Chapter 5

Network Flow Models

Introduction
A number of business problems can be represented graphically as networks. This chapter focuses on several such problems:
Transshipment Problems Shortest Path Problems Maximal Flow Problems Transportation/Assignment Problems Generalized Network Flow Problems The Minimum Spanning Tree Problem

Network Flow Problem Characteristics

Network flow problems can be represented as a collection of nodes connected by arcs. There are three types of nodes: Supply Demand Transshipment Well use negative numbers to represent supplies and positive numbers to represent demand.

A Transshipment Problem: The Bavarian Motor Company

+100 Boston 2 $30 Newark 1 -200 $50

+60

Columbus
3 $40

$40
$35 +170 $25 $35 +70 Mobile 6 $45 Atlanta 5 $30 Richmond +80 4

$50

$50

J'ville 7

-300

Defining the Decision Variables

For each arc in a network flow model we define a decision variable as:
Xij = the amount being shipped (or flowing) from node i to node j

For example
X12 = the # of cars shipped from node 1 (Newark) to node 2 (Boston) X56 = the # of cars shipped from node 5 (Atlanta) to node 6 (Mobile)

Note: The number of arcs determines the number of variables!

Defining the Objective Function

Minimize total shipping costs. MIN: 30X12 + 40X14 + 50X23 + 35X35 +40X53 + 30X54 + 35X56 + 25X65 + 50X74 + 45X75 + 50X76

Constraints for Network Flow Problems: The Balance-of-Flow Rules

For Minimum Cost Network Flow Problems Where: Total Supply > Total Demand Total Supply < Total Demand Total Supply = Total Demand Apply This Balance-of-Flow Rule At Each Node: Inflow-Outflow >= Supply or Demand Inflow-Outflow <=Supply or Demand Inflow-Outflow = Supply or Demand

Defining the Constraints

In the BMC problem:
Total Supply = 500 cars Total Demand = 480 cars
(Supply >= Demand)

For each node we need a constraint like this:

Inflow - Outflow >= Supply or Demand

Constraint for node 1:

X12 X14 >= 200
(Note: there is no inflow for node 1!)

This is equivalent to:

+X12 + X14 <= 200

Defining the Constraints

Flow constraints
X12 X14 >= 200 +X12 X23 >= +100 +X23 + X53 X35 >= +60 + X14 + X54 + X74 >= +80 + X35 + X65 + X75 X53 X54 X56 >= +170 + X56 + X76 X65 >= +70 X74 X75 X76 >= 300 } node 1 } node 2 } node 3 } node 4 } node 5 } node 6 } node 7

Nonnegativity conditions Xij >= 0 for all ij

Implementing the Model

See file Fig5-2.xls

Optimal Solution to the BMC Problem

+100 $50

Boston 2

$30

20
+60 Columbus 3 $40

120 80

Newark 1

-200

$40

40
+170 Atlanta 5

Richmond +80 4

$45 Mobile 6

210
J'ville 7

+70

70
$50 -300

The Shortest Path Problem

Many decision problems boil down to determining the shortest (or least costly) route or path through a network.
Ex. Emergency Vehicle Routing

This is a special case of a transshipment problem where:

There is one supply node with a supply of -1 There is one demand node with a demand of +1 All other nodes have supply/demand of +0

The American Car Association

L'burg 9
5.0 hrs 9 pts

+0

3.3 hrs 5 pts

+1
Va Bch
11

2.0 hrs 4 pts

+0
K'ville 5
1.7 hrs 5 pts 2.0 hrs 9 pts

4.7 hrs 9 pts

+0
3.0 hrs 4 pts

G'boro

1.1 hrs 3 pts

2.7 hrs 4 pts

Raliegh
10

+0

A'ville 6
2.8 hrs 7 pts

+0

+0
2.0 hrs 8 pts

1.5 hrs 3 pts

2.3 hrs 3 pts

Chatt. 3

Charl. 7

3.0 hrs 4 pts

1.7 hrs 4 pts

+0
G'ville 4
1.5 hrs 2 pts

B'ham 1

Atlanta
2.5 hrs 3 pts

2.5 hrs 3 pts

+0

-1

+0

Solving the Problem

There are two possible objectives for this problem
Finding the quickest route (minimizing travel time) Finding the most scenic route (maximizing the scenic rating points)

