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# Optimization

## Elliott, G., Elliott, A. & Brar, H.

A Transportation Example

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## Plan Solve Grow

NINE MILE
Management Consulting

## Optimization: A Transportation Example

Question?
How should Company A transport bricks in order to minimize overall transportation cost? Thankfully advanced linear programming techniques allow us to answer this problem in a reasonable fashion.

Example:
Suppose Company A is a manufacturer of bricks. Company A owns 3 warehouses and sells its product to 3 markets. The supply of each warehouse (si), the demand (dj) of each market, and the shipping costs (cij) per ton are presented in the matrix below (Table 1.1).

Table 1.1 Warehouse 1 (W1) Warehouse 2 (W2) Warehouse 3 (W3) Market Demands

Market 1 (M1) \$2/ton (c11) \$9/ton (c21) \$1/ton (c31) 40 tons (d1)

Market 2 (M2) \$1/ton (c12) \$4/ton (c22) \$2/ton (c32) 50 tons (d2)

Market 3 (M3) \$2/ton (c13) \$7/ton (c23) \$9/ton (c33) 20 tons (d3)

Warehouse Supplies 40 tons (s1) 60 tons (s2) 10 tons (s3) 110 tons Total Supply

Total Demand

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