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Transportation Solver Aggregate Plan

The document provides input data for a supply, demand, cost and inventory optimization problem. The objective is to allocate production across regular time, overtime and subcontracting to meet demand at minimum cost over three periods. The summary includes supply, demand, cost and transportation data. Decision variables and constraints are defined for the optimization model to be solved using Excel Solver to determine the optimal production allocation and minimum total cost.

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Gopichand Athukuri
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704 views

Transportation Solver Aggregate Plan

The document provides input data for a supply, demand, cost and inventory optimization problem. The objective is to allocate production across regular time, overtime and subcontracting to meet demand at minimum cost over three periods. The summary includes supply, demand, cost and transportation data. Decision variables and constraints are defined for the optimization model to be solved using Excel Solver to determine the optimal production allocation and minimum total cost.

Uploaded by

Gopichand Athukuri
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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File: 393925124.

xls As of: 08/06/2018 - 20:20:28

A firm has developed the following supply, demand , cost and inventory data. Allocate production capacity to meet demand at a minimum cost using
transportation method. What is the minimum cost? Assume that the initial inventory has no holding cost in the first period.

Input Data
100 cost_reg regular-time cost
150 cost_ot overtime cost
200 cost_sub subcontracting cost
4 cost_hold inventory holding cost Input the data,
Invoke the Solver using the
40 cost_back backorder cost
Tools-Solver menu,
Get the complete the aggregate plan at
a. Unit Transportation Cost - a i j the bottom of the worksheet.
Destinations Print the worksheet if needed.
j=1 2 3 Supply
Origins Period 1 Period 2 Period 3 Available - b i
i=1 Initial inv 0 4 8 20
2 Reg-time 1 100 104 108 30
3 Overtime 1 150 154 158 10
4 Subcon 1 200 204 208 5
5 Reg-time 2 140 100 104 35
6 Overtime 2 190 150 154 12
7 Subcon 2 240 200 204 5
8 Reg-time 3 180 140 100 30
9 Overtime 3 230 190 150 10
10 Subcon 3 280 240 200 5
Demand Desired - c j 40 50 40

b. Define decision variables


X i j = number of units transported from origin ( production method ) i to destination ( period) j

c. Define objective function


minimize transportation cost
min Z = ∑ a i j X i j
ij

d. Define constraints
Origin i ∑ Xi j ≤ bi Destination j ∑ Xi j = cj Xi j ≥ 0
j i

e. Implementation with Excel Solver


Decision Variables - X i j
To display Solver Window,
Destination use Tools-Solver menu.
j=1 2 3
Origin Period 1 Period 2 Period 3
i=1 Initial inv 20 0 0
2 Reg-time 1 20 10 0
3 Overtime 1 0 0 0
4 Subcon 1 0 0 0
5 Reg-time 2 0 35 0
6 Overtime 2 0 5 0
7 Subcon 2 0 0 0
8 Reg-time 3 0 0 30
9 Overtime 3 0 0 10
10 Subcon 3 0 0 0

Objective Fct
Destination
j=1 2 3
Origin Period 1 Period 2 Period 3 Sums
i=1 Initial inv 0 0 0 0
2 Reg-time 1 2,000 1,040 0 3,040
3 Overtime 1 0 0 0 0
4 Subcon 1 0 0 0 0
5 Reg-time 2 0 3,500 0 3,500
6 Overtime 2 0 750 0 750
7 Subcon 2 0 0 0 0
8 Reg-time 3 0 0 3,000 3,000
9 Overtime 3 0 0 1,500 1,500
10 Subcon 3 0 0 0 0
Sums 2,000 5,290 4,500 11,790

Constraints
Supply Used <= Supply Available
Supply Supply
Origin Used Available
i=1 Initial inv 20 20
2 Reg-time 1 30 30
3 Overtime 1 0 10
4 Subcon 1 0 5
5 Reg-time 2 35 35
6 Overtime 2 5 12
7 Subcon 2 0 5
8 Reg-time 3 30 30
9 Overtime 3 10 10
10 Subcon 3 0 5
Sums 130 162

Demand Used = Demand Desired


Demand Demand
Destination Used Desired
j=1 Period 1 40 40
2 Period 2 50 50
3 Period 3 40 40
Sums 130 130

f. Aggregate Plan
Destination
j=1 2 3
Origin Period 1 Period 2 Period 3
Reg-time 30 35 30
Overtime 0 5 10
Subcon 0 0 0
Solution to Solver

0 600

800 100

0 500

Page 2
Starting values

0 0

0 0

0 0

Page 3

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