Chap 9 TT

Quantitative Analysis for Management
Thirteenth Edition, Global Edition
Module 8
Transportation, Assignment,
and Network Algorithms
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

Learning Objectives
After completing this module, students will be able to:
M8.1 Use the northwest corner and stepping-stone
methods to solve transportation problems.
M8.2 Use the Hungarian (matrix reduction) method to solve
assignment problems.
M8.3 Use the maximal flow algorithm.
M8.4 Use the shortest-route method.

Module Outline
M8.1 The Transportation Algorithm
M8.2 The Assignment Algorithm
M8.3 Maximal-Flow Problem
M8.4 Shortest-Route Problem

Introduction
• Linear programming can be used to solve distribution and
network models
• There are some specialized algorithms that can be used to
find the best solutions more quickly
• Often used instead of linear programming

The Transportation Algorithm (1 of 21)
• An iterative procedure to find the optimal solution to a
transportation problem
TABLE M8.1 Transportation Table for Executive Furniture
Corporation
TO WAREHOUSE WAREHOUSE WAREHOUSE
AT ALBUQUERQUE AT AT FACTORY
FROM BOSTON CLEVELAND CAPACITY
Des Moines
DES MOINES $5 $4 $3
100 capacity constraint
FACTORY
Cell representing a
EVANSVILLE $8 $4 $3
300 source-to-destination
FACTORY (Evansville to
Cleveland) shipping
FORT $9 $7 $5
assignment that
LAUDERDALE 300
could be made
FACTORY
WAREHOUSE
300 200 200 700
REQUIREMENTS
Cost of shipping 1 unit from Fort Lauderdale Cleveland warehouse Total demand
factory to Boston warehouse demand and total supply

• Developing an Initial Solution: Northwest Corner Rule
1. Exhaust the supply (factory capacity) at each row
before moving down to the next row
2. Exhaust the (warehouse) requirements of each
column before moving to the right to the next column
3. Check that all supply and demands are met

TABLE M8.2 Initial Solution to Executive Furniture Problem
Using the Northwest Corner Method
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY
DES MOINES $5 $4 $3
100
(D) 100
EVANSVILLE $8 $4 $3
300
(E) 200 100
FORT LAUDERDALE $9 $7 $5
300
(F) 100 200
WAREHOUSE
300 200 200 700
REQUIREMENTS
Means that the firm is shipping 100 units

along the Fort Lauderdale-Boston route

• The cost of this shipping assignment
ROUTE UNITS PER-UNIT TOTAL COST

FROM TO SHIPPED
blank
x
blank
COST ($) =
blank
($)
blank
D A 100 5 500
blank
E A 200 8 1,600
blank
E B 100 4 400
blank
F B 100 7 700
blank
F C 200 5 1,000
blank blank blank blank
Total 4,200

• Stepping-Stone Method: Finding a Least-Cost Solution
– Iterative technique for moving from an initial feasible
solution to an optimal feasible solution
– Two distinct parts
 Testing current solution to determine if improvement
is possible
 Making changes to the current solution to obtain an
improved solution

• One rule must first be observed
The number of occupied routes (or squares) must always be
equal to one less than the sum of the number of rows plus
the number of columns
Occupied shipping Number Number of

= + − 1
routes (squares) of rows columns
5=3+3−1
• When the number of occupied routes is less than this, the
solution is called degenerate

• Testing the solution for possible improvement
– Test each unused shipping route (or square) in the
transportation table by asking
“What would happen to total shipping costs
if one unit of our product were tentatively shipped
on an unused route?”

• Five Steps to Test Unused Squares with the Stepping-
Stone Method
1. Select an unused square to be evaluated.
2. Beginning at this square, trace a closed path back to
the original square via squares that are currently
being used and moving with only horizontal and
vertical moves.
3. Beginning with a plus (+) sign at the unused square,
place alternate minus (−) signs and plus signs on
each corner square of the closed path.

4. Calculate an improvement index by adding together
the unit cost figures found in each square containing a
plus sign and then subtracting the unit costs in each
square containing a minus sign.
5. Repeat steps 1 to 4 until an improvement index has
been calculated for all unused squares. If all indices
computed are greater than or equal to zero, an
optimal solution has been reached. If not, it is
possible to improve the current solution and decrease
total shipping costs.

