Supply chain ( problem solving — Excel Solver ) Essay Example

LINER PROGRAM WORD DOCUMENT

Transportation problems arise frequently in planning for the distribution of products and services from several supply centers to their destination locations. The general model of solving transportation problems is represented by a linear model represented by:

Min C_ij X_ij

Subject to
X_ij Si (Supply)

X_ij = di (Demand)

With X_ij>= 0
I, j

I is the index for origins

J index for destinations

X_ij no of units shipped from origin I to destination j

C_ij cost per unit of shipping from I to j

Si supply or capacity of units at origin

Di demand of units at destination

I have used the GRG non-linear method in the excel solver to determine the minimum costs for the firm. It is attached to the assignment.

Cost is in thousands of dollars.

The excel worksheet has provided all the calculations required to derive the minimal transportation costs of the firm in transporting its rice product.

The combined linear model includes the units transported at any two points at a time to ensure costs are minimized.

DECISION VARIABLES

The sign _ has been used to show a route that cannot be used in shipment transportation.

The decision variables are represented by the different terminuses points.

The Costs have been broken into different destination points with a total transportation cost of $7,135,000

That is $7,135,000

RECOMMENDATIONS

For the company to minimize its transportation costs, it should use this transport flow as it uses the non-linear minimization model to obtain the optimal solution. Further calculations of the company should be based on the methods explained to ensure minimization of transport costs.