Network Optimization

The term network flow program describes a type of model that is a special case of the more
general linear program. The class of network flow programs includes such problems as the
transportation problem, the assignment problem, the shortest path problem, the maximum flow
problem, the pure minimum cost flow problem, and the generalized minimum cost flow problem. It
is an important class because many aspects of actual situations are readily recognized as
networks and the representation of the model is much more compact than the general linear
program. When a situation can be entirely modeled as a network, very efficient algorithms exist
for the solution of the optimization problem, many times more efficient than linear programming in
the utilization of computer time and space resources

Figure 1

Terminology
A network or graph consists of points, and lines connecting pairs of points. The points are called
nodes or vertices. The lines are called arcs. The arcs may have a direction on them, in which
case they are called directed arcs. If an arc has no direction, it is often called an edge. If all the
arcs in a network are directed, the network is a directed network. If all the arcs are undirected, the
network is an undirected network.

Two nodes may be connected by a series of arcs. A path is a sequence of distinct arcs (no nodes
repeated) connecting the nodes. A directed path from node i to node j is a sequence of arcs, each
of whose direction (if any) is towards j. An undirected path may have directed arcs pointed in
either direction.

A path that begins and ends at the same node is a cycle and may be either directed or
undirected.

A network is connected if there exists an undirected path between any pair of nodes. A connected
network without any cycle is called a tree, mainly because it looks like one.

Examples
There are many examples of using network flows in practice. Here are a few

 Transportation Problem

 Assignment Problem

 Shortest Paths

 Maximum Flow
TRANSPORTATION MODEL

The transportation model seeks the determination of a transportation plan of a single

commodity from a number of sources to a number of destinations. The data of the model include:

1. Level of supply at each source and amount of demand at each destination

2. The unit transportation cost of the commodity from each source to each destination.

Since there is only one commodity, a destination can receive its demand from one or
more sources. The objective of the model is to determine the amount to be shipped from each
source to each destination such that the total transportation cost is minimized.
The basic assumption of the model is that the transportation cost on a given route is
directly proportional to the number of units transported. The definition of “unit transportation” will
vary depending on the “commodity” transported.

Sources destinations

The figure depicts the transportation model as a network with m sources n destinations.
A source or a destination is represented by a node. The arc joining a source and a destination
represents the route through which the commodity is transported. The amount of supply at source
i is ai and the demand at destination j is bj. The unit transportation cost between source i and
destination j is cij

m n
min. z =
  Cij X ij
i=1 j=1
 subject to
TP Sample:
The MG Auto Company has plants in LA, Detroit, and New Orleans. Its major distribution centers
are located in Denver and Miami. The capacities of the three plants during the next quarter are
1000, 1500, and 1200 cars. The quarterly demands at the two distribution centers are 2300, and
m

X ij  ai, i= 1,2,…m
i=1
n
X ij  bi, i= 1,2,…n
j=1
Xij  0

1400 cars. The train transportation cost per car per mile is approximately 8 cents. The mileage
chart between the plants and distribution centers is as follows:

Denver Miami supply

Los 1000 2690 1000

Angeles

Detroit 1250 1350 1500

New
Orleans 1275 850 1200

Demand 2300 1400

The mileage chart can be translated to cost per car at the rate 8 cents per mile. This yields the
following costs (rounded to the closest dollar)

Denver Miami supply

Los 80 215 1000

Angeles

Detroit 100 108 1500

New
Orleans 102 68 1200

Demand 2300 1400

The demand (3700 units) = supply (3700 units)

Construct a Transportation Problem Model:

Transportation Problem Model:
 Minimize z = 80x11 + 215x12 + 100x21 + 108x22 + 102x31 + 68x32
Subject to
x11 + x12 = 1000
x21 + x22 = 1500
x31 + x32 = 1200
x11 + x21 + x31 = 2300
x12 + x22 + x32 = 1400
x11,x12,x21,x22,x31,x32 ≥ 0

What if

• Supply exceeds demand (unbalanced)?

• Demand exceeds supply?

Suppose the supply at Detroit is 1800?

Denver Miami supply

Los 80 215 1000

Angeles

Detroit 100 108 1800

New
Orleans 102 68 1200

Demand 2300 1400

Since the total supply (4000) is greater than the total demand (3700) we create a fictitious or
dummy destination to absorb the excess supply.

That is we add a dummy with a fictitious demand of 300.

Denver Miami dummy supply

Los 80 215 1000

Angeles

Detroit 100 108 1800

New
Orleans 102 68 1200

Demand 2300 1400 300

Suppose the supply at Detroit is 1300?