See file Fig5-7.xls

The Equipment Replacement Problem

The problem of determining when to replace equipment is another common business problem. It can also be modeled as a shortest path problem

The Compu-Train Company

Compu-Train provides hands-on software training. Computers must be replaced at least every two years. Two lease contracts are being considered: Each requires $62,000 initially Contract 1:
Prices increase 6% per year 60% trade-in for 1 year old equipment 15% trade-in for 2 year old equipment

Contract 2:
Prices increase 2% per year 30% trade-in for 1 year old equipment 10% trade-in for 2 year old equipment

Network for Contract 1

+0
$63,985

+0
4
$30,231 $32,045

2
$28,520

$33,968

-1

$60,363

$67,824

+1

+0
Cost of trading after 1 year:
etc, etc.

1.06*$62,000 - 0.6*$62,000 = $28,520

Cost of trading after 2 years: 1.062*$62,000 - 0.15*$62,000 = $60,363

Solving the Problem

See file Fig5-12.xls

Transportation & Assignment Problems

Some network flow problems dont have transshipment nodes; only supply and demand nodes.
Supply 275,000

Groves
Mt. Dora

Distances (in miles)

21 50

Processing Plants
Ocala

Capacity 200,000

400,000

40 These problems are implemented more effectively using the technique 35 30 Eustis described in Chapter 3. Orlando 600,000

22

55

300,000

Clermont

20
25

Leesburg

225,000

Generalized Network Flow Problems

In some problems, a gain or loss occurs in flows over arcs.
Examples
Oil or gas shipped through a leaky pipeline Imperfections in raw materials entering a production process Spoilage of food items during transit Theft during transit Interest or dividends on investments

These problems require some modeling changes.

Coal Bank Hollow Recycling

Process 1 Material Cost Newspaper $13 Mixed Paper $11 White Office Paper $9 Cardboard $13 Yield 90% 80% 95% 75% Process 2 Cost $12 $13 $10 $14 Yield 85% 85% 90% 85% Supply 70 tons 50 tons 30 tons 40 tons Print Stock

Newsprint

Packaging Paper

Pulp Source Recycling Process 1 Recycling Process 2 Demand

Cost Yield $5 95% $6 90% 60 tons

Cost Yield $6 90% $8 95% 40 tons

Cost Yield $8 90% $7 95% 50 tons

Network for Recycling Problem

-70
Newspaper

$13

1
$12 90%
Mixed paper

+0
Recycling Process 1

95% $5 $6 $8 90%

Newsprint pulp

+60

-50

$11 $13

80% 95%

7
90%

5
75%

Packing paper pulp

+40

-30

White office paper

$9 85% $10 90%

85% $6
Recycling Process 2

95% 90%

$8 $7

6
$13 85%

+0

95%

Print stock pulp

+50

-40

Cardboard

$14

Defining the Objective Function

Minimize total cost. MIN: 13X15 + 12X16 + 11X25 + 13X26 + 9X35+ 10X36 + 13X45 + 14X46 + 5X57 + 6X58 + 8X59 + 6X67 + 8X68 + 7X69

Defining the Constraints-I

Raw Materials -X15 -X16 >= -70 -X25 -X26 >= -50 -X35 -X36 >= -30 -X45 -X46 >= -40

} node 1 } node 2 } node 3 } node 4

Defining the Constraints-II

Recycling Processes
+0.9X15+0.8X25+0.95X35+0.75X45- X57- X58-X59 >= 0
} node 5

+0.85X16+0.85X26+0.9X36+0.85X46-X67-X68-X69 >= 0

} node 6

Defining the Constraints-III

Paper Pulp
+0.95X57 + 0.90X67 >= 60 } node 7 +0.90X57 + 0.95X67 >= 40 } node 8 +0.90X57 + 0.95X67 >= 50 } node 9

Implementing the Model

See file Fig5-17.xls

Important Modeling Point

In generalized network flow problems, gains and/or losses associated with flows across each arc effectively increase and/or decrease the available supply. This can make it difficult to tell if the total supply is adequate to meet the total demand. When in doubt, it is best to assume the total supply is capable of satisfying the total demand and use Solver to prove (or refute) this assumption.

