FIXED CHARGE

TRANSPORTATION MODEL

ALLWIN RANA J R
ROLL NO. 05
M2 IE
 Transportation Problem

Single Item transported from m sources to n destinations

Supply in source i ai
Demand in destination j bj
Unit cost of Transportation from i to j
Quantity of item transported from source i to destination j
 Transportation Problem

Objective function :

Minimize =1 =1

subject to =1 Xij = ai i = 1, .m

=1 Xij = bj j = 1, ..n 0
 Fixed Charge TP
There is a fixed charge associated in transporting in arc i-j in addition to the
unit transportation cost -

IP formulation : Minimize +

subject to =1 Xij = ai i = 1, .m

=1 Xij = bj j = 1, ..n

Xij 0, Yij = 0 ,1. Xij MYij

 Fixed Charge TP

Xij - quantity transported from i-j.

Yij - 1 if quantity is transported from i-j.
Big M links them

Fixed charge can be considered as toll to be paid to move material .

Objective function is the sum of fixed charges and variable costs.
Third constraint transport in arc only when it is chosen.
No limit on quantity transported in an arc.
 Fixed Charge TP

S1-D1 100
S2-D2 120
4 6 8 30 S3-D3 110
6 7 6 40 S4-D4 80
4 8 12 60 S5-D5 120
20 60 12 S6-D6 60
S7-D7 120
S8-D8 80
S9-D9 60
 Fixed Charge TP

Ip formulation:
Minimize ( 4X11 + 6X12 + 8X13 + 6X21 + 7X22 + 6X23 + 4X31 + 8X32 + 12X33 ) +
100Y11 + 120Y12 + 110Y13 + 80Y21 + 120Y22 + 60Y23 + 120Y31 +
80Y32 + 60Y33
Subject to X11 + X12 + X13 30
X21 + X22 +X23 40
Xij 1000Yij , Xij 0, Yij = 0 ,1

X11 =20 , X13 =10, X23 =40 , X32 =60, Y11 =Y13= Y23 =1 , Z=1230 (Optimal)
 Fixed Charge TP (Heuristic Solution )

(1) Consider only variable costs and add fixed charge to the optimal
solution.
(2) Add component of fixed charge into variable cost , redefine :

= +
, mij minimum of {ai , bj }

Heuristic solution to FCTP can be obtained from optimal solution with

values.
 Fixed Charge TP (Heuristic Solution )
Optimal solution with only
variable costs
X13 10
X23 40 Computation :

X31 20 Eg S1 to D1
X32 40
Y12=Y13=Y23=Y31= 1
Y32 = 4 + =4+5=9
,
Total Cost 1330
Fixed Charge TP (Heuristic Solution )

S1 to D1 4+5=9
S2 to D2 6 + 4 = 10 9 10 11.66 30
S3 to D3 8 + 3.66 = 11.66 10 10 7.5 40
S4 to D4 6 + 4 =10 10 9.33 13.2 60
S5 to D5 7 + 3 =10 20 60 12
S6 to D6 6 + 1.5 = 7.5
Optimal solution :
S7 to D7 4 + 6 =10
S8 to D8 8 + 1.33 = 9.33 X11 =20, X13 =10, X23 =40, X32 =60
S9 to D9 12 + 1.2 = 13.2 Z =1230. { 880 (V) + 350 (F) }
 FCTP (Multiple Items)
Sik indicate availability of item k in supply point i and Djk represent demand
for the item k in demand point j.

IP formulation : Minimize +

subject to Xijk Sik i = 1, .m , k=1,.K

Xijk Djk j = 1, ..n, k=1,.K
Xijk MYij
Xij 0, Yij = 0 ,1.
FCTP (Multiple Items- Heuristic Solution )

Use heuristic for the single item.

Add the costs
Per unit transportation costs is the same same basic variables for the
k items.
Depends on supply and demand quantities
Bases if different Solve for one item optimally ( or heuristically )
&
Use the basis for other items.