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Department of Industrial and Management Engineering

Project: Operation Research
The Analysis of Problem Using: Maximum Flow / Supply Chain / Logistics
University of Turabo





Facilitator:
Alexander X. Flix Rodrguez

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The Analysis of Problem Using Maximum Flow

Abstract
To improve and maximize the flow of oil and transportation for the Texago Corporation.
The following case consists of a special problem within Operation Research Eighth Edition
Book by authors Hillier & Lieberman. The problem comprises four oil fields, four
refineries and four distribution centers. The corporation contains a huge network diagram
that has been used to analyze the Maximum Flow of the product within the network.

Problem Definition
The transportation of the industries oil now has sharply curtailed the capacity to ship oil
from the oil field to the refineries and distribution center. The objective is to maximize the
number of units that can be transported per day from each oil field to refinery, and
distribution center. The management now wants to determine a plan to see how many units
to transport from each oil field to refinery and from each refinery to each distribution center
that will maximize the total number of units reaching the distribution center.


Why is the use of these methods important?
The first method for this problem requires the use of Maximum Flow to optimize the
standards of the company. It is also used to find a feasible solution. The flow of this
problem starts from the Source to the Sink. This will provide a guideline within the
network making sure that maximum flow is going through. The second method is Supply
Chain Management this will help so that it can manage and interconnect the links, networks
or channels of the business involving the provision of the product or service that is
required. The third method is Logistics and the importance that it will help manage the flow
of the resources between the point of origin and the point of consumption to meet the
requirements of the customer or corporation.




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Key Objectives
The key and objective of this project is to maximixe and analyze the Network flow by
applying specific methods. The goal is to increase the demand and distribution of oil. The
use of the right methods can benefit the entire corporation. The three major areas to
analyze are the distributions of the oil within the ocean using freighter ships and on land
using the trucks and trains to distribute all around the nation. The ships will only be used to
transport from the Middle East to America and from the state of Alaska to its nearest
destination in Seattle, Washington. The mission is that America receives the maximum
flow of oil so that they can distribute it all around the nation.

Conclusion

My analysis and conclusion after an extensive algorithmic mythology that was used to
maximize the networks flow is that the Maximum Flow of oil that is being transported
across the US nation is one hundred and ten. However that one hundred and ten keeps
dragging through the different phases of the network. The second observation was made
when I noticed that from the Oil Fields to Refineries the algorithm gave me a total of one
hundred and ten but the capacity is one hundred and eighteen, having a loss of eight in the
process. Then from the Refineries to the Distribution Center a second algorithm was done
alone within the process. One hundred and ten was the flow that was being floated towards
the distribution center but the capacity is one hundred and seventeen having another loss of
seven. Once concluded you realize that there is a loss of 15 total eight from phase one and
seven from phase two within the network.

Acknowledgement
The author and facilitator would like to give thanks to the Institute of Industrial Engineers
(IIE) for the information that was provided and used to make this project a success. The
author also would like to give thanks to two special people, Prof. Ariel D. Machin, PE and
Alexis C. Flix, ph.D for their support and insight in the project and for their advice and
unconditional support.
Reference:
Hillier & Lieberman, (2005). Introduction to Operation Research, New York, NY:
McGraw-Hill
Weida, Richardson & Vazsonyi, (2000). Operations Analysis Using Microsoft Excel,
California, CA: Pacific Grove
Richard Bronson & Govindasami Naadimuthu, (1997). Operation Research Schaums out
lines, New York, NY: McGraw-Hill
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The Network Analysis for a Maximum Flow
Oil Fields Refineries Distribution Centers



















From To Ship Capacity

From To Ship Capacity
TX NO 9 11

NO PT 5 5
TX CH 7 7 26

NO AT 9 9 24
TX SE 2 2

NO KC 6 6
TX SL 8 8

NO SF 4 4
CA NO 0 5

CH PT 4 8
CA CH 4 4 18

CH AT 7 7 25
CA SE 7 8

CH KC 9 9
CA SL 7 7

CH SF 5 5
AK NO 7 7

SE PT 4 4
AK CH 5 5 30

SE AT 6 6 25
AK SE 12 12

SE KC 7 7
AK SL 6 6

SE SF 8 8
ME NO 8 8

SL PT 12 12
ME CH 9 9 36

SL AT 11 11 36
ME SE 4 4

SL KC 9 9
ME SL 15 15

SL SF 4 7



Maximum Flow = 110 Ships



24 + 25 + 25 + 36 = 110
26+18+30+36=
110




Source
Sink
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Network Analysis using a Supply Chain Management view Approach 1
The Continent of the United States of America and its Supply Network across the
world.
The transformation and modern way to transport Oil domestically or abroad.


