Chapter 8 Supplement Learning Objectives

1. Describe the nature of a transportation problem.

The transportation problem involves finding the lowest-cost plan for distributing stocks of goods or supplies from multiple origins to multiple destinations that demand the goods. For instance, a firm might have three factories, all of which are capable of producing identical units of the same product, and four warehouses that stock or demand those products. The transportation model can be used to determine how to allocate the supplies available from the various factories to the warehouses that stock or demand those goods, in such a way that total shipping cost is minimized. Usually, analysis of the problem will produce a shipping plan that permits to a certain period of time, although once the plan is established, it will generally not change unless one or more of the parameters of the problem changes.

2. Set up transportation problems in the general linear programming format.

The transportation problem involves determining a minimum-cost plan for shipping from multiple sources to multiple destinations. (see pg 375)

3. Interpret computer solutions.

Although manual solution of transportation problems is fairly straightforward, computer solution are generally preferred, particularly for moderate or large problems. Many software packages call for data input in the same tabular form used in this supplement. A more general approach is to format the problem as a standard linear programming model. That approach enables one to use the more general version of an LP package to solve a transportation problem. Another approach to transportation problems is to use spreadsheet software. The Excel templates can also be used to solve transportation problems.