BIET – MBA Programme, Davangere

Operation Research

-: Working Manual:-

Unit – 3
Transportation Problem

Name of the student:

Section:
USN Number:

1
Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

Transportation Problem
Transportation Problem is a particular case of LPP used to minimise the transportation cost
involved in transporting goods from “m” different origins to “n” different destinations under
the existing supply and demand constraints.

It is to transport various amounts of a single homogeneous commodity, that are initially

stored at various origins, to different destinations in such a way that total transportation cost
is minimum.

The cost of transporting one unit of the commodity from each source to each destination is
also known. The commodity is to be transported from various sources to different
destinations in such a way that the requirement of each destination is satisfied and at the
same time the total cost of transportation in minimized.

Example: Pepsi has manufacturing unit at 4 cities in Karnataka and distributes more than 40
distribution centres.

A typical transportation problem contains

• Inputs:

• Sources with availability (Supply)

• Destinations with requirements (Demand)

• Unit cost of transportation from various sources to destinations (Cost)

• Objective:

• To determine schedule of transportation to minimize total transportation cost.

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

A transportation problem can be stated mathematically as follows:

Let there be ‘m’ SOURCES and ‘n’ DESTINATIONS

Let 𝑎𝑖 : the availability at the 𝑖 𝑡ℎ source

𝑏𝑗 : The requirement of the 𝑗 𝑡ℎ destination.

𝑐𝑖𝑗 : The cost of transporting one unit of commodity from the 𝑖 𝑡ℎ source to the 𝑗 𝑡ℎ
destination

𝑥𝑖𝑗 : The quantity of the commodity transported from 𝑖 𝑡ℎ source to the 𝑗 𝑡ℎ

destination (i=1, 2, …… m; j=1,2, …..n)

𝑹𝒆𝒑𝒓𝒆𝒔𝒆𝒏𝒕𝒂𝒕𝒊𝒐𝒏 𝒐𝒇 𝑮𝒆𝒏𝒆𝒓𝒂𝒍 𝑻𝒓𝒂𝒏𝒔𝒑𝒐𝒓𝒕𝒂𝒕𝒊𝒐𝒏 𝑷𝒓𝒐𝒃𝒍𝒆𝒎

Destinations Supply /
Availability
𝑫𝟏 𝑫𝟐 𝑫𝟑 𝑫𝒏
𝑺𝟏 X11 X12 X13 X1n 𝑎1
𝐶11 𝐶12 𝐶13 𝐶1𝑛
𝑺𝟐 X21 X22 X23 X2n 𝑎2
𝐶21 𝐶22 𝐶23 𝐶2𝑛
𝑺𝟑 X31 X32 X33 X1n 𝑎3
Origin /
𝐶31 𝐶32 𝐶33 𝐶3𝑛
Sources
.
.
𝑺𝒎 Xm1 Xm2 Xm3 Xmn 𝑎𝑚
𝐶𝑚1 𝐶𝑚2 𝐶𝑚3 𝐶𝑚𝑛
Demand / 𝑏1 𝑏2 𝑏3 𝑏𝑛 𝑎𝑚 = 𝑏𝑛
Requirements

The problem is to determine the values of xij such that total cost of transportation is
minimized.

We assume that the total quantity available is the same as the total requirement. i.e. Σai = Σbj

• Balanced transportation problems

• Unbalanced transportation problems

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

Feasible Solution:

Any set of non-negative allocations which satisfies the row and column sum (Rim
Requirements) is called as feasible solution.

The feasible solution is called a basic feasible solution if the number of non-negative
allocations are equal to m+n-1, where “m” is the number of rows, “n” is the number of column
in a transportation table.

Non-Degenerate Basic Feasible Solution:

Any basic feasible solution to a transportation problem containing “m” Origins and “n”
Destinations is said to be non-degenerate, if it contains “m+n-1” occupied cells and each
allocation is in independent positions.

The allocation are said to be in independent positions, if it is impossible to form a closed path.

Closed path means by allowing horizontal and vertical lines and all the corner cells are
occupied.

Degenerate Basic Feasible Solution:

If a basic feasible solution contains less than m+n-1 non negative allocations, it is said to be
degenerate.

Solution to Transportation Problem.

Transportation problem can be solved in 3 Phases

I. To find the Initial Basic Feasible Solution (IBFS) using any of the following
methods
A. North West Corner method
B. Least Cost Method
C. Vogel’s Approximation Method

II. Test the IBFS for Optimality using Modified Differences (Modi) / UV Method

III. Optimise Solution using Stepping stone algorithm method

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

Initial Basic Feasible Solution (IBFS) by North West Corner Method (NWCM):
Step 1: Locate the cost situated at North West Corner of given cost matrix and allocate
quantity “Xij” such that it is min (Corresponding ai , bj )

Step 2: Again allocate the North West cell in reduced cost matrix and allocate as before
(Step 1)

Step 3: Continue allocating until all allocations exhaust

1: Find the IBFS by North West Corner Method

D1 D2 D3 D4 Supply
O1
5 3 1 2 30
O2
2 6 3 1 20
O3
6 3 1 5 40
O4
6 1 2 3 10
Demand
20 35 25 20 100

Note: If IBFS or Any Solution to Transportation Problem contains m+n-1 allocated cells then
solution is said to be non-degenerated (IBFS can be further improved for optimization)
Where m – No of rows, n – No of Columns of the given TP.

