Minimum cost flow problem: a short description

The Minimum cost flow problem (MCFP) is a generalized network flow problem that describes the goal of minimizing the total cost of flow through a network made of arcs and nodes which contains source, sink and transshipment nodes.

The minimum-cost flow problem is to find the cheapest possible way of sending a certain amount of flow through a flow network. Solving this problem is useful for real-life situations involving networks with costs associated (e.g. telecommunications networks), as well as in other situations where the analogy is not so obvious, such as where to locate warehouses (http://en.wikipedia.org/wiki/Minimum-cost_flow_problem).

Source nodes emit flow while sink nodes absorb flow. The flow through transshipment nodes is only intermediate: inflow must be equal to outflow at these nodes: so the net flow at these nodes is zero. Additionally there are maximum flow capacities on each arc of the network, i.e. it is not allowed that the amount of flow through a certain arc exceeds the maximum capacity specified on this arc.

In the following picture node 1 has 4 units of supply (= source node with positive value), node 4 has 4 units of demand (sink node with negative value) while nodes 2 and 3 are only transshipment nodes with a supply of zero. On the arcs you find lower flow bounds, upper flow bounds (or capacities) and costs. The goal is to ship 4 units from node 1 to node 4 with the lowest costs and without violation of the flow constraints (lower and upper bounds on the arcs).

The Minimum cost flow problem can be seen as a general problem from which various other network flow problems can be derived:

• Transportation problem
• Transshipment problem
• Assignment problem
• Shortest path (tree) problem

A special case of the Minimum Cost Flow Problem is the famous transportation problem (TP). In a regular TP the network lacks transshipment nodes and capacities on the arcs. So it’s a simpler version of the MCFP. The transshipment problem comes with transshipment nodes but lacks capacities on the arcs of the network. The assignment problem is a special version of the transportation problem and you can even solve a shortest path (tree) problem as a MCFP. Read more on the theoretical background here.

So in short: if you have a MCFP-Solver at hand you are able to solve various problems with this package.

The assignment problem is a special case of the transportation problem, which is a special case of the minimum cost flow problem, which in turn is a special case of a linear program. While it is possible to solve any of these problems using the simplex algorithm, each specialization has more efficient algorithms designed to take advantage of its special structure (http://en.wikipedia.org/wiki/Assignment_problem).

As stated in this quote and in previous articles, you can describe and solve a MCFP as a Linear program with an ordinary LP solver package. The simplex algorithm will likely be applied in this case. Or you can speed up things (magnitudes faster!) with a solver that is specialized on network flow problems and exploits the network structure of the MCFP: a network simplex solver or the push-relabel algorithm.

More on this in the next articles..