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The transportation problem is a particular class of linear programming which is associated with

day to day activities in our real life and mainly deals with logistic activities. It is originally known

as Hitchcock distribution problems. It plays a vital role in our society. The price of the

commodities of a company mostly depends on the transportation system. It helps in solving

problems in distribution and transportation of resource from one place to another.

Transportation model deals with transferring goods from sources ( e.g. factories) to destinations

(e.g. ware houses). The objective of the transportation model is to determine the amount to be

shipped from each source to each destination so as to maintain the supply and demand

requirements at the lowest transportation cost.

Transportation models or problems are primarily concerned with the optimal (best possible) way

in which a product produced at different factories or plants (called supply origins) can be

transported to a number of warehouses (called demand destinations). The total transportation

cost, distribution cost or shipping cost and production costs are to be minimized by applying the

model.

Transportation cost minimization has become as one of the important issues in business

activities. Transportation modeling can help to find an optimal solution and save the costs in

transportation activities.

But, there are so many factors need to consider determining transportation cost more

effectively, such as fuel cost, types of vehicles, undue problems, transportation time etc. In case

of military operations where weapons need to reach in time or perishable goods where goods

need to reach the market in time and also in case of swift marketing to achieve the most profit

etc. the transportation time is significantly important matter.

Background of the transportation model

American mathematician F.L. Hitchcock developed the basic transportation problem in 1941.

That year he has presented a study entitled The Distribution of a Product from several sources

to Numerous Localities. That was first contribution to the solution of transportation problems. In

1947, T.C Koopmans presented a study called Optimum Utilization of the Transportation

System. These two studies are mainly cause for the development of transportation model

which contains a number of sources and another number of destinations. Each source has a

certain capacity while each destination has certain requirement associated with certain cost of

transportation from each source to each destination. The objective is to minimize transportation

cost while meeting the requirements at the destination.

The mathematical model of transportation problem

Transportation problems in general are concerned with distributing any commodity from any

group of supply centre, called sources, to any group of receiving centre, called destinations.

Mathematically a transportation problem is nothing but a special linear programming problem.

The objective of the model is to determine the amount to be shipped from each source to each

destination such that total transportation cost is minimized.

Each source has a fixed supply of units, where the entire supply must be distributed to the

destinations. Similarly, each destination has fixed demand of units, where the entire demand

must be received from the sources.

In general problem is represented by the network in the following figure.

There are m sources and n destinations, each represented by a node. The arcs joining the

source and a destination represent the route through which the commodity is transported.

s

i

=The amount of supply at source i

d

j

=The amount of demand at destination j.

c

ij

=The transportation cost per unit commodity distributed from the source i to destination j.

x

ij

=The amount of commodities to be transported from source i to destination j.

z = The total transportation cost.

Total transportation cost of all allocation i.e. the sum of x

ij

multiplied by the respective cost c

ij

must be minimal.

Then mathematically, the linear programming model representing the transportation problem is

given generally as

Minimize z =

=

m

i 1

=

n

j 1

c

ij

x

ij

.

Subject to

=

m

i 1

x

ij

s

i

. i = 1,2, m

=

n

j 1

x

ij

d

j

. j = 1,2, ..n

x

ij

0. for all i and j

cmn : xmn

1

2

1

m

2

n

Units of

supply Units of

demand

Sources

Destinations

c11 : x11

s

1

x

1

1

s

2

x

1

1

s

m

x

1

1

d

1

x

1

1

d

2

x

1

1

d

n

x

1

1

where the values of c

ij

, x

ij

can be written as a matrix form

c

ij

= c

11

c

12

------- c

1n

x

ij

= x

11

x

12 -------

x

1n

c

21

c

22 -------- ---

c

2n

x

21

x

22 --------

x

1n

-- - -- -- --- -- -- -- - - - - - -- - -

c

m1

c

m2 -----------

c

mn

x

mn

x

m2 ------

x

mn

and cost and requirements table for the transportation model: (Cost per unit distributed)

Sources Destinations Supply

1 2 3 -- n

1 c

11

c

12

c

13

-- c

1n

s

1

2 c

21

c

22

c

23

-- c

2n

s

2

3 c

31

c

32

c

33

-- c

3n

s

3

m c

m1

c

m2

c

m3

-- c

mn

s

m

Demand d

1

d

2

d

3 --

d

n

The first set of constraints stipulates that the sum of the shipments from a source cannot exceed

its supply. Similarly, the second set requires that the sum of the shipments to a destination must

satisfy its demand.

