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Transportation Problem 1

Minimize the costs of shipping goods from factories to customers, while not exceeding
the supply available from each factory and meeting the demand of each customer.
Cost of shipping ($ per product)      
  Destinations  
  Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
Factory 1 $1.75 $2.25 $1.50 $2.00 $1.50
Factory 2 $2.00 $2.50 $2.50 $1.50 $1.00
Number of products shipped          
  Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Total Capacity
Factory 1 0 0 0 0 0 0 60,000
Factory 2 0 0 0 0 0 0 60,000
Total 0 0 0 0 0  
Demand 30,000 23,000 15,000 32,000 16,000    
               
Total cost of shipping $0          
Problem              
A company wants to minimize the cost of shipping a product from 2 different factories to 5 different customers.
Each factory has a limited supply and each customer a certain demand. How should the company distribute the
product?              
               
Solution              
1) The variables are the number of products to ship from each factory to the customers. These are given the
name Products_shipped in worksheet Transport1.        
2) The logical constraint is            
  Products_shipped >= 0 via the Assume Non-Negative option    
The other two constraints are          
  Total_received >= Demand          
  Total_shipped <= Capacity          
3) The objective is to minimize cost. This is given the name Total_cost.      
               
Remarks              
This is a transportation problem in its simplest form. Still, this type of model is widely used to save many
housands of dollars each year.          
In worksheet Transport2 we will consider a 2-level transportation, and in worksheet Transport3 we expand this to
a multi-product, 2-level transportation problem.        

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