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Learning Objectives:
- Describe, illustrate, and explain transportation and assignment models.
- Devise special linear programming problems using the transportation and assignment models,
- Define a balanced transportation problem,
- Be capable to execute transportation and assignment model calculations
- Generate and perform qualitative decision making techniques in transportation models.
4.1 Introduction
The Transportation and Assignment problems deal with assigning sources and jobs to destinations and
machines.
- There is a type of linear programming problem that may be solved using a simplified version of
the simplex technique called transportation method.
Since its foremost function and purpose in solving problems concerning quite a number of product
sources and several destinations of products, this kind of problem is commonly labeled as transportation
problem.
- It obtains its appellation from its treatment to problems concerning transporting products from
several sources to several destinations.
While the structure can be used to correspond to more general assignment and scheduling problems in
addition to transportation and distribution problems, the two (2) common objectives of such problems
are either:
1. Minimize the cost of shipping m units to n destinations or,
2. Maximize the profit of shipping m units to n destinations.
In broad spectrum, transportation problem is concerned with establishing a most favorable approach for
dispensing and allocating a commodity from a cluster of supply hubs, like industrial plants or factories,
identified as sources to various receiving centers, like depots and warehouses, identified as
destinations, with the intention to reduce or minimize significantly the total distribution costs.
Each every provider is able to supply a fixed number of units of the product, usually called the capacity
or availability, and each destination has a fixed demand, often called the requirement.
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
The figures indicated at the upper right corner of each section corresponds to the cost of transportation
(1 2 3 → A B C)
Note further that A, B, and C are the points of destination. The figures below denote the quantity
demanded.
Step 2. Fill in the corresponding values for each cell given the limitation set by both demand and supply.
Note. The number of used cells must be equal to the number of rows added to the number of column
minus 1.
Number of used cells = (R + C) – 1
Since only a total of 200 is the required demand for column A, the excess of 20 will be distributed or
allocated to the next cell (1B), giving a total of 220 for supply.
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For 2B, a total of 270 is required for demand. 20 is already allocated in 1B, therefore it needs only 250 to
satisfy the total demand of 270. However, the total supply is 280. So, for the second row, a total of 30 is
still needed to satisfy the supply of 280. The remaining 30 will then be allocated to 2C.
For column C, a total of 280 is the required demand. We have already placed 30 in 2C, therefore, it
needs 250 more – the exact figure needed to balance supply.
Step 3. Compute for total cost. To do this, multiply the entry made in each cell to its corresponding cost
given in the case. Use all occupied cells.
1A P200 x 5 P1,000
1B P20 x 2 P40
2B P250 x 5 P1,250
2C P30 x 4 P120
3C P250 x 2 P500
Total P2,910
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Vacant Cell
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1C = 4 – 2 + 5 – 4 = 3
2A = 3 – 5 + 2 – 5 = -5
3A = 4 – 5 + 2 – 5 + 4 – 2
3B = 3 - 2 + 4 – 5 = 0
Step 5. Analyze the vacant cell with the highest negative value
1A and 2B have minus signs. Consider 1A since 200 is less than 250. This means that if a unit is
transferred to 2A, cost can be minimized by P5. If we transfer 200 to 2A, 2B will not be 50 (250 -200); 1B
will be 220 (20 + 200); 1A will be 0 (200 – 200);
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Step 8. With the construction and completion of the new table, compute for the new total cost of the
used cells.
Cost
1B P220 x 2 P440
2A P200 x 3 P600
2B P50 x 5 P250
2C P30 x 4 P120
3C P250 x 2 P500
Total P1,910
Step 9. Using the new table, compute for improvement using the vacant/unused cells just like step #4.
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Vacant cells
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Note: Since there are no more negative values generated, or the improvement has all positive results,
this means we cannot minimize or reduce the cost any further; thereby, the table is optimum.
Minimum Cost = P1,910
A Linear Programming Method to optimize delivery of goods from different sources to different
destinations.
The MODI (modified distribution) method allows us to compute improvement indices quickly for each
unused square without drawing all of the closed paths.
