Answer & Explanation

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Differences between transportation problems and assignment problems

 Transportation problem is a special case of linear programming dealing with the

distribution of goods from several points of origin(sources) to several points of

destination. A transportation problem is solved to either minimize the transportation cost

or to maximize the contribution/profit.

On the other hand;

An assignment problem is a special case of linear programming involving resource allocation

where each source can supply one unit and each destination can only receive one unit. For

example, assignment of machines to jobs to minimize costs.

 In transportation problem, a source can supply several destinations while in assignment a

source can only supply one destination.

 Transportation problem is concerned with transportation of goods while assignment

problem is concerned with assignment of jobs to various people or machines to various

people etc.

 Transportation problem can be solved using three methods that is; north west corner

method, VAM and LCCM while assignment problem can be solved using two methods

namely complete enumeration method and Hungarian method.

 Transportation problem is not necessarily a square matrix while an assignment problem

must be a square matrix in order to be solved.

Importance of transportation and assignment problems to the business world

Transportation and assignment problems are important in the business world since;

 They can be used in capital budgeting, to determine the optimal allocation of capital in

order to maximize the net present value.

 They can be used in determination of optimal production mix in order to maximize profit.

 They can be used in selection of specific investments in order to maximize expected

return

 They can be applied in the assignment of jobs in order to minimize cost.

 They are used to determine the quantity of the quantity of goods to be transported from a

number of sources to a given number of destinations in order to minimize cost.

Step-by-step explanation

Reference;

Dantzig, G. B. (1998). Linear programming and extensions (Vol. 48). Princeton university press.