In addition, we can minimize time

t

ij

=The amount of time commodity to be transported from source i to destination j.

T=The total transportation time.

Minimize T =

=

m

i 1

=

n

j 1

t

ij

.

Subject to

=

n

j 1

x

ij

s

i

. i = 1,2, m

=

m

i 1

x

ij

d

j

. j = 1,2, ..n

x

ij

0. for all i and j

The two sets of constraints will be consistent that is the total supply

=

m

i 1

s

i

must be equal to the

total demand

=

n

j 1

d

j

. i.e. (

=

m

i 1

s

i

=

=

n

j 1

d

j

). This may be verified by observing that the restrictions

require that both

=

m

i 1

s

i

and

=

n

j 1

d

j

. are equal to

=

m

i 1

x

ij

. i.e.

=

m

i 1

x

ij

= s

i

. i = 1,2, m

=

n

j 1

x

ij

= d

j

. j = 1,2, ..n

x

ij

0. for all i and j

In real life it is not necessarily true that supply equal demand. However, a transportation model

can always be balanced.

Formulation of the transportation model as a linear programming problem

Let us consider P denote the plant (factory) where goods are being manufactured and W denote

the warehouse (godown) where the finished product are stored by the company before shipping

the various destinations.

Again let

c

ij

=The transportation cost per unit commodity distributed from source i to destination j.

x

ij

=The amount of commodities to be transported from source i to destination j.

z = The total transportation cost.

Objective function: The objective function can be represented as,

Minimize z= c

11

x

11

+ c

12

x

12

+ c

13

x

13

+ c

21

x

21

+.. + c

m1

x

m1

+ + c

mn

x

mn

from a plant to a

warehouse.

Where, supply constraints : x

11

+

x

12

++ x

1n

= s

1

x

21

+

x

22

++ x

2n

= s

2

x

m1

+

x

m2

+ + x

mn

= s

m

and demand constraints : x

11

+

x

21

++ x

m1

= d

1

x

12

+

x

22

++ x

m2

= d

2

x

1n

+

x

2n

++ x

mn

= d

n

- If supply demand , a dummy supply variable is introduced in the equation to make it

equal to demand.

- If demand supply , a dummy demand variable is introduced in the equation to make it

equal to supply.

Balanced Transportation Problem

A transportation problem said to be balanced if the total supply is equal to the total demand. i.e

=

m

i 1

s

i

=

=

n

j 1

d

j

where

=

m

i 1

s

i

is the total quantity of supply and

=

n

j 1

d

j

is the total quantity of

demand.

Unbalanced Transportation Problem

A transportation problem is said to be unbalanced if total supply does not equal to the total

demand. i.e.

=

m

i 1

s

i

=

n

j 1

d

j

where

=

m

i 1

s

i

is the total quantity of supply and

=

n

j 1

d

j

is the total quantity of

demand.

The unbalanced transportation problem can be changed into a balanced problem by introducing

a dummy plant (or supply center) or warehouse (or destination) depending on the following two

cases.

Case -1: An extra warehouse should be added in the solution table if

In this case, surplus supply will be allocated to the dummy warehouse with zero transportation

cost per unit from each plant to that warehouse.

Case -2: An extra plant (factory should) be added in the solution table if

In this case, the extra demand is taken as the supply available at the dummy plant with zero

transportation cost per unit from this plant to each warehouse.

Matrix Terminologies

The matrix used in the transportation models consists of squares called cells, which when

stacked from columns vertically and rows horizontally.

The cell located at the intersection of a row and a column is designated by its row and column

heading. Thus the cell located at the intersection of row a

1

and column b

1

is called cell (a

1,

b

1

).

