OPIM 101 - Spring 2012 - Session 8

OPIM 101 - Spring 2012 - Session 8 - Introduction to the...

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Introduction to the Computer as an Analysis Tool Session 8 1 Session 8: Linear Modeling Examples m Physical Networks: High-Frequency Logistics, Inc. m Financial Networks: Balancing Cash Flows
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Introduction to the Computer as an Analysis Tool Session 8 2 High-Frequency Logistics, Inc. m High-Frequency Logistics, Inc. (HFL) provides logistics support for the distribution network of a large foreign car manufacturer m For the next quarter, HFL has to transport 408 vehicles of a particular model from 3 warehouses in Europe to 4 entry points in North America m Warehouses are co-located with manufacturing plants in Finland, Germany, and Austria m North American entry points are Baltimore, MD, Brunswick, GA, San Diego, CA, and Houston, TX
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Introduction to the Computer as an Analysis Tool Session 8 3 HFL Distribution Map Germany Finland Austria GA CA MD TX
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Introduction to the Computer as an Analysis Tool Session 8 4 Demand Requirements m Entry points have the following vehicle requirements: Entry Point Demand for Vehicles MD 118 GA 90 CA 140 TX 60
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Introduction to the Computer as an Analysis Tool Session 8 5 Available Supply m Warehouses have the following inventories of vehicles available for shipping Warehouse Vehicle Inventory Finland 155 Germany 106 Austria 147
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Introduction to the Computer as an Analysis Tool Session 8 6 HFL Distribution Map Germany 106 Finland 155 Austria 147 GA 90 CA 140 MD 118 TX 60 Demand = Supply = 408
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Introduction to the Computer as an Analysis Tool Session 8 7 HFL Problem (cont.) m The costs of shipping a vehicle (in $) from each warehouse to each entry point are: m Construct a decision model to minimize cost of transporting the vehicles From/To MD GA CA TX Finland 710 580 940 740 Germany 570 550 650 600 Austria 500 420 640 580
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Introduction to the Computer as an Analysis Tool Session 8 8 HFL Problem Overview m What needs to be decided ? A distribution plan, i.e., the number of vehicles shipped from each warehouse to each entry point m What is the objective ? Minimize the total shipping cost. This total shipping cost must be calculated using the decision variables m What are the constraints ? Each entry point must get the number of units requested There are supply constraints at each warehouse
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Introduction to the Computer as an Analysis Tool Session 8 9 HFL Model: Decision Variables Germany 106 Finland 155 Austria 147 GA 90 CA 140 MD 118 TX 60 X FG X AC m Examples of Decision Variables : X FG = # of vehicles sent from F=Finland to G=GA X AC = # of vehicles sent from A=Austria to C=CA
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OPIM 101 - Spring 2012 - Session 8 - Introduction to the...

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