TYPES OF TRANSPORTATION PROBLEMS:

Transportation problem can be classified into two types:-

I. Balanced Transportation Problems
II. Unbalanced Transportation Problems

I. Balanced Transportation Problems - When the total supplies of all the sources are equal to the
total demand of all destinations, the problem is a balanced transportation problem.

II. Unbalanced Transportation Problems – When the total supply of all the sources is not equal to
the total demand of all destinations, the problem is an unbalanced transportation problem.
Total supply ≠ Total demand

Demand Less than Supply

In real life, demand and supply requirements will rarely be equal. This is of variation in
production from the supplier end, and variation in forecast from the consumer end. Supply variations
maybe because of shortage of raw materials labour problems, Transportation Model improper planning
and scheduling. Demand variations may be because of change in customer preference, change in prices
and introduction of new products by competitors.

These unbalanced problems can be easily solved by introducing dummy sources  and dummy

destinations. If the total supply is greater than the total demand, a dummy destination (dummy
column) with demand equal to the supply surplus is added. If the total demand is greater than the total
supply, a dummy source (dummy row) with supply equal to the demand surplus is added. The unit
transportation cost for the dummy column and dummy row are assigned zero values, because no
shipment is actually made in case of a dummy source and dummy destination.

Transportation Model with Supply Exceeding Demand

 Solution:  For the given problem, the total supply is not equal to the total demand.

The given problem is an unbalanced transportation problem. To convert the unbalanced

transportation problem into a balanced problem, add a dummy destination (dummy column). i.e., the
demand of the dummy destination is equal to,

Thus, a dummy destination is added to the table, with a demand of 100 units. The modified
table is shown in Table which has been converted into a balanced transportation table. The unit costs of
transportation of dummy destinations are assigned as zero.

Dummy Destination Added

Similarly,
 Demand Greater than Supply
Example : Convert the transportation problem shown in Table into a balanced problem.
Demand Exceeding Supply

Solution: The given problem is,

The given problem is an unbalanced one. To convert it into a balanced transportation

problem, include a dummy source (dummy row) as shown in Table
Balanced TP Model