final_Transhipment_assignment

final_Transhipment_assignment - Assignment on TRANsSHIPMENT...

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Assignment on TRANsSHIPMENT PROBLEM Submitted by
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TRANSPORTATION MODEL One important application of linear programming has been in the area of physical distribution of resources, from one place to another to meet a specific set of requirements. It is easy to express a transportation problem mathematically in terms of an LP model, which can be solved by simplex method. Since transportation problem involves a large number of variables and constraints it takes a very long time to solve it by the simplex ways, involving transportation algorithm, namely the stepping stone method, MODI method have been involved for this purpose. The transportation algorithm is used to minimize the total cost of transporting a homogeneous commodity from one plane to another. However, it can also be used to take financial decisions like how the financial resources should be distributed to get maximum possible return. The transportation problem applied to situation in which a single product is to be transported from several sources to several sinks. In the transportation problem it is assumed that a source (factory, plant, etc.) acts only as a shipper of the goods and a destination (market etc.) acts only as receiver of the goods. TRANSHIPMENT PROBLEM The transshipment problem is an extension of the transportation problem in which the commodity can be transported to a particular destination through one or more intermediate or transshipment odes. Each of these nodes in turn supply to other destinations. The objective of the transshipment problem is to determine how many units should be shipped over each node so that all the demand requirements are met with the minimum transportation cost. For example, a multi-plant firm may find it necessary to send some goods from one plant to another in order to meet the substantial increase in the demand in the second market. The second plant here would act both as a source and a destination and there is no real distinction between source and destination. A transportation problem can be converted into a transshipment problem by relaxing the restrictions on the receiving and sending the units on the origins and destinations respectively. An m-origin, n-destination,
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transportation problem, when expressed as transshipment problem, shall become an enlarged problem: with m + n origins and an equal number of destinations. With minor modifications, this problem can be solved using the transportation method. If we let the sources and destinations in a transshipment problem as T, then
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This note was uploaded on 01/06/2012 for the course FINANCE 123 taught by Professor Monica during the Spring '11 term at Air Force Academy.

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final_Transhipment_assignment - Assignment on TRANsSHIPMENT...

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