Transportation and

Assignment Models
 Chapter Outline
1. Introduction
2. Setting Up a Transportation Problem
3. Developing an Initial Solution:Northwest
Corner Rule
4. Stepping-Stone Method: Finding a Least-Cost
Solution
5. MODI Method
 Chapter Outline - continued
6. Vogel’s Approximation Method: Another
Way to Find an Initial Solution
7. Unbalanced Transportation Problems
8. Degeneracy in Transportation Problems
9. More Than One Optimal Solution
10. Facility Location Analysis
 Learning Objectives
Students will be able to
♣Structure special linear programming problems
using the transportation and assignment models.
♣Use the northwest corner method and Vogel’s
approximation method to find initial solutions to
transportation problems.
♣Apply the stepping-stone and MODI methods to find
optimal solutions to transportation problems.
Learning Objectives - continued
♣ Solve the facility location problem and other
application problems with the transportation
model.
♣ Solve assignment problems with the
Hungarian (matrix reduction) method.
 Specialized Problems
♦ Transportation Problem
♣ Distribution of items from several sources to
several destinations. Supply capacities and
destination requirements known.
♦ Assignment Problem
♣ One to one assignment of people to jobs, etc.

Specialized algorithms save time!

 Transportation Problem
Cleveland
Des Moines (200 units)
(100 units) required
capacity

Albuquerque Boston
(300 units) Evansville (200 units)
required (300 units) required
capacity

Ft. Lauderdale
(300 units)
capacity
 Transportation Costs
To
From (Destinations)
(Sources) Albuquerque Boston Cleveland
Des Moines $5 $4 $3

Evansville $8 $4 $3

Fort Lauderdale $9 $7 $5
 Unit Shipping Cost:1Unit,
Factory to Warehouse
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
(D)
Evansville 8 4 3
(E)
Ft Lauderdale 9 7 5
(F)
Warehouse
Req.
Total Demand and Total Supply
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 100
(D)
Evansville 300
(E)
Ft Lauderdale 300
(F)
Warehouse
Req. 300 200 200 700
 Transportation Table For
Executive Furniture Corp.
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100
(D)
Evansville 8 4 3
300
(E)
Ft Lauderdale 9 7 5
300
(F)
Warehouse
Req. 300 200 200 700
 Initial Solution Using the
Northwest Corner Rule
♦ Start in the upper left-hand cell and allocate
units to shipping routes as follows:
♣ Exhaust the supply (factory capacity) of each row
before moving down to the next row.
♣ Exhaust the demand (warehouse) requirements of
each column before moving to the next column to
the right.
♣ Check that all supply and demand requirements
are met.
 Initial Solution
North West Corner Rule
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 3
200 100 300
(E)
Ft Lauderdale 9 7 5
100 200 300
(F)
Warehouse
Req. 300 200 200 700
 The Stepping-Stone Method
1. Select any unused square to evaluate.
2. Begin at this square. Trace a closed path back to the
original square via squares that are currently being
used (only horizontal or vertical moves allowed).
3. Place + in unused square; alternate - and + on each
corner square of the closed path.
4. Calculate improvement index: add together the unit cost
figures found in each square containing a +; subtract
the unit cost figure in each square containing a -.
5. Repeat steps 1 - 4 for each unused square.
 Stepping-Stone Method - The
Des Moines-to-Cleveland Route
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 Start 3
100 100
(D) - +
Evansville 8 4 3
200 100 300
(E) -
+
Ft Lauderdale 9 7 5
100 200 300
(F) + -
Warehouse
Req. 300 200 200 700
 Stepping-Stone Method
An Improved Solution
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 3
100 200 300
(E)
Ft Lauderdale 9 7 5
100 200 300
(F)
Warehouse
Req. 300 200 200 700
 Third and Final Solution
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 3
200 100 300
(E)
Ft Lauderdale 9 7 5
200 100 300
(F)
Warehouse
Req. 300 200 200 700
 MODI Method: 5 Steps
1. Compute the values for each row and column: set Ri + Kj = Cij
for those squares currently used or occupied.
2. After writing all equations, set R1 = 0.
3. Solve the system of equations for Ri and Kj values.
4. Compute the improvement index for each unused square by
the formula improvement index:
Cij - Ri - Kj
5. Select the largest negative index and proceed to solve the
problem as you did using the stepping-stone method.
 Vogel’s Approximation
♦ For each row/column of table, find difference
between two lowest costs. (Opportunity cost)
♦ Find greatest opportunity cost.
♦ Assign as many units as possible to lowest cost
square in row/column with greatest opportunity
cost.
♦ Eliminate row or column which has been
completely satisfied.
♦ Begin again, omitting eliminated rows/columns.
 Vogel’s Approximation
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 1
(D)
Evansville 8 4 3
200 300 4
(E)
Ft Lauderdale 9 7 5
300 2
(F)
Warehouse
Req. 300 200 200 700
1 3 2
 Vogel’s Approximation
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 1
(D)
Evansville 8 4 3
100 200 300 4
(E)
Ft Lauderdale 9 7 5
300 2
(F)
Warehouse
Req. 300 200 200 700
1 3
 Vogel’s Approximation
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 100 1
(D)
Evansville 8 4 3
100 200 300
(E)
Ft Lauderdale 9 7 5
300 2
(F)
Warehouse
Req. 300 200 200 700
4 3
 Vogel’s Approximation
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 3
100 200 300
(E)
Ft Lauderdale 9 7 5
200 100 300
(F)
Warehouse
Req. 300 200 200 700
 Special Problems in
Transportation Method
♦ Unbalanced Problem
♣ Demand Less than Supply
♣ Demand Greater than Supply
♦ Degeneracy
♦ More Than One Optimal Solution
 Unbalanced Problem
Demand Less than Supply
Customer 1 Customer 2 Dummy Factory
Capacity
Factory 1 8 5 16
170

