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Click Add to enter the following constraint.ħ.

Click Add to enter the following constraint.Ħ. Enter Shipments for the Changing Variable Cells.ĥ. You have the choice of typing the range names or clicking on the cells in the spreadsheet.Ĥ. The result should be consistent with the picture below. Note: can't find the Solver button? Click here to load the Solver add-in.Įnter the solver parameters (read on). On the Data tab, in the Analyze group, click Solver. To find the optimal solution, execute the following steps.ġ. We shall describe next how the Excel Solver can be used to quickly find the optimal solution.

It is not necessary to use trial and error. With this formulation, it becomes easy to analyze any trial solution.įor example, if we ship 100 units from Factory 1 to Customer 1, 200 units from Factory 2 to Customer 2, 100 units from Factory 3 to Customer 1 and 200 units from Factory 3 to Customer 3, Total Out equals Supply and Total In equals Demand.

Total Cost equals the sumproduct of UnitCost and Shipments. Range NameĮxplanation: The SUM functions calculate the total shipped from each factory (Total Out) to each customer (Total In). To make the model easier to understand, create the following named ranges. 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.Ģ. What are the constraints on these decisions? Each factory has a fixed supply and each customer has a fixed demand.Ĭ. 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.ī. To formulate this transportation problem, answer the following three questions.Ī.