# Example 1: Beer Distribution LP, Base Case

We start with an adaptation of a classic Linear Programming (LP) example.

## Contents

## Model Description

A large brewing company operates five breweries nationwide. Each brewery distributes product among four regions. Routes include all combinations of Breweries and Market regions. The challenge is to find the shipping pattern that minimizes distribution cost while

- meeting demand in each region, and
- observing production limits at each brewery.

We assume that distribution cost per case of beer is proportional to the distance between the brewery and the region.

## Setting up the Model

To explore and follow this example in Analytica, run the `Beer Distribution LP1.ana`

model in the Optimizer Examples folder.

**Brewery and Market (indexes)**

There are five **Breweries** and four **Market** regions:

Index Brewery := ['Fairfield', 'Fort Collins', 'Jacksonville', 'Merrimack', 'St Louis'] Index Market := ['North', 'South', 'East', 'West']

**Distance (input array)**

**Distance** between breweries and markets is represented as a table dimensioned by **Brewery** and **Market**. Units are thousands of miles:

Variable Distance := Table(Brewery, Market)(1.8, 2.2, 3.4, 0.1, 0.3,1.2, 2.4, 1, 2.9,1.8, 0.6, 3.3, 1.2, 2.1, 0.2, 3.5, 0.5, 1.1, 0.8, 2.5)

**Freight Price (input scalar value)**

**Freight Price** is a simple scalar value of $5 per 1,000 miles per case of beer.

`Variable Freight_price := 5`

**Production Limits (input array)**

**Production Limits** indicate maximum capacity for each brewery in cases of beer:

`Variable Production_limits := Table(Brewery)(600K, 250K, 450K, 300K, 240K)`

**Delivery Targets (input array)**

**Delivery Targets** indicate the minimum quota that each Market region must receive:

`Variable Delivery_target := Table(Market)(240K, 280K, 700K, 500K)`

**Distribution Cost (intermediate array)**

**Distribution Cost per Case** is Freight Price multiplied by Distance:

`Variable Dist_per_case := Freight_price*Distance`

**Shipment Quantities (input decision array)**

The input decision array represents **Shipment Quantities** from each brewery to each region. It is a two-dimensional array indexed by **Brewery** and **Market**. The non-optimized values are not used anywhere else in the model so we can simply insert 1 as a dummy value across the array.(Initial guesses do not apply since this is a Linear Program.)

Units are cases of beer.

**Staying Positive**

We set the Lower Bound attribute to zero to disallow negative shipping values, along with the undesirable implication of turning perfectly good beer back into barley and hops.

**Set Brewery and Market as intrinsic indexes**

Finally and perhaps most importantly, we consider the index status for this array. The optimized solution should be in the same form as this table. It should also be integrated such that every array element has simultaneous influence over all other elements. **Brewery** and **Market** are both *intrinsic* indexes in this case.

Decision Shipment_Quantity := Array([Brewery, Market], 1) Shipment_Quantity attribute Lower Bound := 0 Shipment_Quantity attribute Intrinsic Indexes := [Brewery, Market]

**Total Distribution (Objective)**

Our goal is to minimize the total distribution cost. For each route, distribution cost is the **Distribution Cost per Case** multiplied by the **Shipment Quantity** for each route. The final objective is the sum for all routes:

Objective Total_dist_cost := Sum(Shipment_Quantity*Dist_per_case, Brewery, Market)

Summing over **Brewery** and **Market** makes the objective a scalar value. This is a necessary condition for the optimization.

**Supply Constraint**

The **Supply Constraint** ensures that shipment quantities from a single brewery to all available markets do not exceed the production limit for the brewery.

The **Production Limit** array is already dimensioned by **Brewery.** Since this array is an input to **Supply Constraint**, we expect **Brewery** to be a dimension of **Supply Constraint** as well, even though we don’t explicitly mention the index in the defining expression. This is the basic principle of array abstraction in Analytica.

