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Operations Management

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Presentation on theme: "Operations Management"— Presentation transcript:

1 Operations Management
William J. Stevenson 8th edition

2 The Transportation Model
CHAPTER 8s The Transportation Model Operations Management, Eighth Edition, by William J. Stevenson Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

3 Requirements for Transportation Model
List of origins and each one’s capacity List of destinations and each one’s demand Unit cost of shipping Note: The DVD that accompanies this book contains a module that provides detailed instruction on the transportation model

4 Transportation Model Assumptions
Items to be shipped are homogeneous Shipping cost per unit is the same Only one route between origin and destination

5 The Transportation Problem
Figure 8S.1 D (demand) S (supply)

6 A Transportation Table
Table 8S.1 Warehouse 4 7 1 100 12 3 8 200 10 16 5 150 450 80 90 120 160 A B C D 2 Factory Factory 1 can supply 100 units per period Total supply capacity per period Total demand per period Demand Warehouse B can use 90

7 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 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 Excel Template Figure 8S.2

10 CHAPTER 8s Additional PowerPoint slides contributed by Geoff Willis, University of Central Oklahoma.

11 ANALYSES Transportation Model Center of gravity & simple median models
minimizes transportation costs using LP Center of gravity & simple median models minimizes transportation costs using geometry

12 Center of Gravity Determine the center of gravity for the destinations shown on the following map. Monthly shipments will be the quantities listed in the table. Destination Quantity D D D D D D2 D5 D1 D4 D3

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