The Maximal Flow Problem

In some network problems, the objective is to determine the maximum amount of flow that can occur through a network. The arcs in these problems have upper and lower flow limits. Examples How much water can flow through a network of pipes? How many cars can travel through a network of streets?

The Northwest Petroleum Company

Pumping Station 1 Pumping Station 3

2 6 2

4 6

Oil Field

Refinery

4 3
Pumping Station 2

2 4 5 5
Pumping Station 4

The Northwest Petroleum Company

Pumping Station 1 Pumping Station 3

2 6 2

4 6

Oil Field

Refinery

4 3
Pumping Station 2

2 4 5 5
Pumping Station 4

Formulation of the Max Flow Problem

MAX: Subject to: X61 +X61 - X12 - X13 = 0 +X12 - X24 - X25 = 0 +X13 - X34 - X35 = 0 +X24 + X34 - X46 = 0 +X25 + X35 - X56 = 0 +X46 + X56 - X61 = 0

with the following bounds on the decision variables: 0 <= X12 <= 6 0 <= X25 <= 2 0 <= X46 <= 6 0 <= X13 <= 4 0 <= X34 <= 2 0 <= X56 <= 4 0 <= X24 <= 3 0 <= X35 <= 5 0 <= X61 <= inf

Implementing the Model

See file Fig5-24.xls

Optimal Solution
Pumping Station 1

Pumping Station 3

2
5

4 6
5

Oil Field

Refinery

4
4

4 3
Pumping Station 2

5
2

5
Pumping Station 4

Special Modeling Considerations: Flow Aggregation

+0
$3

-100

1
$4 $4 $5

$5
$3 $5

+75

-100

4
$6

+50

+0 Suppose the total flow into nodes 3 & 4 must be at least 50 and 60, respectively. How would you model this?

Special Modeling Considerations: Flow Aggregation

+0
$3

+0
L.B.=50

-100

1
$4 $4

30

$5 $3 $5

+75

-100

2
$5

40
L.B.=60

4
$6

+50

+0

+0

Nodes 30 & 40 aggregate the total flow into nodes 3 & 4, respectively.

Special Modeling Considerations: Multiple Arcs Between Nodes

$8

-75

$6 U.B. = 35

+50

Two two (or more) arcs cannot share the same beginning and ending nodes. Instead, try... +0 10
$0 $6 U.B. = 35 $8

-75

+50

Special Modeling Considerations: Capacity Restrictions on Total Supply

-100
$5, UB=40

+75

1
$4, UB=30 $6, UB=35

2 -100

$3, UB=35

4 +80

Supply exceeds demand, but the upper bounds prevent the demand from being met.

Special Modeling Considerations: Capacity Restrictions on Total Supply

-100
$999, UB=100 $5, UB=40

+75
3

1
$4, UB=30

+200 0
$999, UB=100

$6, UB=35

-100

$3, UB=35

+80

Now demand exceeds supply. As much real demand as possible will be met in the least costly way.

The Minimal Spanning Tree Problem

For a network with n nodes, a spanning tree is a set of n-1 arcs that connects all the nodes and contains no loops. The minimal spanning tree problem involves determining the set of arcs that connects all the nodes at minimum cost.

Minimal Spanning Tree Example: Windstar Aerospace Company

2
$100 $40 $150

4
$85 $75

1
$85 $90

$80

3
$65

$50

Nodes represent computers in a local area network.

The Minimal Spanning Tree Algorithm

1. Select any node. Call this the current subnetwork.

2.

Add to the current subnetwork the cheapest arc that connects any node within the current subnetwork to any node not in the current subnetwork. (Ties for the cheapest arc can be broken arbitrarily.) Call this the current subnetwork.
If all the nodes are in the subnetwork, stop; this is the optimal solution. Otherwise, return to step 2.

3.

Solving the Example Problem - 1

2
$100 $85

1
$85 $90

$80

3 6

Solving the Example Problem - 2

2
$100 $85

4
$75

1
$85 $90

$80

3 6

$50

Solving the Example Problem - 3

2
$100 $85

4
$75

1
$85

$80

3
$65

$50

Solving the Example Problem - 4

2
$100 $40 $85

4
$75

$80

3
$65

$50

Solving the Example Problem - 5

2
$150

4
$85 $75

$40

$80

3
$65

$50

Solving the Example Problem - 6

2 4
$75 $40

$80

3
$65

$50

End of Chapter 5