terminal 8.

In the second case, it addresses the concern of a company to obtain a numerical model that
provide information regarding the amount of tons of sugar and salt to be transported. After resolving
el modelo se tiene como resultado 13.320 euros y la distribución de la mercancía queda establecida
in the following way:
Tons Tons Tons
Compartments
of salt of sugar Totals by deposit
Forward 5 8.33 13.33
Central 6 7.33 13.33
Back 6 7.33 13.33
Totals 17 22.99 39,99

Finally, it is indicated that given the characteristics of the merchandise, it is not possible to use the entirety.
of the available volume on the ship. However, it is recommended that given the cost it entails, not
complete the capacity of the central compartment, see if it is possible to increase the restriction of the
40 maximum tons of transport.

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Content

1 Problem 1 .................................................................................................................................. 4
1.1 Problem Resolution..................................................................................................... 4
1.1.1 Refinery 1 ................................................................................................................... 4
1.1.2 Refinery 2
1.1.3 Refinery 3 ................................................................................................................... 5
1.1.4 Flow by Pumping Station .................................................................................... 5
1.1.5 Recommendations
2 Problem 2 .................................................................................................................................. 7
2.1 General Objective ................................................................................................................ 7
2.2 Specific objective.............................................................................................................. 7
2.3 Assumptions ............................................................................................................................ 7
2.4 Development of the Problem................................................................. 8
2.4.1 Definition of decision variables........................................................................ 8
2.4.2 Objective function.......................................................................................................... 8
2.4.3 Model restrictions ............................................................................................ 8
2.4.4 Presentation of the model............................................................................................. 9
2.4.5 Resolution of the mathematical model.......................................................................... 10
2.5 Response Condition No. 1 .................................................................................................. 10
2.6 Condition No. 2................................................................................................................... 11
2.6.1 Resolution of the mathematical model......................................................... 12
2.6.2 Response Condition No. 2........................................................................................... 12
2.7 Condition No. 3.................................................................................................................... 13
2.7.1 Resolution of the mathematical model.......................................................................... 14
2.7.2 Response and Recommendations for condition No. 3 ................................................. 14

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Problem 1

Three refineries send their gasoline products to two terminals. The capacities of those are
they estimate at 200,000, 250,000, and 300,000 barrels per day. It is known that the demands at the terminals
is between 400,000 and 450,000 barrels per day. The demand that cannot be met by the refineries
is acquired from other sources. The gasoline product is transported to the terminals via a network of
pipes that are driven by three pumping stations. The figure summarizes the links of the
red along with the capacity in (10xthousands of barrels per day) of each pipeline.
Determine the maximum flow that must pass through each pumping station, identifying which ones they are.
the critical points; in case it cannot meet the demand and it has to be acquired
From other sources, what is the amount they should acquire?

1.1 Problem Resolution

In a preliminary analysis, the required demand at the terminals is being analyzed, which amounts to
corresponds to a total of 850,000 and the capacities of the refineries is 750,000, so it
It is determined that it is not possible to meet the required demand due to a deficit of 100,000.

1.1.1 Refinery 1

First, Refinery No. 1 will be analyzed, which has a capacity of 200,000 of which
they can send entirely to pumping station No. 4, subsequently from this station
100,000 can be sent to terminal 7. The remaining 100,000 are sent to the station of
pumping number 6 to then send it to terminal 7.

In summary, from refinery 1, the flow can be expressed in the following way:

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1-4-7= 100.000
1-4-6-7=100.000
Given the above, a total of 200,000 has been sent from refinery No. 1 to terminal 7.

1.1.2 Refinery 2

As for refinery n°2, it has a capacity of 250,000 of which can be sent in its
totality towards pumping station no. 6, later from this station it can be sent
200,000 towards terminal 7. The remaining 50,000 is transported from pumping station no. to
terminal 8.

In summary, from refinery 2, the flow can be expressed in the following way:
2-6-7=200.000
2-6-8=50.000

Given the above, a total of 200,000 have been sent from refinery number 2 to terminal 7 and to the
Terminal 8 transports 50,000.

1.1.3 Refinery 3

Regarding refinery no. 3, it has a capacity of 300,000 of which given the dimensions of
the pipeline connecting to pumping station No. 5 can only transport 150,000, which
are transported in their entirety to refinery 8, leaving a remainder of 150,000 in the
refinery 3.

In summary from refinery 3, the flow can be expressed in the following way:
3-5-8=150.000

Given the above, a total of 150,000 has been sent from refinery No. 3 to terminal 8.

