Stage A Finding the Basic Feasible Solution

Demand Points
Factories D1 D2 D3 D4
P1 13 11 12 14 1550
P2 19 16 15 17 370
P3 18 13 16 15 680
220 1280 510 590

Vogels Approximation method (VAM)

D1 D2 D3 D4 Supply
Cij Matrix Capacity
P1 13 11 12 14 1550
P2 19 16 15 17 370
P3 18 13 16 15 680
220 1280 510 590

Xij Matrix Destinations Row Penalties

Supply
D1 D2 D3 D4 Capacity I1 I2 I3
P1 220 820 510 1550 1 1 3
P2 370 370 1 1 1
P3 460 220 680 2 2 2
Demand 220 1280 510 590
I1 5 2 3 1
Column I2 -- 2 3 1
Penalties I3 -- 2 -- 1
I4 -- 3 -- 2

Total Transportation cost 33570

Stage B Finding the Optimal Solution from the BFS, using Modified Multiplier Method (MODI) Method

Step 1 List down the Basic and Non Basic Variables

Considering the Basic Feasible Solution obtained by VAM,
Basic Variables: X11, X12, X13, X24, X32, X34
Non-Basic Variables: X14, X21, X22, X23, X31, X33

Step 2 Test for Non-Degeneracy:

Test for Non-Degeneracy will be satisfied if the Number of Basic Variables ≥ (m + n - 1), where m and n are the nu
and Columns respectively
Here Number of Basic Variables = 6, and (m + n + -1) = 6, so the current solution is Non-Degenerative, and and we
the next step
Step 3 Let us introduce ARTIFICIAL MULTIPLIER ui and vj, such that ui + vj = Cij, for all Basic Variables
here we have 6 basic variables in the current solution, but 7 unknown quantities (u1, u2, u3, v1, v2, v3, v4). So we
the system with u1 = 0 (say)
Introducing u1 = 0, in the system, we get v1 = 13, v2 =11, v3 = 12, v4 = 13, u2 = 4, u3 = 2

Cij Matrix D1 D2 D3 D4 ui u1 + v1 =
P1 13 11 12 14 0 u1 + v2 =
P2 19 16 15 17 4 u1 + v3 =
P3 18 13 16 15 2 u2 + v4 =
vj 13 11 12 13 u3 + v2 =
u3 + v4 =

Step 4 Now lets compute the variables into the non Basic variables with Optimality condition is all the values of ui + vj - Cij
X14 -1
X21 -2
X22 -1
X23 1
X31 -3
X33 -2

As, Even if one of the values of (ui + vj - Cij) in Step 4, are POSITIVE, then the current solution is NOT optimal,
in that case we go for adjustments, using that particular NON Basic Variable as the ENTERING variable, for which th
ui + vj - Cij is the highest

Here X23 is the Entering Variable

Step 5 Modification of Current Solution, by introducing X23:

Xij Matrix Destinations

Supply
D1 D2 D3 D4 Capacity
P1 220 820 510 1550
P2 K 370 370
P3 460 220 680
Demand 220 1280 510 590

Assume the value of X23 is K units (K is a positive quantity), that means K units of transported quantity is introdu
We have keep the parity of Row SUM and Column SUM after introducing X23 = K
Possible Loops:

Loop 1 D1 D3 Loop 2 D2 D3
P2 -K K P2 -K K
P3 K -K P3 460+K -K

Loop 3 D3 D4
P2 K 370-K
 P3 -K 220+K
It is obvious that all these three LOOPS are infeasible, because in 2-1, 2-2, 3-3 we cannot transport nege

Loop 4 D3 D4
P1 510-K K
P2 K 370-K

Putting the condition that the quantity transported in any path cannot be negative, we get the MAXIMUM Value
Putting the Value of K = 370 we get the following Solution:

Xij Matrix Destinations

Supply
D1 D2 D3 D4 Capacity
P1 220 1190 140 1550
P2 370 370
P3 90 590 680
Demand 220 1280 510 590

Now we will go back to STEP 1

Step 1 List down the Basic and Non Basic Variables
Considering the Basic Feasible Solution obtained by VAM,
Basic Variables: X11, X12, X13, X23, X32, X34
Non-Basic Variables: X21, X22, X24, X31, X33

Step 2 Test for Non-Degeneracy:

Test for Non-Degeneracy will be satisfied if the Number of Basic Variables ≥ (m + n - 1), where m and n are the num
and Columns respectively
Here Number of Basic Variables = 6, and (m + n + -1) = 6, so the current solution is Non-Degenerative, and and we c
the next step

Step 3 Let us introduce ARTIFICIAL MULTIPLIER ui and vj, such that ui + vj = Cij, for all Basic Variables
here we have 6 basic variables in the current solution, but 7 unknown quantities (u1, u2, u3, v1, v2, v3, v4). So we n

Introducing u1 = 0, in the system, we get

Cij Matrix D1 D2 D3 D4 ui u1+v1 = 13

P1 13 11 12 14 0 u1+v2 = 11
P2 19 16 15 17 3 u1+v3 = 12
P3 18 13 16 15 2 u2+v3 = 15
vj 13 11 12 13 u3+v2 = 13
u3+v4 = 15

Step 4 Let us compute the values of (ui + vj - Cij) for all NON-BASIC Variables (Optimality condition is all the values of ui + v
For X14 : u1 + v4 - C14 = -1
For X21 : u2 + v1 - C21 = -3
For X22 : u2 + v2 - C22 = -2
For X24 : u2 + v4 - C24 = -1
For X31 : u3 + v1 - C31 = -3
For X33 : u3 + v3 - C33 = -2
Since all the values of (ui + vj - Cij) are negative for non basic variables, the current solution is OPTIMAL

Total Optimal Transportation cost = 33200

enalties

I4
--
1
2

1), where m and n are the number of Rows

on-Degenerative, and and we can proceed to

, u2, u3, v1, v2, v3, v4). So we need to seed

13
11
12
17
13
15

is all the values of ui + vj - Cij ≤ 0

olution is NOT optimal,

TERING variable, for which the value of

ansported quantity is introduced in the current solution

 we cannot transport negetive quantity

we get the MAXIMUM Value of K = 370

), where m and n are the number of Rows

n-Degenerative, and and we can proceed to

u2, u3, v1, v2, v3, v4). So we need to seed

u v
0 13
0 11
0 12
3 12
2 11
2 13

dition is all the values of ui + vj - Cij ≤ 0)

ution is OPTIMAL