1. Logistics and Tools: Transportation and Transshipment Models

2. Transportation Rail Trucking
low-value, high-density, bulk products, raw materials, intermodal containers
not as economical for small loads, slower, less flexible than trucking
Trucking
main mode of freight transport in U.S.
small loads, point-to-point service, flexible
More reliable, less damage than rails; more expensive than rails for long distance

3. Transportation (cont.)
Air
most expensive and fastest, mode of freight transport
lightweight, small packages <500 lbs
high-value, perishable and critical goods
less theft
Package Delivery
small packages
fast and reliable
increased with e-Business
primary shipping mode for Internet companies

4. Transportation (cont.)
Water
low-cost shipping mode
primary means of international shipping
U.S. waterways
slowest shipping mode
Intermodal
combines several modes of shipping-truck, water and rail
key component is containers
Pipeline
transport oil and products in liquid form
high capital cost, economical use
long life and low operating cost

5. Internet Transportation Exchanges
Bring together shippers and carriers
Initial contact, negotiations, auctions
Examples

6. Transportation Model
A transportation model is formulated for a class of problems with the following characteristics
a product is transported from a number of sources to a number of destinations at the minimum possible cost
each source is able to supply a fixed number of units of product
each destination has a fixed demand for product
Solution Methods
stepping-stone
modified distribution
Excel’s Solver

7. Transportation Method: Example

8. Transportation Method: Example

9. Problem Formulation Using Excel
Total Cost Formula

10. Using Solver from Tools Menu

11. Solution

12. Modified Problem Solution

13. Transshipment Model

14. Transshipment Model: Solution