The objective of this homework is for the student to gain experience in network design and to develop intuition about the complexity of network problems.
1. Develop several heuristic approaches (at least 2) to solve the network design problem described in below.
You are working for a logistics company, which is planning to open three distribution centers in the US. These distribution centers will serve customers located in the capitals of 48 continental states + DC. You are managing a team of industrial engineers whose task is to divide 49 states/DC into three groups (one group for each distribution center) and, for each group of states, determine a tour that will start in one state (this is the state where the distribution center will be open) and travel every other state within the group and come back to the starting state. Note that the location of the distribution center really does not matter since the tour you are designing “touches” each state within the group only once. Your goal, of course, is to minimize the total distance of three tours (one for each group of states).
You can calculate the length of tours using the Excel file by simply entering the state abbreviations in three columns (each column represents a group of states) according to the sequence in your tours. The excel file will automatically update the graph of the tours and tour length calculations as you enter states.
2. Test your approaches using the Excel file. Identify the best approach. Try to describe the reasons why your approaches worked / did not work.
Write a 2-page, not including the title page (maximum + any appendices) report addressing the following topics (note the percentage of the grade for each component):
1. (40%) Describe your heuristic approaches and how you developed them.
2. (30%) Discuss the results of your network design. Include the resulting routes both as a list and shown on the map.
3. (30%) Describe other ways to improve the logistics/transportation costs. Provide a preliminary economic analysis to support your suggestions.