Factory 2 15 10 7
130

Factory 3 3 9 10
80

Customer
Requirements 150 80 150 380
 Unbalanced Problem
Supply Less than Demand
Customer 1 Customer 2 Customer 3 Factory
Capacity
Factory 1 8 5 16
170

Factory 2 15 10 7
130

Dummy 3 9 10
80

Customer
Requirements 150 80 150 380
 Degeneracy
Customer 1 Customer 2 Customer 3 Factory
Capacity
Factory 1 5 4 3
100 100

Factory 2 8 4 3
100 20 120

Factory 3 9 7 5
80 80

Customer
Requirements 100 100 100 300
 Degeneracy - Coming Up!
Customer 1 Customer 2 Customer 3 Factory
Capacity
Factory 1 8 5 16
70 70

Factory 2 15 10 7
50 80 130

Factory 3 3 9 10
30 50 80

Customer
Requirements 150 80 50 280
 Stepping-Stone Method - The
Des Moines-to-Cleveland Route
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 Start 3
100 100
(D) - +
Evansville 8 4 3
200 100 300
(E) -
+
Ft Lauderdale 9 7 5
100 200 300
(F) + -
Warehouse
Req. 300 200 200 700
 The Assignment Method
1. subtract the smallest number in each row from every
number in that row
♣ subtract the smallest number in each column
from every number in that column
2. draw the minimum number of vertical and horizontal
straight lines necessary to cover zeros in the table
♣ if the number of lines equals the number of rows
or columns, then one can make an optimal
assignment (step 4)
 The Assignment Method
continued
3. if the number of lines does not equal the number of
rows or columns
♣ subtract the smallest number not covered by a line
from every other uncovered number
♣ add the same number to any number lying at the
intersection of any two lines
♣ return to step 2
4. make optimal assignments at locations of zeros
within the table

PG 10.13b
 Hungarian Method
Initial Table
Person Project
1 2 3
Adams 11 14 6

Brown 8 10 11

Cooper 9 12 7
 Hungarian Method
Row Reduction
Person Project
1 2 3
Adams 5 8 0

Brown 0 2 3

Cooper 2 5 0
 Hungarian Method
Column Reduction
Person Project
1 2 3
Adams 5 6 0

Brown 0 0 3

Cooper 2 3 0
 Hungarian Method
Testing Covering
Person Project Line 2

1 2 3
Adams 5 6 0
Covering
Brown 0 0 3 Line 1

Cooper 2 3 0
 Hungarian Method
Revised Opportunity Cost Table
Person Project
1 2 3
Adams 3 4 0

Brown 0 0 5

Cooper 0 1 0
 Hungarian Method
Testing
Covering Covering
Person Line 1 Project Line 3
1 2 3
Adams 3 4 0

Brown 0 0 5 Covering
Line 2
Cooper 0 1 0
 Hungarian Method
Assignments
Person Project
1 2 3
Adams 6

Brown 10

Cooper 9