2: Obtain IBFS by North West Corner Method

P Q R S Supply

A 12 10 12 13 500

B 7 11 8 14 300

C 6 16 11 7 200

Demand 180 150 350 320 1000

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

3: Obtain IBFS by North West Corner Method

P Q R S Supply

A 6 4 1 5 14

B 8 9 2 7 16

C 4 3 6 2 5

Demand 6 10 15 4

4: Obtain IBFS by North West Corner Method

A B C D Supply

P 19 30 50 10 7

Q 70 30 40 60 9

R 40 8 70 20 18

Demand 5 8 7 14

5: Obtain IBFS by North West Corner Method

X Y Z Supply

A 50 40 80 400

B 80 70 40 400

C 60 70 60 500

D 60 60 60 400

E 30 50 40 800

Demand 800 600 1100

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

6: Obtain IBFS by North West Corner Method

A B C Supply
P 2 7 4 5
Q 3 3 1 8
R 5 4 7 7
S 1 6 2 14
Demand 7 9 18
Initial Basic Feasible Solution (IBFS) by Least Cost Method (LCM)
Step 1: Locate the cell with lowest cost and allocate accordingly to the minimum
(Corresponding ai , bj )

Step 2: Again locate the next least cost cell in the reduced cost matrix and allocate as before

Step 3: Continue the process till all the allocations are made

7: Find IBFS by Least Cost Method:

D1 D2 D3 D4 Supply
O1 1 2 3 4 6
O2 4 3 2 0 8
O3 0 2 2 1 10
Demand 4 6 8 6
8: Find IBFS by Least Cost Method:

P Q R S Supply
A 6 4 1 5 14
B 8 9 2 7 16
C 4 3 6 2 5
Demand 6 10 15 4
9: Find IBFS by Least Cost Method:

D1 D2 D3 D4 Supply
F1 19 30 50 10 7
F2 70 30 40 60 9
F3 40 8 70 20 18
Demand 5 8 7 14

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

10: Find IBFS by Least Cost Method:

D1 D2 D3 Supply
F1 48 60 56 140
F2 45 55 53 260
F3 50 65 60 150
F4 52 64 55 220
Demand 200 320 250

11: Find IBFS by North West Corner Method and Least Cost Method

D1 D2 D3 D4 Supply
F1 19 30 50 10 7
F2 70 30 40 60 9
F3 40 8 7 14 34
Demand 5 8 7 14 34

12: Find the IBFS by LCM Method and NWCM

W1 W2 W3 Supply
F1 48 60 56 140
F2 45 55 53 260
F3 50 65 60 150
F4 52 64 55 220
Demand 200 320 250 770

Initial Basic Feasible Solution by Vogel’s Approximation Method

Step 1: Calculate penalty for each Row and Column by considering the difference between
least cost and next least cost in each row and column

Step 2: Find a row or column having highest penalty. Locate the least cost cell in that row or
column and allocate that cell with min (ai, bj)

Step 3: Again find fresh set of penalties for the reduced cost matrix and allocate as in Step 2

Step 4: Continue allocating for further reduced cost matrix until all allocations are made

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

13: Find the IBFS by Vogel’s Approximation Method

W1 W2 W3 Supply
F1 48 60 56 140
F2 45 55 53 260
F3 50 65 60 150
F4 52 64 55 220
Demand 200 320 250 770
14: Find IBFS by VAM
D E F G Supply
A 7 14 8 12 400
B 9 10 12 5 300
C 11 6 11 4 300
Demand 200 250 300 250

15: Find IBFS by VAM

D1 D2 D3 D4 Supply
A 11 13 17 14 250
B 16 18 14 10 300
C 21 24 13 10 400
Demand 200 225 275 250

16: A diary firm has three plants located in a state. The daily milk production at each as
follows:
Plant 1: 6 Million litres
Plant 2: 1 Million Litres
Plant 3: 10 Million Litres
Each day, the firm must fulfil the needs of its four distribution centres. Minimum
requirement at each centre is as follows
Distribution centres 1: 7 Million Litres
Distribution centres 2: 5 Million Litres
Distribution Centres 3: 3 Million Litres
Distribution Centres 4: 2 Million Litres
Costs in hundreds of rupees of shipping one million litre from each plant to each distribution
centres is given in following table.
D1 D2 D3 D4
P1 2 3 11 7
P2 1 0 6 1
P3 5 8 15 9

