1. 8s-1 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model

2. 8s-2 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model Chapter 8 Supplement The Transportation Model Available on Student CD-ROM and Online Learning Centre

3. 8s-3 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model Requirements for Transportation Model List of origins and each one’s capacity List of destinations and each one’s demand Unit cost of shipping

4. 8s-4 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model Transportation Model Assumptions Items to be shipped are homogeneous Shipping cost per unit is the same Only one route between origin and destination

5. 8s-5 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model The Transportation Problem D (demand) D (demand) D (demand) D (demand) S (supply) S (supply) S (supply) Figure 8S-1

6. 8s-6 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model A Transportation Table Warehouse 47 7 1 100 12 3 8 8 200 8 1016 5 150 450 8090120160 ABCD 1 2 3 Factory Factory 1 can supply 100 units per period Total supply capacity per period Total demand per period Demand Warehouse B can use 90 units per period Table 8S-1

7. 8s-7 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model Special Problems Unequal supply and demand Dummy: Imaginary number added equal to the difference between supply and demand when these are unequal Degeneracy: The condition of too few completed cells to allow all necessary paths to be constructed

8. 8s-8 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model Summary of Procedure Make certain that supply and demand are equal Develop an initial solution using intuitive, low-cost approach Check that completed cells = R+C-1 Evaluate each empty cell Repeat until all cells are zero or positive

9. 8s-9 McGraw-Hill Ryerson Operations Management, 2 nd Canadian Edition, by Stevenson & Hojati Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The Transportation Model Excel Template Figure 8S-2