1.1.4 Flow by Pumping Station

The following table shows the amount of flow that circulates through each pumping station:

Station of
Flow
Pumping
4 200,000
6 350,000
5 150,000

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1.1.5 Recommendations

After conducting the route analysis, it is determined that the demand can be met.
terminal 8 and it manages to contribute 50,000 towards terminal 8.
As a critical point, it is observed that in the 3-5 arc it is a limitation as it does not allow for transportation.
150,000 due to the size of the pipe.

Given the above, it is recommended to acquire 400,000 externally to meet the demand for the
terminal 8.

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2 Problem 2

A shipping company for goods has to manage the transport of salt and
sugar on a ship that has 3 compartments to store this merchandise: front,
central and rear. The front compartment can store up to 6,800 m³, the central up to
8,700 m³, and the rear up to 5,300 m³.
The ship can carry up to 18 tons of salt (with a net profit of 310 euros/ton).
and up to 23 tons of sugar (profit of 350 euros/ton). However, the accumulated load of
both products must be less than 40 tons.
It is known that each ton of salt and sugar occupies a volume of 25 and 30 cubic meters respectively.

Formulate a linear programming problem that provides the quantity and location.
optimal of the goods to be transported.
To keep the ship balanced, the weight of the cargo being transported on the
The central compartment must be at least 50% of the total merchandise transported.
Modify the problem by adding this new information.
If the unused space in the central warehouse costs the company 100 per
Each m³ Modify the problem by adding this new information.

2.1 General Objective

Formulate a linear programming model to determine the optimal quantity and location of
the merchandise to be transported, maximizing the profit.

2.2 Specific objective

Defina claramente variables, función objetivo, restricciones y el modelo matemático.

Solve the model you proposed and provide your comments regarding the model and the
results of the same including its suggestions.

2.3 Assumptions

Only the information provided by the client will be used, so it is decided not to perform.
any type of input data estimation for the model.
It is considered that each compartment is designed to be able to transport both.
substances in each of the compartments of the cargo ship.
Condition 3 indicates a cost of 100 associated with unused space. However, it does not
the currency is indicated, so given the context of the problem it will be assumed that it is
euros.

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2.4 Development of the Problem

For the development of the problem, it is necessary to define the variables, objective function, constraints, and
mathematical model that provides the required information, the above is summarized in the
next steps.

2.4.1 Definition of decision variables

Firstly, the decision variables that are involved in the formation of the
model, in this case these variables correspond to the amount of substances to be transported in
this case salt and sugar in tons, differentiating the amount to be transported in each
one of the 3 compartments of the ship, which for the purposes of resolving the problem remain
expressed in the following way:

SD = Amount of salt (ton.) to be transported in the front compartment.

AD = Amount of sugar (tons) to be transported in the front compartment.
SC = Amount of salt (ton.) to be transported in the central compartment.
AC=Amount of sugar (ton.) to be transported in the central compartment.
ST=Cantidad de sal (ton.) a transportar en el compartimiento trasero.
AT = Amount of sugar (tons) to be transported in the rear compartment.

2.4.2 Objective function

Having defined the decision variables, we proceed with the formulation of the objective function, which
it must deliver the maximum benefit when transporting goods, for that it
It is considered that the economic benefit from transporting sugar is 350.
euros/ton and regarding the salt it is 310 euros/ton, according to the above, the objective function of
the model fall is defined as follows:

( ) = SD * 310 + AD * 350 + SC * 310 + AC * 350 + ST * 310 + AT * 350

2.4.3 Model Restrictions

Once the objective function is established, we proceed to determine the constraints of the case study, the
which are related to the capacity of each compartment of the ship (mt).3), the maximum
the amount of both sugar and salt that can be transported and the total sum of both. To define.
the restrictions take into account the volume occupied by a ton of salt corresponds
a 25 m3/ton and regarding the sugar, this value corresponds to 30mt3/ton. According to what
previously mentioned the restrictions that govern the mathematical model are the
next:

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Capacity to transport cargo in front compartment: 6,800 mt3.
R1 = 25 * SD + 30 * AD ≤ 6.800

Capacity to transport goods in the central compartment: 8,700 mt3.

R2 = 25 * SC + 30 * AC ≤ 8.700

Capacity to transport goods in central compartment: 5,300 mt3.

R3 = 25 * ST + 30 * AT ≤ 5.700

Maximum total capacity of salt to be transported by ship: 17 tons.

R4 = SD + SC + ST ≤ 17

Maximum total capacity of salt to be transported by ship: 23 tons.

R5 = AD + AC + AT ≤ 23

Maximum accumulated load of both sugar and salt: 40 tons.

