Download Creason 1 Chad Creason IE 416 2

Creason 1
Chad Creason
IE 416
2- Consider problem in your Supplementary Notes called "Ryan Electronics".
In this problem we are faced with a transshipment problem in which we are asked to determine
the minimum cost associated with distributing items to warehouses and then from the
warehouses to Retail Outlets. The following representation shows the Network Representation
for Ryan Electronics.
200
5
Detroit
600
1
2
2
Denver
150
3
Kansas
City
6
6
3
3
Miami
6
3
350
4
400
4
2
Atlanta
1
4
Louis
7
Dallas
6
300
5
8
New
Orleans
Supply
Cost of
Shipment
Demand
Creason 2
a) Solve it as a transshipment problem using WinQSB. Refer to the example on the
Class Notes. Print input and output tables.
WinQSB Input:
WinQSB Output:
Creason 3
b) Represent the solution graphically.
The following representation shows how the software, WinQSB represents a graphical solution
for this current transshipment problem. The positive red numbers indicate the supply at that point
and the negative red numbers indicate the demand that is required from the supply. The purple
numbers indicate the route and amount of each product as it makes its way from a Plant to a
Warehouse and then ultimately ending up in a Retail Outlet.
WinQSB Output Range of Optimality:
Creason 4
Creason 5
Sensitivity Analysis:
Considering the cost of shipment from the Denver plant to the Louisville warehouse we learn
that the Mid-West region of America is installing a business railway to incorporate a faster mode
of transportation for businesses and their supplies. Considering that the cost of shipment from
Denver to Louisville can be reduced from 3 dollars per unit to 2 dollars per unit we will
ultimately learn how the shipment plan might change and how the total cost of shipment will
change. The following WinQSB representation shows how the lower cost was inputted into the
software and then solved to show the effects of the change.
WinQSB Input(Denver to Louisville)
WinQSB Output(Denver to Louisville)
Compared to the original solution we learn that the shipment plan will not change based on the
installation of the new cheaper railway, however, the total cost of shipment will be reduced from
$5,200 to $5,150.
Creason 6
c) Write a report to a manager and explain the solution.
Dear Manager,
Based on the solution information, the total minimum cost is $5,200. The following
explanation shows the proposed shipment strategy for a minimum cost: The Denver plant will
produce 600 units and ship 50 of those units to the Louisville warehouse and the remaining 550
units to the Kansas City warehouse. The Atlanta plant will produce 400 units and ship all 400
units to the Louisville warehouse. After all units are accounted for at the Louisville and Kansas
City warehouses, they will then be shipped out to Retail Outlets. Considering the Louisville
warehouse, the 450 units will be distributed to the Retail Outlets in the following manner: 150
units to Miami, 300 units to New Orleans. Considering the Kansas City warehouse, the 550 units
will be distributed to the Retail Outlets in the following manner: 200 units to Detroit, 350 units to
Dallas. In this current situation all of the Retail Outlets’ demands are met and there is no surplus
of supply.
Noticing that if Ryan Electronics reduces the cost of shipping units from the Denver plant
to the Louisville warehouse by one dollar, the shipment plan will not be affected regarding the
original shipment plan. However, Ryan Electronics will see a change in the cost of shipment for
the entire system. The total minimization cost will change from $5,200 to $5,150 saving the
company $50 in shipping.