Transportation problem with Excel

Use the solver in Excel to find the number of units to ship from each factory to each customer that minimizes the total cost.

Formulate the model

To formulate this transportation problem, answer the following three questions.

  • What are the decisions to be made? For this problem, we need Excel to find out how many units to ship from each factory to each customer. (in yellow)
  • What are the constraints on these decisions? Each factory has a fixed supply and each customer has a fixed demand. (in light blue)
  • What is the overall measure of performance for these decisions? The overall measure of performance is the total cost of the shipments, so the objective is to minimize this quantity. (in dark blue)

LP37

Name the following ranges:

Range Name Cells
UnitCost C4:E6
Shipments C10:E12
TotalIn C14:E14
Demand C16:E16
TotalOut G10:G12
Supply I10:I12
TotalCost I16

And insert the following functions :

LP38

Solve the model

Enter the solver parameters:

LP39

The optimal solution is:

LP40