Modified distribution method recues the number of steps involved in the evaluation of empty cells,
thereby minimizes the complexity and gives a straightforward computational scheme through which the
opportunity cost of each empty cell can be determined.
Let us use the same example given earlier and solve it using the Modified Distribution Method.
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Step 2. Make an initial allocation with the North-West corner rule as starting point, just like in the
Stepping Stone method.
Fill in the corresponding values for each cell given the limitations set by both demand and
supply.
Note: The number of used cells must be equal to the number of rows added to the number of columns
minus 1.
Number of used cells = (R + C) – 1
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Since only a total of 200 is the required demand for column A, the excess of 20 will be distributed or
allocated to the next cell (1B), giving a total of 220 for supply.
For 2B, a total of 270 is required for demand. 20 is already allocated in 1B, therefore it needs only 250 to
satisfy the total demand for 270. However, the total supply is 280. So, for the second row, a total of 30 is
still needed to satisfy the supply of 280. The remaining 30 will then be distributed to 2C.
For column C, a total of 280 is the required demand. We have already placed 30 in 2C, therefore, it
needs 250 more – the exact figure needed to balance supply.
Step 3. Compute for total cost. To do this, multiply the entry made in each cell to its corresponding cost
given in the case. Use all occupied cells.
Cost:
1A P200 x 5 P1,000
1B P20 x 2 P40
2B P250 x 5 P1,250
2C P30 x 4 P120
Step 4. Assume V1 = 0, the computed value from occupied cell are as follows:
1A V1 + W1 = 5
1B V1 + W2 = 2 We must assume V1 = 0 to be able to solve the remaining variables
2B V2 + W2 = 5
At V1 = 0
1A = V1 + W1 = 5 2C = V2 + W3 = 4
0 + W1 = 5 3 + W3 = 4
W1 = 5 W3 = 4 – 3
W3 = 1
1B = V1 + W2 = 2 3C = V3 + W3 = 2
0 + W2 = 2 V3 + 1 = 2
W2 = 2 3=2–1
V3 = 1
2B = V2 + W2 = 5
V2 + 2 = 5
V2 = 5 – 2
V2 = 3
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Step 5. Construct the original table together with the values generated from computing V and W.
Step 6. Testing for improvement. Evaluate all unoccupied cells for the net contribution to cost. To do
this, subtract Vi and Wj from CS
1C C=4 V1 = 0 W3 = 1 1C = 4 – 0 – 1 1C = 3
2A C=3 V2 = 3 W1 = 5 2A = 3 – 3 – 5 2A = -5
3A C=4 V3 = 1 W1 = 5 3A = 4 – 1 – 5 3A = -2
3B C=3 V3 = 1 W2 = 2 3B = 3 – 1 – 2 3B = 0
2A has the highest negative value (-5).
Step 7. Construct the new table by replacing the values (assessing cell 2A)
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Step 8. With the construction of the new table, compute for the new total cost considering all occupied
cells.
Cost:
1B P220 x 2 P440
2A P200 x 3 P600
2B P50 x 5 P250
2C P30 x 4 P120
3C P250 x 2 P500
Total P1,910
Step 9. Assume V1 = 0, the compute value from occupied cell are as follows:
1B V1 + W2 = 2
2A V2 + W1 = 3 Again, let us assume V1 = 0 to be able to
2B V2 + W2 = 5 solve the remaining variables
2C V2 + W3 = 4
3C V3 + W3 = 2
At V1 = 0
1B = V1 + W2 = 2 2C = V2 + W3 = 4
0 + W2 = 2 3 + W3 = 4
W2 = 2 W3 = 4 – 3
W3 = 1
2A = V2 + W1 = 3 3C = V3 + W3 = 2
3 + W1 = 3 V3 + 1 = 2
W1 = 3 - 3 3=2–1
W1 = 0 V3 = 1
2B = V2 + W2 = 5
V2 + 2 = 5
V2 = 5 – 2
V2 = 3
Step 10. Construct the original table together with the values generated form computing V and W.