The **Supply Constraint** array actually defines five constraints; one for each **Brewery**.

**Set Brewery as an intrinsic index**

Is **Brewery** an intrinsic index for the **Supply Constraint** array? The answer is YES because we need to enforce the respective Supply Constraints on all breweries simultaneously. Make sure to include **Brewery** in the Intrinsic Indexes list for the **Supply Constraint** node.

Constraint Supply_constraint := Sum(Shipment_Quantity, Market) <= Production_Limits Supply_constraint attribute Intrinsic Indexes := [Brewery]

Is **Market** an intrinsic index for the **Supply Constraint**? The answer is NO because **Market** is not a dimension of the array at all. The Sum() function eliminates it, leaving the array with only one dimension.

**Demand Constraint**

The **Demand Constraint** ensures that each market region receives a total quantity from all breweries greater than or equal to the market demand. The input array **Delivery Targets** is dimensioned by *Market*, and therefore the **Demand Constraint** will also have this dimension.

The **Demand Constraint** array defines four constraints; one for each **Market.**

**Set Market as an intrinsic index**

**Market** is an intrinsic index for the Demand Constraint because the solution should meet quotas for all markets. Make sure to include **Market** in the Intrinsic Indexes list for the **Demand Constraint** node.

Constraint Demand_constraint := Sum(Shipment_Quantity, Brewery) >= Delivery_Target Demand_constraint attribute Intrinsic Indexes := [Market]

The Sum() function eliminates **Brewery** from the array.

**Optimization Node**

Remembering required attributes of the DefineOptimization() function as described in the Quick Start, we need to identify Decisions, Constraints, and the Objective to be minimized/maximized.

Variable Optimization := DefineOptimization (Decision: Shipment_Quantity, Constraints: Supply_Constraint, Demand_Constraint, Minimize: Total_Dist_Cost)

**Solution Node**

We obtain the solution using the OptSolution() function. The first parameter identifies the optimization node. The second parameter (optional) identifies a specific Decision for which the solution should be represented.

Decision Optimized_Solution := OptSolution(Optimization, Shipment_Quantity)

**Optimized Objective**

The OptObjective() function calculates the minimized or maximized quantity. In this case, it represents the total distribution cost.

`Variable Optimized_Objective := OptObjective(Optimization)`

**Status**

Status text will confirm that the optimizer has found a solution

`Variable Status := OptStatusText(Optimization)`

## Verifying the Optimization Setup

**Evaluate the Optimization node**

It is always a good idea to evaluate the Optimization node to confirm that the optimization is interpreting your problem as intended. The DefineOptimization() function evaluates as a special symbol, or array of symbols, indicating the type of optimization problem presented. In this case, **«LP»** confirms that this is a Linear Program as expected. Furthermore, the result shows only a single **«LP»** symbol. This confirms that the solution is the result of a single optimization run.

**Evaluate Status**

The OptStatusText() function confirms that the optimizer has found a feasible solution satisfying all constraints.

## Checking the Result

**Optimized Solution as an Array**

Evaluate the Optimized Solution array to check the final result.

In this example, we used the optional second parameter of the OptSolution() function to reference the **Shipment Quantities** array. This formats the output to match the same dimensions as the Decision input array. It is a two-dimensional table indexed by **Market** and **Brewery.**

**Optimized Solution as a List**

If you omit the second parameter of OptSolution(), Analytica creates a local index called `.DecisionVector` and presents the result as a one-dimensional array. You can experiment with this output format by removing the second parameter from the OptSolution() function.

`Variable Optimized_solution := OptSolution(Optimization)`

## Summary: Basic Beer Distribution LP

The basic beer distribution example demonstrates a simple Linear Program with a two-dimensional decision array. There are two one-dimensional Constraint arrays, each over a different index. The model has only two indexes overall: **Brewery** and **Market**. Both indexes are intrinsic to the optimization. The example does not include any extrinsic indexes.

## See Also

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