Logistics and Tools: Logistics and Tools: Transportation and Transshipment ModelsTransportation and Transshipment Models

TransportationTransportation

Rail low-value, high-density, bulk

products, raw materials, intermodal containers

not as economical for small loads, slower, less flexible than trucking

Trucking main mode of freight

transport in U.S. small loads, point-to-point

service, flexible More reliable, less damage

than rails; more expensive than rails for long distance

Transportation (cont.)Transportation (cont.)

Air most expensive and fastest, mode of

freight transport lightweight, small packages <500 lbs high-value, perishable and critical

goods less theft

Package Delivery small packages fast and reliable increased with e-Business primary shipping mode for Internet

companies

Transportation (cont.)Transportation (cont.)

Water low-cost shipping mode primary means of international shipping U.S. waterways slowest shipping mode

Intermodal combines several modes of shipping-

truck, water and rail key component is containers

Pipeline transport oil and products in liquid form high capital cost, economical use long life and low operating cost

Internet Transportation Internet Transportation ExchangesExchanges

Bring together shippers and Bring together shippers and carrierscarriers

Initial contact, negotiations, Initial contact, negotiations, auctionsauctions

ExamplesExampleswww.nte.comwww.freightquote.com

Transportation ModelTransportation Model

A transportation model is formulated for a class of A transportation model is formulated for a class of problems with the following characteristicsproblems with the following characteristics a product is transported from a number of sources to a a product is transported from a number of sources to a

number of destinations at the minimum possible costnumber of destinations at the minimum possible cost each source is able to supply a fixed number of units of each source is able to supply a fixed number of units of

productproduct each destination has a fixed demand for producteach destination has a fixed demand for product

Solution MethodsSolution Methods stepping-stonestepping-stone modified distributionmodified distribution Excel’s SolverExcel’s Solver

Transportation Method: ExampleTransportation Method: Example

Transportation Method: ExampleTransportation Method: Example

Problem Formulation Using Excel

Total Cost Formula

Using Solver from Tools

Menu

Solution

Modified Problem Solution

Transshipment Transshipment Model Model

Transshipment Model: SolutionTransshipment Model: Solution