TRANSPORTATION PROBLEM

3 October 2020
FINDING OPTIMAL SOLUTION

STEPPING-STONE METHOD
ALGORITHM:
Step (1) Choose an empty cell corresponding to non-basic variable.
Step (2) Traced a closed loop for the selected empty cell.
To trace a closed loop, start from the selected empty cell and move to an allocated
cell (only horizontal and vertical movements are allowed and no diagonals). Change
of direction is only possible at the allocated cells. It is acceptable to jump over empty
cells as well as occupied cells. Continue this process until you finally come back to
the starting point. You can either move clock-wise or anti-clockwise direction. There
will always be one and only one loop for each empty cell.

z
Step (3) Put plus (+) and minus (−) sign alternatively at the corners of the loop, beginning
Na
with the plus sign at the selected empty cell.
Step (4) Determine the net change in costs by adding/subtracting up the costs corresponding
to the corners of the loop.
Step (5) Repeat the above steps until all the net change has been determined for each empty
a
cell/non-basic variables.
ib

Step (6) Test the solution for optimality

If all the net change is greater than or equals to zero, an optimal solution has been
achieved. If not, choose the variable with the most negative net change and go to
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Step (7). Ties can be broken arbitrarily.

Step (7) Find a new improved solution
Allocate θ in that cell and reconsider the closed loop beginning from that cell. Add θ
or subtract θ from the allocated values, alternatively, lying at the corners of the loop.
Determine the maximum quantity that can be assigned to θ so that the values at the
corners of the loop are all non-negative. After finding the maximum value of theta
adjust the remaining values in that loop involving θ.
Step (8) Repeat all the above steps until optimal solution is found.
Example 1 (Previous Year). Solve the cost minimizing transportation problem:

D1 D2 D3 D4 Supply
S1 19 30 50 10 7
S2 70 30 40 60 9
S3 40 8 70 20 18
Demand 5 8 7 14
Soln. Since 5 + 8 + 7 + 14 = 34 and 7 + 9 + 18 = 34, therefore the given problem is balanced
transportation problem.

Also m = 3 and n = 4. Therefore number of basic feasible solutions = m + n − 1 =

3 + 4 − 1 = 6.

D1 D2 D3 D4 Supply Row Penalty

19 30 50 10

S1 7

70 30 40 60

S2 9

40 8 70 20

S3 18

z
Demand 5 8 Na 7 14
Column Penalty
a
ib

D1 D2 D3 D4 Supply
19 30 50 10
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S1 5 2 7

70 30 40 60

S2 7 2 9

40 8 70 20

S3 8 10 18

Demand 5 8 7 14

The starting basic feasible solution is x11 = 5, x14 = 2, x23 = 7, x24 = 2, x32 = 8, x34 = 10 and
the associated minimum cost is:
z = 779.
Also the solution is non-degenerate.

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 Non-Basic Variables Net Increase/Decrease in Cost
x12 +30 − 10 + 20 − 8 = +32
x13 +50 − 10 + 60 − 40 = +60
x21 +70 − 19 + 10 − 60 = +1
x22 +30 − 60 + 20 − 8 = −18 ←
x31 +40 − 20 + 10 − 19 = +11
x33 +70 − 20 + 60 − 40 = +70
Therefore x22 will now enter the basis.

D1 D2 D3 D4 Supply
19 30 50 10

S1 5 2 7

z
70 30 40 60

S2 θ
Na 7 2−θ 9

40 8 70 20

S3 8−θ 10 + θ 18
a
Demand 5 8 7 14
ib

2−θ ≥0
8−θ ≥0
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=⇒ θ = 2

D1 D2 D3 D4 Supply
19 30 50 10

S1 5 2 7

70 30 40 60

S2 2 7 9

40 8 70 20

S3 6 12 18

Demand 5 8 7 14

The basic feasible solution is x11 = 5, x14 = 2, x22 = 2, x23 = 7, x32 = 6, x34 = 12 and the
associated minimum cost is:
z = 743.

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 Non-Basic Variables Net Increase/Decrease in Cost
x12 +30 − 10 + 20 − 8 = +32
x13 +50 − 10 + 20 − 8 + 30 − 40 = +42
x21 +70 − 19 + 10 − 20 + 8 − 30 = +19
x24 +60 − 20 + 8 − 30 = +18
x31 +40 − 19 + 10 − 20 = +11
x33 +70 − 40 + 30 − 8 = +52

Since all the net cost are non-negative, therefore the optimum solution is z = 743, that is, the
total minimum transportation cost of the transportation problem is z = 743.

