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 Cij Xij
Xij Si (Supply)
Xij = di (Demand)
With Xij>= 0
I is the index for origins
J index for destinations
Xij no of units shipped from origin I to destination j
Cij 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.
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
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.
More Important Things