The three Oil Fields in the United States come from Alaska, California and Texas. The last
resort that is represented by a green arrow comes from oversees the probability is Saudi
Arabia.
Texas
Max Flow: 26
Capacity 28
Loss 2
California
Max Flow: 18
Capacity 24
Loss 6
Alaska
Max Flow: 30
Capacity 30
Loss 0
Middle East
Max Flow: 36
Capacity 36
Loss 0

Full Capacity = 118
Max Flow = 110
Loss = 8
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Network Analysis using a Supply Chain Management Approach 2
The Continent of the United States of America and its Supply Network
The Distribution of the Oil from its Refineries to its collective Distribution Centers

The Oil spread all across the United States, being processed and cut up into different
markets and locations. The idea of refining, redefining comes as a market strategy for the
business.
New Orleans
Max Flow: 24
Capacity 24
Loss 0
Charleston
Max Flow: 25
Capacity 29
Loss 4
Seattle
Max Flow: 25
Capacity 25
Loss 0
St. Louis
Max Flow: 36
Capacity 39
Loss 3
Full Capacity = 117
Max Flow = 110
Loss = 7
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Network Analysis using a Supply Chain Management Approach 3
The Continent of the United States of America and its Supply Chain Management
Network bouncing all around the nation and overseas.
This representation puts together all phases from the Oil field to the Refinery; from
the Refinery to the Distribution Center.
You can also appreciate the pattern which it takes to distribut as well as its gains or
profits and loss in a large scale.
The Logistics within the Network and its Analysis.




The Network Analysis outcome:
Full Capacity 118 Full Capacity 117
Max Flow 110 Max Flow 110
Loss 8 Loss 7
Total Loss 15

Final Max Flow 110


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The Logistics of Transportation with its Steps: Determining what is the best way to get
from A to B or C if necessary.
Step 1: Distributing the Oil from the Oil Fields to the Refinery the following states: Texas,
California economically and time scheduling speaking the best ways to distribute would be
by using big transportational truck or transport train to arrive to the following states: New
Orleans, Charleston, Seattle or St. Louis.
Step 2: Distributing the Oil from the Oil Fields to the Refinery the following places would
be Alaska and the Middle East, and would be better to distribute it by Big Freighter Ship to
the four states New Orleans, Charleston, Seattle or St. Louis in the US.
Step 3: There are 4 Refineries in 4 different states in the US. The following states New
Orleans, Charleston, Seattle or St. Louis would be proccesing the Oil and getting it ready
for the Distribution Centers across the nation. Once that nation is set you can start
analyzing the routes, distances and ways to transport the Oil. The 4 Distribution Centers in
4 different states would be Pittsburgh, Atlanta, Kansas City, and San Francisco. The best
way to distribut the oil to the different states would be using big transportational truck or
transport train.
Step 4: The final step once all the oil has been processed into different characteristics and
distributed to its different locations by Trucks or Transportation Trains, from there another
logistics procedure can be obtained and analyzed. This time it would be the quantity of
customers by region or state and how much profit is being obtained and its margin of loss.
Step 5 / Conclusion: Everything requires a procedure in which logistics and Supply Chain
come in hand to improve and innovate the business strategy. The prices of competitive
advantages require investing and helping improve the business infrastucture to provide
better customer satisfactions.








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The Logistics within the Network and Analyziz using Supply Chain Management
The United States of Americas (USA) Time Zone Map from East to West logistics.
The Middle East or the country of Saudi Arabia would be included; they would be 7
hours ahead of the USA east coast.


The Division of the USA Time Zone Map