TABLE M8.3
Evaluating
the Unused
Des Moines–
Boston
Shipping
Route

Improvement index (Iij) for Des Moines-Boston

route
Des Moines-Boston index = IDB = +$4 − $5 + $8 − $4 = +$3

TABLE M8.4 Evaluating the Des Moines–Cleveland (D–C)
Shipping Route
DES MOINES $5 $4 Start $3

100
(D) 100 − +
EVANSVILLE $8 $4 $3
300
(E) 200 + 100 −
300
(F) 100 + 200 −
WAREHOUSE
300 200 200 700
REQUIREMENTS
Closed path is + DC − DA + EA − EB + FB − FC

Des Moines–Cleveland = IDC
improvement index = +$3 − $5 + $8 − $4 + $7 − $5
= +$4
Evanston–Cleveland index = IEC
= +$3 − $4 + $7 − $5
= +$1
(closed path: + EC − EB + FB − FC)
Fort Lauderdale–Albuquerque index = IFA

= +$9 − $7 + $4 − $8
= −$2
(closed path: + FA − FB + EB − EA)

TABLE M8.5 Stepping-Stone Path Used to Evaluate Route
F–A

DES MOINES $5 $4 $3
100
(D) 100
EVANSVILLE $8 $4 $3
300
(E) 200 − 100 +
300
(F) + 100 − 200
WAREHOUSE
300 200 200 700
REQUIREMENTS

TABLE M8.6 Second Solution to the Executive Furniture
Problem

DES MOINES $5 $4 $3
100
(D) 100
EVANSVILLE $8 $4 $3
300
(E) 100 200
300
(F) 100 200
WAREHOUSE
300 200 200 700
REQUIREMENTS

D to B = IDB = +$4 − $5 + $8 − $4 = +$3

(closed path: +DB − CA + EA − EB)
D to C = IDC = +$3 − $5 + $9 − $5 = +$2
(closed path: +DC − DA + FA − FC)
E to C = IEC = +$3 − $8 + $9 − $5 = −$1
(closed path: +EC − EA + FA − FC)
F to B = IFB = +$7 − $4 + $8 − $9 = +$2
(closed path: +FB − EB + EA − FA)

TABLE M8.7 Path to Evaluate the E–C Route

DES MOINES $5 $4 $3
100
(D) 100
EVANSVILLE $8 $4 Start $3
300
(E) 100 − 200 +
300
(F) 100 + 200 −
WAREHOUSE
300 200 200 700
REQUIREMENTS

• Total cost of third solution
ROUTE DESKS PER-UNIT TOTAL COST

FROM TO SHIPPED
blank
x
blank
COST ($)
blank
= blank
($)
blank
blank blank
D A 100 5 500
blank blank
E B 200 4 800
blank blank
E C 100 3 300
blank blank
F A 200 9 1,800
blank blank
F C 100 5 500
blank blank blank blank blank
Total 3,900

TABLE M8.8 Third and Optimal Solution

DES MOINES $5 $4 $3
100
(D) 100
EVANSVILLE $8 $4 $3
300
(E) 200 100
300
(F) 200 100
WAREHOUSE
300 200 200 700
REQUIREMENTS

D to B = IDB = +$4 − $5 + $9 − $5 + $3 − $4 = +$2

(path: +DB − DA + FA − FC + EC − EB)
D to C = IDC = +$3 − $5 + $9 − $5 = +$2
(path: +DC − DA + FA − FC)
E to A = IEA = +$8 − $9 + $5 − $3 = +$1
(path: +EA − FA + FC − EC)
F to B = IFB = +$7 − $5 + $3 − $4 = +$1
(path: +FB − FC + EC − EB)

• Summary of Steps in Transportation Algorithm
(Minimization)
1. Set up a balanced transportation table.
2. Develop initial solution using the northwest corner
method.
3. Calculate an improvement index for each empty cell
using the stepping-stone method. If improvement
indices are all nonnegative, stop; the optimal solution
has been found. If any index is negative, continue to
step 4.
4. Select the cell with the improvement index indicating
the greatest decrease in cost. Fill this cell using a
stepping-stone path and go to step 3.
Special Situations with the Transportation
Algorithm (1 of 10)
• Unbalanced Transportation Problems
– Total demand is not equal to total supply
– Unbalanced problems handled by introducing
 Dummy sources or
 Dummy destinations