Unit costs and transportation times are placed in each cell

Sources Destinations Supply

b

1

b

2

b

3

-- b

n

a

1

c

11

c

12

c

13

-- c

1n

s

1

a

2

c

21

c

22

c

23

-- c

2n

s

2

a

3

c

11

c

11

c

33

-- c

3n

s

3

a

m

c

m1

c

m2

c

m3

-- c

mn

s

m

Demand d

1

d

2

d

3 --

d

n

Example-1 (Balanced transportation model)

The MK auto company has three production centres in Dhaka, Chittagong and Rajshahi. Its

major distribution centre are located in Commilla and Bogra. The capacities of the three

plants/centres during the next quarter are 1000, 1500 and 1200 cars. The quarterly demands at

the two distribution centre are 2300 and 1400 cars. The transportation cost per car per kilometer

is approximately 0.08 taka and time per kilometer is approximately 0.50 minute.

The kilometer chart between the production and distribution centre is given below.

Destination

Source

Commilla Bogra

Dhaka 1000 2690

Chittagong 1250 1350

Rajshahi 1275 850

The chart of the transportation cost per car

Destination

Source

Commilla (1) Bogra (2)

Dhaka (1) 80 215

Chittagong (2) 100 108

Rajshahi (3) 102 68

The chart of the transportation time (in hour)

Destination

Source

Commilla (1) Bogra (2)

Dhaka (1) 8 22

Chittagong (2) 10.25 11.25

Rajshahi (3) 10.50 7

Let x

ij

represent the number of cars transported from source i to destination j. Since the total

supply (1000+1500+1200=3700) happens to equal the total demand (2300+1400=3700), the

resulting transportation model is balanced.

Hence the linear programming model is

Minimize z = 80x

11

+ 215x

12

+100x

21

+108x

22

+102x

31

+68x

32

Subject to x

11

+ x

12

= 1000

x

21

+ x

22

= 1500

x

31

+ x

32

= 1200

x

11

+ x

21

+ x

31

= 2300

x

12

+ x

22

+ x

32

= 1400

x

ij

0. for all i and j

A more compact method for representing the transportation model is to use what we call the

transportation tableau. It is a matrix form with its rows representing the sources and its column

representing the destination.

The MK transportation model is

Destination

Source

Commilla (1) Bogra (2) Supply

Dhaka (1) 8 80

x

11

22 215

x

12

1000

Chittagong (2) 10.25 100

x

21

11.25 108

x

22

1500

Rajshahi (3) 10.50 102

x

31

7 68

x

32

1200

Demand 2300 1400 3700

Example-2 (Unbalanced transportation model)

Suppose, the Chittagong plant capacity is 1300 cars instead of 1500 cars. Since the total supply

(1000+1300+1200=3500) happens not equal the total demand (2300+1400=3700). Thus the

resulting transportation model is said to be unbalanced. This unbalanced situation means that it

will not be possible to fill all the demand at the distribution centre. Because the demand exceeds

the supply, a dummy source (plant) with a capacity of 200 cars (3700-3500) is added to balance

the transportation model. The unit transportation costs from the dummy plant to the two

destinations are zero because the plant does not exist. The following table shows that the

balanced model under the new capacity restriction of the Chittagong plant. The dummy plant

has a capacity of 200 cars.

Destination

Source

Commilla (1) Bogra (2) Supply

Dhaka (1) 80

215

1000

Chittagong (2) 100

108

1300

Rajshahi (3) 102

68

1200

Dummy plant 0 0 200

Demand 2300 1400 3700

In similar manner, if the demand of Commilla destination is 1900 cars instead of 2300 cars.

Since the total demand (1900+1400=3300) happens not equal the total supply

(1000+1500+1200=3700). Thus the resulting transportation model is said to be unbalanced.

This unbalanced situation means that it will be possible to fill all the demands at the distribution

centre also surplus quantity of cars remain at that supply centre. Because the supply exceeds

the demand, a dummy destination (distribution centre) to receive the surplus supply of 400 cars

(3700-3300) is added to balance the transportation model.

The unit transportation costs to the dummy distribution centre are zero. The following table

shows that the balanced model under the new capacity restriction of the Commilla destination.

The dummy distribution centre has a capacity of 400 cars.

Destination

Source

Commilla (1) Bogra (2) Dummy dis

n

centre

Supply

Dhaka (1) 80

215

0 1000

Chittagong

(2)

100

108

0 1300

Rajshahi (3) 102

68

0 1200

Demand 2300 1400 400 3700

Example-3 (Multicommodity transportation model)

The MK Company produces four different models M1, M2, M3 and M4 of cars. The Dhaka plant

produces model M3 and M4, Chittagong plant produces model M1, M2 and M4, Rajshahi plant

produces model M1 and M2. The capacities of the various plants and the demands of the

distribution centre are given below.