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Step 11. Testing for improvement. evaluate all VACANT cells for the net contribution to cost. To do this,
subtract Vi and Wj from Cs.
1A C=5 V1 = 0 W1 = 0 1A = 5 – 0 – 0 1A = 5
1C C=4 V1 = 0 W3 = 1 1C = 4 – 0 – 1 1C = 3
3A C=4 V3 = 1 W1 = 0 3A = 4 – 1 – 0 3A = 3
3B C=3 V3 = 1 W2 = 2 3B = 3 – 1 – 2 3B = 0
Since there are no more negative values generated in testing the improvement, this means we cannot
reduce the cost any further, thereby, the table is optimum.
Not all transportation cases are balanced. Realistically speaking and in many instances, cases involving
transportation are unbalanced. This simply means that demand is greater than supply or vice versa
(supply greater than demand). To be able to solve unbalanced transportation cases, we must find a way
to make it balanced by simply converting the table through the addition of a dummy/artificial column or
row with zero (0) as its costs.
Example
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Step 1. Construct the initial table with a dummy column (since Supply > Demand)
Step 2. Fill in the corresponding values for each cell given the limitations set by both demand and
supply.
Since only a total of 80 is the required demand for column A, the excess of 20 will be distributed or
allocated to the next cell (1B), giving a total of 100 for supply.
For 2B, a total of 120 is required for demand. 20 is already allocated in 1B, therefore it needs only 100 to
satisfy the total demand of 120. However, the total supply is only 20. So, for the second row, a total of
20 can only be allocated so as not to exceed total supply. The remaining 80 will be distributed in 3B to
satisfy total demand of 120.
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
For the dummy column C, a total of 10 is the required (the exact figure needed) to balance the entire
table. The cost is pegged at zero (0) since this is an artificial column.
Step 3. Compute for total cost. To do this, multiply the entry made in each cell to its corresponding cost
given in the case. Use all occupied cells.
Cost:
1A P 80 x 3 P240
1B P20 x 4 P80
2B P20 x 7 P140
3B P80 x 4 P320
3C P10 x 0 P0
Total P780
Vacant Cell:
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Step 8. With the construction and completion of the new table, compute for the new total cost of the
used cells.
Cost:
1A P60 x 3 P180
1B P40 x 4 P160
2A P20 x 3 P60
3B P80 x 4 P320
3C P10 x 0 P0
Total P720
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Step 9. Using the new table, compute for improvement using the vacant / unused cells just like Step 4.
Vacant cells:
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Step 10. Analyze the vacant cell with the negative value.
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1A and 3B have minus signs. If we transfer 60 to 3A, 3B will now be 20 (80 – 60); 1B Will be 100 (40 +
60); 1A will be 0 (60 – 60).
Step 13. With the construction and completion of the new table, compute for the new total cost of the
used cells.
Cost:
1B P100 X 4 P400
2A P20 X 3 P60
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3A P60 X 2 P120
3B P20 X 4 P80
3C P10 X 0 0
Total P660
Step 14. Using the new table, compute for the improvement using the vacant/unused cells.
Vacant cells:
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Step 15. Analyze the vacant cell with the negative value.
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2A and 3C have minus signs. If we transfer 10 to 2C, 3C will now be 0 (10 – 10); 2A will be 10 (20 – 10);
3A will be 70 (60 – 10).
Step 18. With the construction and completion of the new table, compute for the new total cost of the
used cells.
Cost:
1B P100 X 4 P400
2A P10 X 3 P30
2C P10 X 0 P0
3A P70 X 2 P140
3B P20 X 4 P80
Total P650
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Step 19. Using the new table, compute for improvement using the vacant/unused cells.
Vacant cells:
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Note: Since there are no more negative values generated, or the improvement has all positive results,
this means we cannot minimize or reduce the cost any further; thereby, the table is optimum.
Minimum Cost = P650
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Step 1. Make the table balanced by adding a dummy column (since Supply > Demand)
Step 2. Fill in the corresponding values for each cell given the limitations set by both demand and
supply.
