Ch. 8s Transportation Model

Supplement 8

Summary:

Transportation model

The transportation model uses the principle of 'transplanting' something, like taking a hole from one place and inserting it in another without change. First it assumes that to disturb or change the idea being transported in any way will damage and reduce it somehow. It also assumes that it is possible to take an idea from one person's mind into another person's so that the two people will then understand in exactly the same way.
The transportation model is a valuable tool in analyzing and modifying existing transportation systems or the implementation of new ones. In addition, the model is effective in determining resource allocation in existing business structures.

The model requires a few keys pieces of information, which include the following:

  • Origin of the supply

  • Destination of the supply

  • Unit cost to ship

The transportation model can also be used as a comparative tool providing business decision makers with the information they need to properly balance cost and supply. The use of this model for capacity planning is similar to the models used by engineers in the planning of waterways and highways.

This model will help decide what the optimal shipping plan is by determining a minimum cost for shipping from numerous sources to numerous destinations.This will help for comparison when identifying alternatives in terms of their impact on the final cost for a system. The main applications of the transportation model mention in the chapter are location decisions, production planning, capacity planning and transshipment. Nonetheless,the major assumptions of the transportation model are the following :

1. Items are homogeneous
2. Shipping cost per unit is the same no matter how many units are shipped
3. Only one route is used from place of shipment to the destination


The transportation problem involves determining a minimum-cost plan for shipping from multiple sources to multiple destinations. A transportation model is used to determine how to distribute supplies to various destinations while minimizing total shipping cost. In this case, a shipping plan is produced and is not changed unless factors such as supply, demand, or unit shipping costs change. The variables in this model have a linear relationship and therefore, can be put into a transportation table. The table will have a list of origins and each one's capacity or supply quantity period. It will also show a list of destinations and their respective demands per period. Also, it will show the unit cost of shipping goods from each origin to each destination
.


Transportation costs play an important role in location decision. The transportation problem involves finding the lowest-cost plan for distributing stocks of goods or supplies from multiple origins to multiple destinations that demand the goods. The transportation model can be used to compare location alternatives in terms of their impact on the total distribution costs for a system. It is subject to demand satisfaction at markets supply constraints. It also determines how to allocate the supplies available form the various factories to the warehouses that stock or demand those goods, in such a way that total shipping cost is minimized.



Exam Questions:


1. The transportation model relies on certain assumptions. They include all of the following except
a) the items must be homogeneous
b) there is only one route being used between each origin and destination
c) the shipping cost per unit is the same
d) the items must be large scale
e) none of the above
Correct answer: D (pg. 398-399)

2. Which of the following are supply points that a transportation model can analyze?
a) factories
b) warehouses
c) departments
d) all of the above
e) none of the above
Correct answer: D (pg. 398)

3. The basis for the transportation model is
a) a way to provide a map for people to see results
b) a method to arrive at the lowest total shipping cost
c) so delivery drivers know where to go
d) a form of accounting
e) to provide data for use in other areas
Correct answer: B (pg. 397)

4. The following transportation model is a programming model:
a) analytical‚Äč
b) non-linear
c) linear
d) rotating
e) variable
Correct answer: C (pg. 400)

5. Before the analyst of the transportation model can begin, what data would they need to collect?
a) A list of destinations
b) Unit cost to ship
c) A list of origins
d) All of the above
e) None of the above
Correct answer: D (pg. 398)

6. What does the transportation problem involve finding:
a) highest cost-plan
b) lowest cost-plan
c) closest destinations
d) farthest destinations
e) none if the above
Correct answer: B (pg. 389)

7. Transportation problems be solved
a) manually
b) with a table
c) with excel
d) with software packages
e) all of the above
Correct answer: E (pg. 392-393)

8. The objective function of the transportation model is to
a) reduce shipping costs
b) decrease shipping distance
c) maximize costs
d) minimize costs
e) none of the above
Correct answer: D (pg. 391)

9. Goods are not sent from
a) warehouses
b) factories
c) grocery stores
d) department stores
e) goods are sent from all of these locations
Correct answer: C (pg. 391)

10. Goods are received at all of the following except
a) docks
b) departments
c) factories
d) warehouses
e) all of the above
Correct answer: A

11. The method for finding the lowest-cost plan for distributing stocks of goods or supplies from multiple origins to multiple destinations that demand the goods is
a) cost-volume analysis
b) transportation model analysis
c) factor rating analysis
d) linear regression analysis
e) MODI analysis
Correct answer: B (pg. 398)

12. Except to be used to minimized the costs associated with distributing good, transportation model can also be used in
a) production planning
b) capacity planning
c) transshipment problem
d) comparison of location alternative
e) all of the above
Correct answer: E (pg. 400)

13. Which one of the following is a linear programming model ?
a) Cost-volume analysis
b) Transportation model analysis
c) Factor rating analysis
d) Linear regression analysis
e) MODI analysis
Correct answer: B (pg. 399)

14. Destination points are
a) points that receive goods from factories, warehouses, and departments
b) points where goods are sent from factories, warehouses, and departments
c) supply points
d) selling points
e) none of the above
Correct answer: A (pg. 389)
15. Transportation problems can be solved manually in a straightforward manner except for

a) medium problems
b) very small, but time consuming problems
c) large problems
d) all of the above
e) none of the above
Correct answer: D (pg. 400)


16. The transportation model is a
a) linear model
b) quadratic model
c) model with two variables
d) both a and c
e) none of the above
Correct answer: D

17. The transportation model is used to determine
a) what type of transportation to use (boat, truck, train or plane) to transport goods, while minimizing costs
b) what day of the week goods should be transportation on to minimize costs
c) how to distribute goods from multiple origins to multiple destinations to minimize total shipping costs
d) how to best package goods so that they wouldn't break while transporting them
e) none of the above
Correct answer: C

18. What assumption is used in the transportation model?:
a) The items to be shipped are heterogeneous.
b) Shipping cost per unit is the different regardless of the number of units shipped.
c) There is more than one route or mode of transportation being used between each origin and each destination.
d) The items to be shipped are the same regardless of their source or destination.
e) None of the above
Correct answer: D (pg. 378: 9th edition)

19. Which of the following is needed for a transportation model?
a) a list of origins and each one's capacity or supply quantity per period
b) a list of destinations and each one's demand per period
c) the unit cost of shipping items from each origin to each destination
d) all of the above
e) only A and B
Correct answer: D (pg. 378: 9th edition)

20. The transportation model is a linear __ model.
a) solution
b) programming
c) data
d) shipping
e) distribution
Correct answer: B (pg. 390: 9th edition)