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

17: Find the initial basic feasible solution for the following transportation problem by VAM
D1 D2 D3 D4 Supply
O1 3 3 4 1 100
O2 4 2 4 2 125
O3 1 5 3 2 75
Demand 120 80 75 25 300
18: Find the initial solution to the following transportation problem using VAM
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
19: Determine an initial basic feasible solution to the following TP by using VAM
D1 D2 D3 D4 Supply
S1 21 16 15 3 11
S2 17 18 14 23 13
S3 32 27 18 41 19
Demand 6 10 12 15

20: Determine an initial basic feasible solution to the following TP by using VAM
D1 D2 D3 D4 Supply
S1 1 2 1 4 30
S2 3 3 2 1 50
S3 4 2 5 9 20
Demand 20 40 30 10

21: Determine an initial basic feasible solution to the following TP by using VAM
D1 D2 D3 D4 Supply
O1 6 4 1 5 14
O2 8 9 2 7 16
O3 4 3 6 2 5
Demand 6 10 15 4

21: Determine an initial basic feasible solution to the following TP by using VAM
A B C D E F Available
O1 9 12 9 6 9 10 5
O2 7 3 7 7 5 5 6
O3 6 5 9 11 3 11 2
O4 6 8 11 2 2 10 9
Requirement 4 4 6 2 4 2

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

Unbalanced Transportation Problem:

TP is said to be unbalanced if total demand is not equal to total supply (∑ 𝑎𝑖 ≠ 𝑏𝑗) such a TP
is solved by transforming it to balanced TP by adding dummy row or column with required
supply / demand to make it balanced i.e.

Total supply (∑ 𝑎𝑖 ) < Total demand (∑ 𝑏𝑗 ), a dummy row with supply = (∑ 𝑏𝑗 − ∑ 𝑎𝑖 ) is

added.

If total Supply (∑ 𝑎𝑖 ) > Total demand (∑ 𝑏𝑗 ), a dummy column with demand = ( ∑ 𝑎𝑖 −

∑ 𝑏𝑗 ) is added.

TP is then solved using the known procedure

22: Solve the following TP

D E F G Supply
A 7 14 8 12 400
B 9 10 12 5 300
C 11 6 11 4 300
Demand 200 450 300 250

23: Solve the following TP

D E F G Supply
A 7 14 8 12 400
B 9 10 12 5 300
C 11 6 11 4 300
Demand 200 450 300 250

24: A Company is spending Rs. 1200 and transportation of its unit from 3 plants to 4
destination centres. The supply and demand of units with unit cost of transportation is as
follows. What can be the maximum solving by optimal scheduling?

1 2 3 4 Supply
P1 20 30 50 17 7
P2 70 35 40 60 10
P3 40 12 60 25 18
Demand 5 8 7 15

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

25: Problem

• Holiday shipments of iPods to distribution centres

• Production at 3 facilities,
• A, supply 200k
• B, supply 350k
• C, supply 150k
• Distribute to 4 centers,
• N, demand 160k
• S, demand 140k
• E, demand 300k
• W, demand 200k
Total demand ≠ total supply. Obtain initial solution in the following transportation problem
by using VAM method

N S E W
A 16 13 22 17
B 14 13 19 15
C 9 20 23 10

12
Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

Restricted Transportation Problem:

 Sometimes in a transpiration problem some routes may not be available. This could
be due to a variety of reasons like unfavourable weather condition or a strike on
particular route etc.
 In such a situation there is a restrictions on route available for transportation.
 We assign a very large cost represented by M to each of such routes which are not
available.
 The effect of adding a large cost element would be that such routes would
automatically be eliminated in the final solutions.

26: The XYZ Tobacco Company purchased and stores in warehouses located in the following four cities

C1 C2 C3 Supply
A 7 10 5
B 12 9 4
C 7 3 11
D 9 5 7
Demand 120 100 110
Because of railroad construction, shipments are temporarily prohibited from warehouse at
city A to company C1. i) Find the IBFS for XYZ tobacco Company

27. Solve the below transportation problem

Warehouse
Factory W1 W2 W3 Supply
F1 16 12 200
F2 14 8 18 160
F3 26 16 90
Demand 180 120 150 450

Maximization of Transportation Problem:

If the TP contains profit matrix with an objective of maximization. It can be solved by
transforming profit matrix into cost matrix by rewriting the cost matric, such that all unit
profits subtracted in highest unit profit of the given profit matrix.

11. Solve for maximum profit

A B C D Supply
X 12 18 6 25 200
Y 8 7 10 18 500

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Prof. Vijay K S Quantitative Methods
BIET – MBA Programme, Davangere

Z 14 3 11 20 300
Demand 180 320 100 400

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Prof. Vijay K S Quantitative Methods