Denver Miami supply

Los 80 215 1000

Angeles

Detroit 100 108 1300

 New
Orleans 102 68 1200

dummy 200

Demand 2300 1400

Here the demand exceeds supply so a dummy source (plant) can be added with its capacity
= 200 cars
Solution:

a1 node 1 1000 node 1 Denver b1

1000 LA 2300

1300

a2 node 2 200 node 2 Miami b2

1500 Detroit 1400

a3 node 3 1200
1200 NO

Transportation Algorithm
Determine starting solution M sources N destinations
M + N constraint equations

supply = demand so model has M + N – 1 independent

constraint equations M + N – 1 basic variables

use 1) NorthWest corner method

2) Least Cost Method
3) Vogel Approximation Method

better starting solution yields smaller objective value

example: SunRay Transport

3 silos to 4 mills Cij – cost i to j
i = 1,2,3 j = 1,2,3,4
min cost
Xij – quantity shipped ( i to j )

M = 3 and n =4 6 basic variables

MILL

1 2 3 4 SUPPLY
 1 10 2 20 11 15

X11 X12 X13 X14

SILO 2 12 7 9 20 25

X21 X22 X23 X24

3 4 14 16 18 10

X31 X32 X33 X34

DEMAND 5 15 15 15

MILL
1 2 3 4 SUPPLY X13 20-9+7-2 16
1 10 2 20 11 X14 11-20+7-2 -4
5 10 X13 X14 15 X21 12-10+2-7 -3
2 12 7 9 20
SILO

X31 4-10+2-7+20-18 -9
X21 5 15 5 25 X32 14-7+9-16 0
3 4 14 16 18 X33 16-9+20-18 9
X31 X32 X33 10 10
DEMAND 5 15 15 15 MIN @ X31(5,5,10) = 5

MILL
1 2 3 4 SUPPLY X11 10-2+7-20+18-4 9
1 10 2 20 11 X13 20-9+7-2 16
X11 15 X13 X14 15 X14 11-20+7-2 -4
SILO

2 12 7 9 20 X21 12-20+18-4 6
X21 0 15 10 25 X32 14-7+20-18 9
3 4 14 16 18 X33 16-9+20-18 9
5 X32 X33 5 10
DEMAND 5 15 15 15 MIN @ X14(10,15)=10

MILL
1 2 3 4 SUPPLY X11 10-11+18-4 13
1 10 2 20 11 X13 20-9+7-2 16
X11 5 X13 10 15 X21 12-7+2-11+18-4 10
2 12 7 9 20
SILO

X24 20-7+2-11 4
X21 10 15 X24 25 X32 14-2+11-18 5
3 4 14 16 18 X33 16-9+7-2+11-18 5
5 X32 X33 5 10
DEMAND 5 15 15 15

Therefore: X11 = 0 X12 = 5X13 = 0X14 = 10

X21 = 0 X22 = 10X23 = 15X24 = 0
X31 = 5 X32 = 0X33 = 0X34 = 5
Y = 435
Silo 1 can supply 5 tons of ore to mill 2 and 10 tons of ore to mill 4.
 Silo 2 can supply 10 tons of ore to mill 2 and 15 tons of ore to mill 3
Silo 3 can supply 5 tons of ore to mill 1 and 5 tons to mill 3.
The total cost of transporting the 50 tons of ore to the three different mills is 435.

Vogel Method:

For each row and column remaining under consideration calculate its difference, which is defined
as the arithmetic difference between the smallest and next to the smallest unit cost still remaining in that row
or column,(if two costs tie being the smallest remaining in a row or column, then the difference is zero) in
that row or column having the largest difference, select the variable having the smallest remaining unit cost
and the smallest supply/demand

row
1 2 3 4 supply difference
1 10 2 20 11 15 8
2 12 7 9 20 25 2
3 4 14 16 18 10 10
demand 5 15 15 15 select x31 = 5
column difference 6 5 7 2 eliminate column 1

row
2 3 4 supply difference
1 2 20 11 15 9
2 7 9 20 25 2 X31 = 5
3 14 16 18 5 2 X12 = 15
X22 = 0
demand 15 15 15 select x12 =15
X23 =15
column difference 5 7 7 eliminate row 1 X24 = 10
X34 = 5

row
2 3 4 supply difference
2 7 9 20 25 2
3 14 16 18 5 2
demand 0 15 15 select x22 =0
column difference 7 7 2 eliminate column 2

row
3 4 supply difference
2 9 20 25 11
3 16 18 5 2
demand 15 15 select x23 = 15
column difference 7 2 eliminate column 3

row
4 supply difference
2 20 10 5
3 18 5
demand 15 select x24 = 10
column difference 5 select x34 = 5