Since only a total of 80 is the required demand for column A, the excess of 20 will be distributed or
allocated to the next cell (1B), giving a total of 100 for supply.
For 2B, a total of 120 is required for demand. 20 is already allocated in 1B, therefore it needs only 100 to
satisfy the total demand of 120. However, the total supply is only 20. So, for the second row, a total of
20 can only be allocated so as not to exceed total supply. The remaining 80 will be distributed in 3B to
satisfy total demand of 120.
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
For the dummy column C, a total of 10 is the required (the exact figure needed) to balance the entire
table. The cost is pegged at zero (0) since this is an artificial column.
Step 3. Compute for total cost. To do this, multiply the entry made in each cell to its corresponding cost
given in the case. Use all occupied cells.
Cost:
1A P80 X 3 P240
1B P20 X 4 P80
2B P20 X 7 P140
3B P80 X 4 P320
3C P10 X 0 P0
Total P780
Step 4. Assume V1 = 0, the computed value from occupied cell are as follows:
1A = V1 + W1 = 3 3B = V3 + W2 = 4
0 + W1 = 3 V3 + 4 = 4
W1 = 3 V3 = 4 – 4
V3 = 0
1B = V1 + W2 = 4 3C = V3 + W3 = 0
0 + W2 = 4 0 + W3 = 0
W2 = 4 W3 = 0
2B = V2 + W2 = 7
V2 + 4 = 7
V2 = 7 – 4
V2 = 3
Step 5. Construct the original table together with the values generated from computing V and W.
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Step 6. Testing for improvement. Evaluate all unoccupied cells for the net contribution to cost. To do
this, subtract Vi and Wj from Cs
Formula: Cs – Vi - Wj
1C C=0 V1 = 0 W3 = 0 1C = 0 – 0 – 0 1C = 0
2A C=3 V2 = 3 W1 = 3 2A = 3 – 3 – 3 2A = -3
2C C=0 V2 = 3 W3 = 0 2C = 0 – 3 – 0 2C = -3
3A C=2 V3 = 0 W1 = 3 3A = 2 – 0 – 3 3A = -1
2A and 2C has the highest negative value (-30). Let’s choose 2A.
Step 7. Construct the new table by replacing the values (assessing cell 2A).
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Step 8. With the construction of the new table, compute for the new total cost considering all occupied
cells.
Cost:
1A P60 X 3 P180
1B P40 X 4 P160
2A P20 X 3 P60
3B P80 X 4 P320
3C P10 X 0 P0
Total P720
Step 9. Assume V1 = 0, the computed value from occupied cell are as follows:
1A = V1 + W1 = 3 3B = V3 + W2 = 4
0 + W1 = 3 V3 + 4 = 4
W1 = 3 V3 = 4 – 4
V3 = 0
1B = V1 + W2 = 4 3C = V3 + W3 = 0
0 + W2 = 4 0 + W3 = 0
W2 = 4 W3 = 0
2A = V2 + W1 = 3
V2 + 3 = 3
V2 = 3 – 3
V2 = 0
Step 10. Construct the table together with the values generated from computing V and W.
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Step 11. Testing for improvement. Evaluate all VACANT cells for the net contribution to cost. To do this,
subtract Vi and Wj from Cs.
Formula: Cs – Vi - Wj
1C C=0 V1 = 0 W3 = 0 1C = 0 – 0 – 0 1C = 0
2B C=7 V2 = 0 W2 = 4 2B = 7 – 0 – 4 2B = 3
2C C=0 V2 = 0 W3 = 0 2C = 0 – 0 – 0 2C = 0
3A C=2 V3 = 0 W1 = 3 3A = 2 – 0 – 3 3A = -1
Step 12. Construct the new table by replacing the values (assessing cell 3A).
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Step 13. With the construction of the new table, compute for the new total cost considering all occupied
cells.
Cost:
1B P100 X 4 P400
2A P20 X 3 P60
3A P60 X 2 P120
3B P20 X 4 P80
3C P10 X 0 P0
Total P660
Step 14. Assume V1 = 0, the computed value from occupied cell are as follows:
1B V1 + W2 = 4
2A V2 + W1 = 3 Again, let us assume V1 = 0 to be able to solve the
3A V3 + W1 = 2 remaining variables.
