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Chapter 3: Linear Programming: Network Models > 3.1 The Transportation Model

3.1. THE TRANSPORTATION MODEL

A central feature of physical supply chains is the movement of product from one or more source locations to a set of destinations where demand occurs. The cost of moving units of product, together with the cost of making the product, accounts for most of the cost of getting products to market. Small wonder, then, that a great deal of attention is paid to controlling the costs that occur in supply chains. The building block for performing this type of analysis is the transportation model. Consider the example of Goodwin Manufacturing.

Example 3.1 The Goodwin Manufacturing Company

The Goodwin Manufacturing Company is planning next week’s shipments from its three manufacturing plants to its four distribution warehouses and is seeking a minimum-cost shipping schedule. Each plant has a potential capacity, expressed in cartons of product, and each warehouse has a demand requirement for the week that must be met. There are 12 possible shipment routes, and for every plant-warehouse combination, the unit shipping cost is known. The following table provides the given information.


  

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