Source and

Destination

Models of Car

Supply M1 M2 M3 M4

Dhaka (1)

700 300 1000

Chittagong

(2)

500

600

400 1500

Rajshahi (3) 800 400

1200

Commilla (1) 700 500 500 600 2300

Bogra (2) 600

500 200 100 1400

Let us consider the transportation rate remains 0.08 taka per kilometer for all models. To

account for the multiple car models, we view the transportation problem in the following manner.

Instead of considering each plant as one source, we now subdivide it into a number of sources

equal to the number of models it produces. Similarly, each distribution centre may be viewed as

consisting of four receiving stations representing the four models. The result of the situation is

that we have seven sources and eight destinations. The complete independence of the different

models we should be able to represent the problem for each car model by a separate, yet such

smaller transportation tableau. The transportation model are given below

Source &

Destination

Commilla Bogra Supply

Chittagong 100 108 500

Rajshahi 102 68 800

Demand 700 600 1300

Source &

Destination

Commilla Bogra Supply

Chittagong 100 108 600

Rajshahi 102 68 400

Demand 500 500 1000

Source &

Destination

Commilla Bogra Supply

Dhaka 80 215 700

Demand 500 200 700

Source &

Destination

Commilla Bogra Supply

Dhaka 80 215 300

Chittagong 100 108 400

Demand 600 100 700

Thus we provide a complete representation of the transportation tableau.

Source &

Destination

Commilla Bogra Supply

M1 M2 M3 M4 M1 M2 M3 M4

Dhaka

M3 80 215

700

M4 80 215

300

Chittagong

M1 100 108

500

M2 100 108

600

M4 100

108 400

Rajshahi M1 102 68

800

M2 102 68

400

Demand 700 500 500 600 600 500 200 100

Example-4 (Production inventory transportation model)

A company is developing a master plan for the production of an item over a four months

(January to April) period. The demands for the four months are 100, 200, 180 and 300 units

respectively. It is estimated that the production capacity for the next four months are 50, 180,

280 and 270 units respectively.

Model M1

Model M2

Model M3

Model M4

A current months demand may be satisfied in one of three ways.

1. Production in the current month.

2. Surplus production in the earlier month held in stock for later consumption.

3. Surplus production in a later month backordered for preceding months.

In the first case, the production cost per unit is tk 40.00. The second case incurs an additional

holding cost of tk 0.50 per unit per month. In the third case, an additional penalty cost of tk 2.00

per unit is incurred for each month delay.

The objective is to devise the minimum cost production inventory plan. The equivalence

between the elements of the production and the transportation system is established as follows.

Transportation system Production system

1. Source i Production period i

2. Destination j Demand period j

3. Supply amount at source i Production capacity of period i

4. Demand at destination j Demand per period j

5. Unit transportation cost from

source i to destination j

Unit cost (production, inventory,

penalty) from period i to j

c

ij

is the unit transportation cost from period i to period j, that is

c

ij

=

+

+

j to i f rom t penalty i in t oduction

j to i f rom t holding i in t oduction

i in t oduction

cos cos Pr

cos cos Pr

cos Pr

Thus the definition of c

ij

indicates that the production in period i for the same period (i = j) will

result in production cost only. If period i produces for future periods (i j), an additional holding

cost is incurred. Similarly, production in i to fill backorders (i j) incurs an additional penalty

cost.

c

11

= 40.00 c

12

= 40.00 + 0.50 = 40.50 c

24

= 40.00 + 0.50 +0.50 = 41.00

c

41

= 40.00 + 2.00 + 2.00 + 2.00 = 46.00

The resulting transportation model is given below

Period January 1 February 2 March 3 April 4 Supply

January 1 40.00 40.50 41.00 41.50 50

February 2 42.00 40.00 40.50 41.00 180

March 3 44.00 42.00 40.00 40.50 280

April 4 46.00 44.00 42.00 40.00 270

Demand 100 200 180 300

i=j

i j

i j

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