3B V3 + W2 = 4
3C V3 + W3 = 0
V1 = 0
1B = V1 + W2 = 4 3B = V3 + W2 = 4
0 + W2 = 4 V3 + 4 = 4
W2 = 4 V3 = 4 - 4
V3 = 0
2A = V2 + W1 = 3 3C = V3 + W3 = 0
V2 + 2 = 3 0 + W3 = 0
V2 = 1 W3 = 0
3A = V3 + W1 = 2
0 + W1 = 2
W1 = 2
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Step 15. Construct the table together with the values generated from computing V and W.
Step 16. Testing for improvement. Evaluate all VACANT cells for the net contribution to cost. To do this,
subtract Vi and Wj from Cs.
Formula: Cs – Vi - Wj
1A C=3 V1 = 0 W1 = 2 1A= 3 -0 – 2 1A = 1
1C C=0 V1 = 0 W3 = 0 1C = 0 – 0 – 0 1C = 0
2B C=7 V2 = 1 W2 = 4 2B = 7 – 1 – 4 2B = 2
2C C=0 V2 = 1 W3 = 0 2C = 0 – 1 – 0 2C = -1
Step 17. Construct the new table by replacing the values (assessing cell 2C).
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Step 18. With the construction of the new table, compute for the new total cost considering all occupied
cells.
Cost:
1B P100 X 4 P400
2A P10 X 3 P30
2C P10 X 0 P0
3A P70 X 2 P140
3B P20 X 4 P80
Total P650
Step 19. Assume V1 = 0, the computed value from occupied cell are as follows:
V1 = 0
1B = V1 + W2 = 4 3A = V3 + W1 = 2
0 + W2 = 4 0 + W1 = 2
W2 = 4 W1 = 2 - 0
W1 = 2
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
2A = V2 + W1 = 3 3B = V3 + W2 = 4
V2 + 2 = 3 V3 + 4 = 4
V2 = 1 V3 = 0
2C = V2 + W3 = 0
1 + W3 = 0
W3 = -1
Step 20. Construct the table together with the values generated from computing V and W.
Step 21. Testing for improvement. Evaluate all VACANT cells for the net contribution to cost. To do this,
subtract Vi and Wj from Cs.
Formula: Cs – Vi - Wj
1A C=3 V1 = 0 W1 = 2 1A= 3 -0 – 2 1A = 1
1C C=0 V1 = 0 W3 = -1 1C = 0 – 0 – (-1) 1C = 1
2B C=7 V2 = 1 W2 = 4 2B = 7 – 1 – 4 2B = 2
3C C=0 V3 = 0 W3 = -1 3C = 0 – 0 – (-1) 3C = 1
Since there are no more negative values generated in testing the improvement this means we cannot
reduce the cost any further; thereby, the table is optimum.
Minimum Cost = P650
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Example: Listed are 4 siblings and their corresponding performance in terms of time (in minutes) in
doing certain tasks. Determine who among the siblings can do a certain job faster in comparison to the
others.
Cooking Baking Gardening Cleaning
Abigail 90 88 88 80
Theresa 95 85 87 90
Gladys 85 86 87 90
Wilma 80 90 85 86
Step 1. Determine the smallest value in each row. Subtract the values in each cell with that smallest
value.
Step 2. Subtract the smallest number in each column from all the numbers in the column.
Cooking Baking Gardening Cleaning
Abigail 10 8 6 0
Theresa 10 0 0 5
Gladys 0 1 0 5
Wilma 0 10 3 6
Step 4. Since only one chore can be assigned for every person, and no repetition is allowed, carefully
decipher the outcome of the assignment done.
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OPERATIONS RESEARCH for Business Management by Lorma S.L. San Pedro COPYRIGHT 2017
Final Decision
Abigail Cleaning
Theresa Baking
Gladys Gardening
Wilma cooking
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