R6 = SD + AD + SC + AC + ST + AT ≤ 40

2.4.4 Presentation of the model

The mathematical model can be summarized:

( ) = SD * 310 + AD * 350 + SC * 310 + AC * 350 + ST * 310 + AT * 350

Subject to:

25 * SD + 30 * AD ≤ 6.800
25 * SC + 30 * AC ≤ 8,700
25 * ST + 30 * AT ≤ 5.700
SD + SC + ST ≤ 17
AD + AC + AT ≤ 23
SD + AD + SC + AC + ST + AT ≤ 40
; ; ; ; ; greater than or equal to 0

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 2.4.5 Resolution of the mathematical model

By solving the model using Excel Solver, the sought optimal result is obtained, which is
Show in the following table:

Transport Front compartment Central Compart. Rear compartment

No. Maritime Salt Sugar Salt Sugar Salt Sugar Condition Limit Total
Decision Variable 1 Quantity (ton) 5.0 8.33 6.0 7.33 6.0 7.33
1 Front Cap 25 30 0 0 0 0 ≤ 6,800.0 375.0
2 Central Cap 0 0 25 30 0 0 ≤ 8,700.0 370.0
Restrictions of 3 Rear Cap 0 0 0 0 25 30 ≤ 5,300.0 370.0
model 4 Max. Salary 1 0 1 0 1 0 ≤ 18.0 17.0
5 Max. Sugar 0 1 0 1 0 1 ≤ 23.0 23.0
6 Maximum Cap 1 1 1 1 1 1 ≤ 40.0 40.0
Objective Function 1 Euro/ton 310 350 310 350 310 350 Max. Profit (euros) 13,320.0
Solver Optimization Table for Problem 1, Source: Own creation.

2.5 Response Condition No. 1

Based on the model, it is obtained that the maximum benefit generated by the transportation concept
maritime sugar and salt, corresponds to 13,320 euros. Additionally, the model provides us that
the amount of sugar and salt to be transported by each compartment is as follows:

Tons Tons Tons

Compartments
of salt of sugar Totals by deposit
Forward 5 8.33 13.33
Central 6 7.33 13,33
Back 6 7.33 13,33
Totals 17 22.99 39,99

The model's result meets all the constraints, prioritizing the transport of sugar already.
that this merchandise is the one that delivers the greatest economic benefit per ton transported. Thus
It can be observed that all compartments are loaded, meeting the tonnages.
maximums, however, it is striking that in terms of volume, 1,115 m³ are being transported
cargo space available of 15,500 m³ which is equivalent to 7.19 % of
used capacity. It is recommended to analyze and assess the feasibility of increasing the tons of sugar.
and salt to achieve 100% load capacity.

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Condition No. 2

Continuing with the development of the case study, the following is proposed:

To keep the ship balanced, the weight of the cargo transported in the compartment
central must be at least 50% of the total goods transported.

To provide the answer to the above, an additional constraint must be added to the mathematical model.
that incorporates the load condition of the central compartment which must have a minimum of
50% of the total tons to be transported, given the above, the new model is presented as the
next form:

( ) = SD * 310 + AD * 350 + SC * 310 + AC * 350 + ST * 310 + AT * 350

Subject to:

25 * SD + 30 * AD ≤ 6.800

25 * SC + 30 * AC ≤ 8,700

25 * ST + 30 * AT ≤ 5.700

SD + SC + ST ≤ 17

AD + AC + AT ≤ 23

SD + AD + SC + AC + ST + AT ≤ 40

+
≥ 0.5
+ + + + +

; ; ; ; ; greater than or equal to 0

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 2.6.1 Resolution of the mathematical model

When solving the model using Excel's Solver, the desired optimal result is achieved, which is
show in the following table:

Front compartment Central Share Back compartment

Maritime Transport
N° Salt Sugar Salt Sugar Salt Sugar Condition Limit Total
Decision Variable 1 Quantity (ton) 0,0 20.0 17.0 3.0 0,0 0,0
1 Front Cap 25 30 0 0 0 0 ≤ 6,800.0 600.0
2 Central Cap 0 0 25 30 0 0 ≤ 8,700.0 515.0
Restrictions of 3 Rear Cap 0 0 0 0 25 30 ≤ 5,300.0 0,0
model 4 Max. Salary 1 0 1 0 1 0 ≤ 18.0 17.0
5 Max. Sugar 0 1 0 1 0 1 ≤ 23,0 23.0
6 Maximum Cap 1 1 1 1 1 1 ≤ 40.0 40.0
7 Cap. Min Compart. Central 0 0 1 1 0 0 ≥ 0.5 0.5
Objective Function 1 Euro/ton 310 350 310 350 310 350 Max. Profit euros 13,320.0

