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On the fixed-charge transportation problem

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  • Adlakha, Veena
  • Kowalski, Krzysztof

Abstract

In many distribution problems, the transportation cost consists of a fixed cost, independent of the amount transported and a variable cost, proportional to the amount shipped. In such fixed-charge transportation problems, is it possible to find a solution with less (or equal) cost than the optimal solution by shipping more units, under the condition that at least the same amount is shipped from each supply point and to each market? This question has not received any attention in the literature, and no algorithm (either analytical or heuristic) is known to address this problem. The more-for-less analysis could be useful for managers in decisions such as increasing warehouse/plant capacity, analyzing company acquisitions, mergers, consolidations or downsizing. In this paper we develop a quick sufficient condition to identify candidate markets and supply points to ship more for less in fixed-charge transportation problems.

Suggested Citation

  • Adlakha, Veena & Kowalski, Krzysztof, 1999. "On the fixed-charge transportation problem," Omega, Elsevier, vol. 27(3), pages 381-388, June.
    • Handle: RePEc:eee:jomega:v:27:y:1999:i:3:p:381-388
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    References listed on IDEAS

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    1. Katta G. Murty, 1968. "Solving the Fixed Charge Problem by Ranking the Extreme Points," Operations Research, INFORMS, vol. 16(2), pages 268-279, April.
    2. Udatta S. Palekar & Mark H. Karwan & Stanley Zionts, 1990. "A Branch-and-Bound Method for the Fixed Charge Transportation Problem," Management Science, INFORMS, vol. 36(9), pages 1092-1105, September.
    3. Charnes, A. & Duffuaa, S. & Ryan, M., 1987. "The more-for-less paradox in linear programming," European Journal of Operational Research, Elsevier, vol. 31(2), pages 194-197, August.
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    Cited by:

    1. Adlakha, Veena & Kowalski, Krzysztof & Wang, Simi & Lev, Benjamin & Shen, Wenjing, 2014. "On approximation of the fixed charge transportation problem," Omega, Elsevier, vol. 43(C), pages 64-70.
    2. Hüseyin Güden & Haldun Süral, 2017. "A polynomial algorithm for the earthwork allocation problem with borrow and waste site selection," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(9), pages 1085-1093, September.
    3. Hong, Jiangtao & Diabat, Ali & Panicker, Vinay V. & Rajagopalan, Sridharan, 2018. "A two-stage supply chain problem with fixed costs: An ant colony optimization approach," International Journal of Production Economics, Elsevier, vol. 204(C), pages 214-226.
    4. Adlakha, Veena & Kowalski, Krzysztof, 2003. "A simple heuristic for solving small fixed-charge transportation problems," Omega, Elsevier, vol. 31(3), pages 205-211, June.
    5. V Adlakha & K Kowalski, 2004. "A simple algorithm for the source-induced fixed-charge transportation problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(12), pages 1275-1280, December.
    6. Adlakha, Veena & Kowalski, Krzysztof & Vemuganti, R.R. & Lev, Benjamin, 2007. "More-for-less algorithm for fixed-charge transportation problems," Omega, Elsevier, vol. 35(1), pages 116-127, February.
    7. Jawahar, N. & Balaji, A.N., 2009. "A genetic algorithm for the two-stage supply chain distribution problem associated with a fixed charge," European Journal of Operational Research, Elsevier, vol. 194(2), pages 496-537, April.

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