14155770 Operation Research Project Transportation

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    Operations research projectON

    Transportation Problem

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    As any good work is incomplete without acknowledging the people whomade it possible, this acknowledgement is incomplete without thanking our

    family, friends, and our faculty, without whose support this project wouldn't

    have taken shape.

    Since we have joined Jaipuria Institute of Management, LUCKNOW we

    have gained so much knowledge, which has been possible due to the well-

    managed education imparted to us under conditions, which are quite

    conducive to learning, at our college.

    We express our sincere gratitude toDr. Masood Siddiqui, our teacher of

    Operations Research , who has helped us clarify our concepts by sharing

    his valued experiences in his teaching, research and training which have

    thereby become an unconscious part of our ideas and thoughts while

    analyzing the Operations Research project work on Management of

    Kaiserbagh Bus Depot.

    Without his sincere help and guidance the project report would have not

    been a possible.

    We thank all our team members who had worked hard to make the report to

    its present form.

    Lastly we would like to thank our families for their continuing support,

    blessings and encouragement.

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    I ntroduction

    Linear P rogramming

    In mathematics, linear programming (LP) is a technique foroptimization of

    a linearobjective function, subject to linear equality and linear inequality

    constraints. Informally, linear programming determines the way to achieve

    the best outcome (such as maximum profit or lowest cost) in a given

    mathematical model and given some list of requirements represented as

    linear equations.

    More formally, given apolytope (for example, apolygon or apolyhedron),

    and a real-valued affine function

    Defined on this polytope, a linear programming method will find a point in

    the polytope where this function has the smallest (or largest) value. Such

    points may not exist, but if they do, searching through the polytope vertices

    is guaranteed to find at least one of them.

    Linear programs are problems that can be expressed in canonical form:

    Maximize: ctxSubject to: Ax

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    Linear Programming Assumptions

    Linear programming requires linearity in the equations as shown in the

    above structure. In a linear equation, each decision variable is multiplied by

    a constant coefficient with no multiplying between decision variables and no

    nonlinear functions such as logarithms. Linearity requires the following

    assumptions:

    1) Proportionality - a change in a variable results in a proportionate change

    in that variable's contribution to the value of the function.

    2) Additivity - the function value is the sum of the contributions of each

    term.

    3) Divisibility - the decision variables can be divided into non-integervalues, taking on fractional values.Integer programmingtechniques can be

    used if the divisibility assumption does not hold.

    In addition to these linearity assumptions, linear programming assumes

    certainty; that is, that the coefficients are known and constant.

    The Effect of Constraints

    Constraints exist because certain limitations restrict the range of a variable's

    possible values. A constraint is considered to be bindingif changing it alsochanges the optimal solution. Less severe constraints that do not affect the

    optimal solution are non-binding.

    Tightening a binding constraint can only worsen the objective function

    value, and loosening a binding constraint can only improve the objective

    function value. As such, once an optimal solution is found, managers can

    seek to improve that solution by finding ways to relax binding constraints.

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    Route planning

    Network arises in numerous settings and in variety of guises. Transportation,

    electrical networks pervade our daily lives. Many network optimization

    models are special types of linear programming models. Route planning or

    the shortest path problem is one of them. In this problem we consider an

    undirected and connected network with 2 special nodes, called source and

    destination. Associated with each link is nonnegative distance. The objective

    is to find the shortest path from the source to the destination. A relatively

    straightforward algorithm is available for this problem. The essence of this

    procedure is that it fans out from the origin, identifying the shortest path to

    each node of the network in the ascending order of their shortest distances

    from the origin, thereby solving the problem when destination node is

    reached.

    The Transportation Problem

    There is a type of linear programming problem that may be solved using a

    simplified version of the simplex technique called transportation method.

    Because of its major application in solving problems involving several

    product sources and several destinations of products, this type of problem is

    frequently called the transportation problem. It gets its name from its

    application to problems involving transporting products from several sources

    to several destinations. Although the formation can be used to represent

    more general assignment and scheduling problems as well as transportationand distribution problems. The two common objectives of such problems are

    either (1) minimize the cost of shipping m units to n destinations or (2)

    maximize the profit of shipping m units to n destinations.

    Let us assume there are m sources supplying n destinations. Source

    capacities, destinations requirements and costs of material shipping from

    each source to each destination are given constantly. The transportation

    problem can be described using following linear programming mathematical

    model and usually it appears in a transportation tableau.

    There are three general steps in solving transportation problems.

    We will now discuss each one in the context of a simple example. Suppose

    one company has four factories supplying four warehouses and its

    management wants to determine the minimum-cost shipping schedule for its

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    weekly output of chests. Factory supply, warehouse demands, and shipping

    costs per one chest (unit) are shown below.

    Data for Transportation Problem

    At first, it is necessary to prepare an initial feasible solution, which may be

    done in several different ways; the only requirement is that the destinationneeds be met within the constraints of source supply.

    The Transportation Matrix

    The transportation matrix is where supply availability at each factory is

    shown in the far right column and the warehouse demands are shown in the

    bottom row. The unit shipping costs are shown in the small boxes within the

    cells. It is important at this step to make sure that the total supply

    availabilities and total demand requirements are equal. Often there is an

    excess supply or demand. In such situations, for the transportation method towork, a dummy warehouse or factory must be added. Procedurally, this

    involves inserting an extra row (for an additional factory) or an extra column

    (for an ad warehouse). The amount of supply or demand required by the

    dummy equals the difference between the row and column totals.