2.6.2 Response condition No. 2

Based on the model, it is obtained that the maximum benefit generated by the concept is maintained.
Maritime transport of sugar and salt amounts to 13,320 euros. The above is explained as
maintain the maximum weight restriction and the new condition only changes the distribution of the
merchandise, as shown in the following table:

Tons Tons Tons

Compartments
of salt of sugar Totals by deposit
Forward 0 20 20
Central 17 3 20
Butt 0 0 0
Totals 17 23 40

As mentioned earlier, the benefit of 13,320 euros is maintained; however, for

comply with the restriction that at least 50% of the
Total load was redistributed by transporting 20 tons in the compartment.
central and 20 in the front, however no load is transported in the rear compartment.

Since it is unknown whether the shipping company, or rather the cargo ship
will transport other substances besides sugar or salt, it is recommended that the company find out if it is a
technical impediment that prevents loading in the rear compartment.

On the other hand, if we analyze the load capacity in terms of tons, again the model shows us
delivery that if the capacity of the maximums, however it is noteworthy that in terms of volume
1,115 m³ of goods are being transported from a total available cargo space of 20,800.

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m³ which is equivalent to 7.19% of utilized capacity. It is recommended to analyze and assess the feasibility.
to increase the tons of sugar and salt to meet 100% of loading capacity.

Condition No. 3

In the next stage of the analysis, it is requested to consider the following condition:

If the unused space in the central warehouse costs the company 100 for each
mt.3 Modify the problem by adding this new information.

To respond to the model by incorporating the new analysis condition, it must be incorporated in
the objective function the parameter that includes the cost of not using the available space in the
central compartment. It is reported that the cost per m³ that is not used corresponds to 100, not
it refers to the currency unit of that unit amount however for calculation purposes
it is considered as euro but it will be recorded as this assumption in the conclusions of the present
report.

As mentioned earlier, the new information will be incorporated into the objective function.
of the model taking into account that the available volume is 8,700 m³, given the above
The objective function and the model are represented as follows:

( ) =( ∗ + ∗ + ∗ + ∗ + ∗ ) + ∗ −( ∗( . −( ∗ − ∗ ))

Subject to:

25 * SD + 30 * AD ≤ 6,800
25 * SC + 30 * AC ≤ 8,700
25 * ST + 30 * AT ≤ 5.700
SD + SC + ST ≤ 17
AD + AC + AT ≤ 23
SD + AD + SC + AC + ST + AT ≤ 40
; ; ; ; ; greater than or equal to 0

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 2.7.1 Resolution of the mathematical model

By solving the model using Excel's Solver, the desired optimal result is obtained, which is
show in the following table:

Transport Front Compart. Central CompartmentRear compartment

No. Maritime Salt Sugar Salt Sugar Salt Sugar Condition Limit Total
Decision Variable 1 Quantity (ton) 0,0 0,0 17.0 23.0 0,0 0,0
1 Front Cap 25 30 0 0 0 0 ≤ 6,800.0 0,0
2 Central Cap 0 0 25 30 0 0 ≤ 8,700.0 1,115.0
Restrictions of 3 Rear Cap 0 0 0 0 25 30 ≤ 5.300,0 0.0
model 4 Max. Salary 1 0 1 0 1 0 ≤ 18.0 17.0
5 Cap. Máx. Azúcar 0 1 0 1 0 1 ≤ 23.0 23.0
6 Maximum Cap. 1 1 1 1 1 1 ≤ 40.0 40.0
Objective Function 1 Euro/ton 310 350 310 350 310 350 Max. Profit -745.180,0

2.7.2 Response and recommendations for condition No. 3

Based on the resolution of the model that incorporates the information of a cost associated with not using
the total capacity in the central compartment, the model tells us that it is not obtained
loss is generated that corresponds to -745,108 euros. The above is explained already
that the model distributes all the load to the central compartment to minimize cost as much as possible
for empty space, however given the volume that the merchandise occupies complying with the
tonnage restrictions correspond to 1.115 m³, so only 12.81% is used.
available capacity.

The above can be explained by the fact that the type of merchandise to be transported does not have a
high mass-volume ratio, combined with the tonnage restriction which cannot exceed in total
The 40 does not allow reducing the available space. It is advisable to analyze if it is possible to increase.
the load capacity to be transported is well over 40 tons (close to 500 tons in
total) to reduce the free space or if the cost can be estimated based on tons and not volume.

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