Management

Science 461
Lecture 6 – Network Flow
Problems
October 21, 2008
Intro
 Go back to Red Dog
 Show how a number of DM models and
techniques are special cases of
 Min-cost network flow problem
Example from MGTSC 352
Each arc has
positive cost
Supply nodes
have negative
values; demand
nodes are
positive
Transshipment
nodes have 0
demand, 0
supply
Capacity of 10
per arc
This is a balanced problem – why?
Model
 Define Xij = amount of product from node i
to node j
 Objective Function: minimize total cost

12 X 12  14 X 13  16 X 14  8 X 23  13 X 25  4 X 34  14 X 35  12 X 54
Model
 For each node, we have a flow
conservation constraint
Incoming
(Inflow) In + Supply = Out + Demand

Supply
In – Out = Demand – Supply
Demand

Outgoing In – Out ≥ Demand – Supply

(Outflow)
All Constraints

 X 12  X 13  X 14  17 (node 1)
X 12  X 23  X 25  13 (node 2)
X 13  X 23  X 34  X 35  0 (node 3)
X 14  X 34  X 54  22 (node 4)
X 25  X 35  X 54  8 (node 5)
X ij  10 (capacity)
X ij  0 (nonnegati vity)
New model
 Constraints hard to write out – but there’s an
easier way.
 Node Arc Incidence Matrix cleans up this
process but also reveals the structure of the
problem
 Every row corresponds to an arc, and has at
most one “1” and one “-1” entry
 Therefore, matrix is unimodular
Unimodularity
 References for all your unimodular needs:
 Nemhauser & Wolsey, Integer &
Combinatorial Optimization
 Ahuja, Magnanti, and Orlin, Network Flows
 Unimodular matrix: “a nonsingular matrix
with a determinate of ±1; a square matrix
is totally unimodular if every nonsingular
submatrix from it is unimodular.” So there.
Why do we care?
 Integer solutions without having to specify
integer values
 Integer constraints force more costly
Solver computation
 So important that other problems are
modeled as transportation problems e.g.
inventory
Summary
 Min cost network flow:
 Objective function: min cost
 Capacity on arcs
 Flow conservation
 Special Cases:
 Shortestpath (source and sink nodes, no capacities)
 Transshipment: No capacities
 Transportation: All nodes either suppy or demand
 Max flow problems – identify capacity constraints
Add location to the mix
 This is what you did in Red Dog, MGTSC
352
 Minimize fixed cost of location +
transportation cost
 Constraints as before (flow conservation
and capacity)
 Add binary variables for facility location
Effects on flow conservation
 Add binary Yj as follows:
 Sumproduct in objective function (fixed cost)
 New flow balance constraint becomes
IN – OUT ≥ DEMAND – SUPPLY*Y
 If Y = 0, make sure we satisfy demand (positive
transportation costs ensure we never “pool”
product at the node)
 If Y=1, we have the constraint as before, ensures
we produce enough and ship it out.