    It deals with sources where a supply of some commodity is available and

    destinations where the commodity is demanded. The classic statement of the

    transportation problem uses a matrix with the rows representing sources and

    columns representing destinations. The algorithms for solving the problem

    are based on this matrix representation. The costs of shipping from sources

    to destinations are indicated by the entries in the matrix. If shipment is

    impossible between a given source and destination, a large cost of M is

    entered. This discourages the solution from using such cells. Supplies and

    demands are shown along the margins of the matrix. As in the example, the

    classic transportation problem has total supply equal to total demand.

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    Matrix model of a transportation problem.

    The network model of the transportation problem is shown in Fig. 10.

    Sources are identified as the nodes on the left and destinations on the right.

    Allowable shipping links are shown as arcs, while disallowed links are not

    included.

    Network flow model of the transportation problem.

    Only arc costs are shown in the network model, as these are the only

    relevant parameters. All other parameters are set to the default values. The

    network has a special form important in graph theory; it is called a bipartite

    network since the nodes can be divided into two parts with all arcs going

    from one part to the other.

    On each supply node the positive external flow indicates supply flow

    entering the network. On each destination node a demand is a negative fixed

    external flow indicating that this amount must leave the network.

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    Optimum solution, z = 46.

    Variations of the classical transportation problem are easily handled by

    modifications of the network model. If links have finite capacity, the arc

    upper bounds can be made finite. If supplies represent raw materials that are

    transformed into products at the sources and the demands are in units of

    product, the gain factors can be used to represent transformation efficiency

    at each source. If some minimal flow is required in certain links, arc lower

    bounds can be set to nonzero values.

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    Problems faced by Kaiserbagh Bus Depot

    1). The Director of Roadways, Uttar Pradesh, Knows that the problem of existing

    temporary bus stand in Kaiserbagh is the increased waiting cost on behalf of thecustomers. It is known that customers arrive at a Poisson process at the rate of 100 per

    hour. The time required to deal with a customer has an exponential distribution with a

    mean service time of 30 seconds. The director feels that the cost of loss in customer

    goodwill due to waiting in queue is Rs. 10 per minute.The diector has been approached with the following two alternatives:-

    Proposal 1 is to shift the entire operations to a new location i.e. Old Kaiserbagh

    Bus Depot. The cost of transfer and designing a new facility is Rs. 4.56 crores. Its

    been assumed that the new facility will be operatatble with an estimated life of 10

    years. The new facility will reduce the average service time to 15 seconds.

    Proposal 2 is to shift the entire operations to a less populated area and designing a

    new facility with an estimated cost of Rs. 6.25 crores. The new facility will resultin reduction in average service time to 10 seconds.

    The director wants to evaluate the best proposal he should undertake so as to reduce the

    total cost of operations.

    (The Bus-Stand is operatable for 12 hours in a day for 360 days in a year).

    Solution

    Inter arrival time() = 100 per hourMean service time () = 30 seconds=120 per hour

    Cost of waiting(Cw) = 10 per minute =600 per hour

    Model used --- (M/M/1):(/GD)

    Total number of passenger waiting in que(Lq) = / (- )= 100/120(120-100)

    = 4.167

    Total cost of waiting = LqCw= 4.167 600

    = 2500.2

    Proposal 1.

    Inter arrival time() = 100 per hour

    Mean service time () = 15 seconds=240 per hour

    Cost of waiting(Cw) = 10 per minute =600 per hour

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    Model used --- (M/M/1):(/GD)

    Total number of passenger waiting in que(Lq) = / (- )

    = 100/240(240-100)

    = .297Total cost of waiting = LqCw

    = .297 600

    = 178.57Initial cost =initial investment/10yrs36012=45600000/43200=1055.55

    Total cost = Initial cost + Total cost of waiting

    =1055.55 + 178.57=1234.12

    Proposal 1.

    Inter arrival time() = 100 per hourMean service time () = 10 seconds=360 per hour

    Cost of waiting(Cw) = 10 per minute =600 per hourModel used --- (M/M/1):(/GD)

    Total number of passenger waiting in que(Lq) = / (- )= 100/360(360-100)

    = .107

    Total cost of waiting = LqCw= .107 600

    = 64.10

    Initial cost =initial investment/10yrs36012=62500000/43200=1446.75

    Total cost = Initial cost + Total cost of waiting

    =1446.75 + 64.10=1510.85

    Hence cost is minimum in proposal therefore proposal 1 will be selected.

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    2). The management of the Kaiserbagh Bus Stand is thinking of inaugurating a new

    Superfast bus service consisting of three new buses from Kaiserbagh Bus Stand. The

    buses are of three categories namely Marcopolo, Tata SE202, Echier Super105.Thelocations are Barabanki, Sitapur and Gonda. The cost structur is as follows:-

    Barabanki Sitapur GondaDistance 30 85 105

    Proposed Ticket

    Charge

    20 50 70

    The Capacity of buses and the running cost per kilometer is as follows:-

    Marcopolo Tata SE202 Echier Super105

    Capacity 60 70 80

    Cost of Running 10 15 17

    Thus, the profit for the respective routes are as follows:-

    Barabanki Sitapur Gonda

    Marcopolo 900 2150 3150

    Tata SE202 950 2225 3625

    Echier Super105 1090 2555 3815

    Solution and Senstivity Report On excel Sheet.