OMIS 355 Case Study
Finding the Optimal Distribution Strategies
The San Marcau Company produces and distributes meter used to measure electric
power consumption. The company started with a small produ
Chapter5
NetworkModeling
1
Agenda
Previous
LP, LP sensitivity analysis, solver
This Chapter: two sessions
Session 1: Transportation Problem (today, EX); Chap 5.1
Session 2:
A quiz on Chap 4
Assignment
0.925
Pass
Test Z
1
Test Y
0
2
5.97
6.15
6.15
2.4
6.15
0.075
Fail
0.875
Pass
3.75
0
3.75
2
0
5.87
0.86
Pass
Test Y
1
Test Z
0
6.15
6.15
2
6.15
Test X
2.4
1.75
5.87
5.355
0.14
Fail
4.15
0
4.15
0.125
Fa
Plan A
0.4
Approved
137.5
129.5
137.5
2
0
99
Plan B
Seek Approval
99
91
8
99
122.1
0.6
Denied
Plan A
1
0
137.5
137.5
129.5
137.5
Plan A
129.5
1
129.5
129.5
122.1
Plan A
0.4
Approved

Price
X
Y
Z
Sum
Pairwise Comparisons
X
Y
Z
1.000
0.250
3.000
4.000
1.000
7.000
0.333
0.143
1.000
5.333
1.393
11.000
X
Y
Z
Normalized Comparisons
X
Y
Z
0.188
0.179
0.273
0.750
0.718
0.636
0.063
0.103
0
Leadership
X
Y
Z
Sum
Pairwise Comparisons
X
Y
Z
1.000
3.000
4.000
0.333
1.000
2.000
0.250
0.500
1.000
1.583
4.500
7.00
X
Y
Z
Normalized Comparisons
X
Y
Z
0.632
0.667
0.571
0.211
0.222
0.286
0.158
0.11
0.925
Pass
Test Z
1
Test Y
0
2
5.97
6.15
6.15
2.4
6.15
0.075
Fail
0.875
Pass
3.75
0
3.75
2
0
5.87
0.86
Pass
Test Y
1
Test Z
0
6.15
6.15
2
6.15
Test X
2.4
1.75
5.87
5.355
0.14
Fail
4.15
0
4.15
0.125
Fa
Probabilities
Joint Probabilities
Forecasted Demand
Low
Medium
High
Actual Demand
Low
Medium
High
0.1600
0.0300
0.0100
0.0350
0.2800
0.0350
0.0225
0.0450
0.3825
Conditional Probabilities For
Given For
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Chapter 3
Modeling & Solving LP Problems In A Spreadsheet
1.
In general, it does not matter what is placed in a variable (changing) cell. Ultimately, Solver will determine the
optimal values for these
Maximax
Payoffs (in $1,000s) Amount of Snow: Heavy Normal $10 $7 $8 $8 $4 $4
Size of Order: Large Medium Small
Light $3 $6 $4
Maximum $10 <maximum $8 $4
Page 1
Maximin
Payoffs (in $1,000s) Amount of
Payoffs
Payoff Matrix
Investment:
Stock
CD
Good
16.0%
8.0%
Market Conditions:
Average
9.0%
8.0%
Poor
2.0%
8.0%
Page 1
Maximax
Payoff Matrix
Investment:
Stock
CD
Market Conditions:
Good
Average
16.0%
Payoffs
Payoff Matrix (in $1,000s)
Size of Development
Small
Medium
Large
Low
400
200
400
Market Demand
Medium
400
500
300
High
400
500
800
Page 1
Utilities
Payoff Matrix (in utility)
Size of Develop
Payoffs
Payoff Matrix (in $1,000s)
Size of Development
Small
Medium
Large
Low
400
200
400
Market Demand
Medium
400
500
300
High
400
500
800
Page 1
Maximax
Payoff Matrix (in $1,000s)
Size of Developme