MODIFIED DISTRIBUTION METHOD (MODI or UV-METHOD)

Example 2. Solve the following cost minimizing transportation problem.

z
D1 D2 D3
Na D4 Availability
S1 4 6 8 8 40
S2 6 8 6 7 60
S3 5 7 6 8 50
Demand 20 30 50 50
a
ib

Soln. Since 20 + 30 + 50 + 50 = 150 and 40 + 60 + 50 = 150, therefore the given problem is

balanced transportation problem.
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Also m = 3 and n = 4. Therefore number of basic feasible solutions = m+n−1 = 3+4−1 =

6. We will use Vogel Approximation Method to find the starting basic feasible solution.

D1 D2 D3 D4 Supply
4 6 8 8

S1 20 20 40

6 8 6 7

S2 50 10 60

5 7 6 8

S3 10 40 50

Demand 20 30 50 50

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The starting basic feasible solution is x11 = 20, x12 = 20, x23 = 50, x24 = 10, x32 = 10, x34 = 40
and the associated minimum cost is:
z = 960
Also, this basic feasible solution is non-degenerate.

v1 = 4 v2 = 6 v3 = 6 v4 = 7
D1 D2 D3 D4 Supply
4 6 8 8

u1 = 0 S1 20 20 (2) (1) 40

6 8 6 7

u2 = 0 S2 (2) (2) 50 10 60

5 7 6 8

z
u3 = 1 S3 (0) 10 (−1) 40 50

Demand 20 30
Na 50 50

Since c33 − (u3 + v3 ) = −1, therefore x33 will now enter the basis.
a
D1 D2 D3 D4 Supply
4 6 8 8
ib

S1 20 20 40
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6 8 6 7

S2 50 − θ 10 + θ 60

5 7 6 8

S3 10 θ 40 − θ 50

Demand 20 30 50 50

Now we must have

50 − θ ≥ 0 =⇒ 50 ≥ θ
40 − θ ≥ 0 =⇒ 40 ≥ θ
=⇒ θ = 40

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 D1 D2 D3 D4 Supply
4 6 8 8

S1 20 20 40

6 8 6 7

S2 10 50 60

5 7 6 8

S3 10 40 50

Demand 20 30 50 50

The basic feasible solution is x11 = 20, x12 = 20, x23 = 10, x24 = 50, x32 = 10, x33 = 40 and
the associated minimum cost is:
z = 920

z
v1 = 4
Na
v2 = 6 v3 = 5 v4 = 6
D1 D2 D3 D4 Supply
4 6 8 8
a
u1 = 0 S1 20 20 (3) (2) 40
ib

6 8 6 7

u2 = 1 S2 (1) (1) 10 50 60
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5 7 6 8

u3 = 1 S3 (0) 10 40 (1) 50

Demand 20 30 50 50

Since all cij − (ui + vj ) ≥ 0, therefore we have obtained an optimal solution, which is,
z = 920.

But since for one of the non-basic variables the value of cij − (ui + vj ) is zero, therefore this
is a case of alternate optimum solution.

Hence x31 will now enter the basis

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 D1 D2 D3 D4 Supply
4 6 8 8

S1 20 − θ 20 + θ 40

6 8 6 7

S2 10 50 60

5 7 6 8

S3 θ 10 − θ 40 50

Demand 20 30 50 50
Now we must have
20 − θ ≥ 0 =⇒ 20 ≥ θ
10 − θ ≥ 0 =⇒ 10 ≥ θ

z
=⇒ θ = 10
Na
D1 D2 D3 D4 Supply
4 6 8 8

S1 10 30 40
a
6 8 6 7
ib

S2 10 50 60
Ad

5 7 6 8

S3 10 40 50

Demand 20 30 50 50
The basic feasible solution is x11 = 10, x12 = 30, x23 = 10, x24 = 50, x31 = 10, x33 = 40 and
the associated minimum cost is:
z = 920
which is again an optimal solution.

ALGORITHM:
Step (1) Assign a value ui and vj to each row and column of the transportation problem. Values
are assigned in such a way that
ui + vj = cij
for the allocated cells. For consistency, take u1 = 0.
Step (2) Calculate the net increase/decrease in cost for each empty cells using the values of ui
and vj such that
Net Cost = cij − (ui + vj )

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Step (3) Test the solution for optimality
If all the net change is greater than or equals to zero, an optimal solution has been
achieved. If not, choose the variable with the most negative net change and go to
Step (1). Ties can be broken arbitrarily.

Step (4) Find a new improved solution

Allocate θ in that cell and consider the closed loop beginning from that cell. Add θ
or subtract θ from the allocated values, alternatively, lying at the corners of the loop.
Determine the maximum quantity that can be assigned to θ so that the values at the
corners of the loop are all non-negative. After finding the maximum value of theta
adjust the remaining values in that loop involving θ.

Step (5) Repeat all the above steps until optimal solution is found.

Example 3 (Previous Year). Solve the cost minimizing transportation problem:

D1 D2 D3 D4 Supply

z
S1 19 30 50 10 7
S2
S3
70
40
30
8
Na 40
70
60
20
9
18
Demand 5 8 7 14
a
ib
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