Algorithm (2 of 10)
• Demand less than supply
– Add dummy column representing a fake destination
• Demand greater than supply
– Add dummy row representing a fake source

Algorithm (3 of 10)
TABLE M8.9 Initial Solution to an Unbalanced Problem
Where Demand Is Less Than Supply
New Des Moines
capacity
TO ALBUQUERQUE BOSTON CLEVELAND DUMMY FACTORY
FROM (A) (B) (C) WAREHOUSE CAPACITY
DES MOINES 5 4 3 0
250
(D) 250
EVANSVILLE 8 4 3 0
300
(E) 50 200 50
FORT LAUDERDALE 9 7 5 0
300
(F) 150 150
WAREHOUSE
300 200 200 150 850
REQUIREMENTS
Total cost = 250($5) + 50($8) + 200($4) + 50($3) + 150($5) + 150($0) = $3,350

Algorithm (4 of 10)
TABLE M8.10 Unbalanced Transportation Table for Happy
Sound Stereo Company
TO PLANT
WAREHOUSE A WAREHOUSE B WAREHOUSE C
FROM SUPPLY
$6 $4 $9
PLANT W 200
$10 $5 $8
PLANT X 175
$12 $7 $6
PLANT Y 75
WAREHOUSE 450
250 100 150
DEMAND 500
Totals
do not
balance

Algorithm (5 of 10)
TABLE M8.11 Initial Solution to an Unbalanced Problem in
Which Demand Is Greater Than Supply
TO PLANT
WAREHOUSE A WAREHOUSE B WAREHOUSE C
FROM SUPPLY
$6 $4 $9
PLANT W 200
200
$10 $5 $8
PLANT X 175
50 100 25
$12 $7 $6
PLANT Y 75
75
0 0 0
DUMMY PLANT 50
50
WAREHOUSE
250 100 150 500
DEMAND
Total cost of initial solution = 200($6) + 50($10) + 100($5) + 25($8) + 75($6) + 50($0) = $2,850

Algorithm (6 of 10)
• Degeneracy in an initial solution
TABLE M8.12 Initial Solution of a Degenerate Problem
TO WAREHOUSE
CUSTOMER 1 CUSTOMER 2 CUSTOMER 3
FROM SUPPLY
8 2 6
WAREHOUSE 1 100
100
10 9 9
WAREHOUSE 2 120
100 20
7 10 7
WAREHOUSE 3 80
80
CUSTOMER
100 100 100 300
DEMAND

Algorithm (7 of 10)
• Degeneracy during later solution stages
TABLE M8.13 Bagwell Paint Transportation Table
Total shipping
cost = $2,700
TO FACTORY
WAREHOUSE 1 WAREHOUSE 2 WAREHOUSE 3
FROM CAPACITY
8 5 16
FACTORY A 70
70
15 10 7
FACTORY B 130
50 80 20
3 9 10
FACTORY C 80
50
WAREHOUSE
150 80 50 280
REQUIREMENT

Algorithm (8 of 10)
Factory A − Warehouse 2 index = + 2

Factory A − Warehouse 3 index = + 1
Factory B − Warehouse 3 index = − 15
Factory C − Warehouse 2 index = + 11
Only route with

a negative index

Algorithm (9 of 10)
• Degeneracy during later solution stages
TABLE M8.14 Tracing a Closed Path for the Factory B–

Warehouse 3 Route
TO
WAREHOUSE 1 WAREHOUSE 3
FROM
15 7
FACTORY B
50 − +
3 10
FACTORY C
30 + − 50

Algorithm (10 of 10)
• More Than One Optimal Solution
– Multiple solutions are possible
– May increase flexibility
• Maximization Transportation Problem
– Improvement indices are negative or zero
• Unacceptable or Prohibited Routes
– Assign a very high cost
• Other Transportation Methods

The Assignment Algorithm (1 of 11)
• Each assignment problem has associated with it a table or
matrix
– Rows contain the objects or people to assign
– Columns comprise the tasks or things they are
assigned to
– Numbers in the table are the costs associated with
each particular assignment

TABLE M8.15 Estimated Project Repair Costs for the Fix-It
Shop Assignment Problem
blank blank PROJECT blank

PERSON 1 2 3
Adams $11 $14 $6
Brown 8 10 11
Cooper 9 12 7

• The Hungarian Method (Flood’s Technique)
– Principle of matrix reduction
– Matrix of opportunity costs
TABLE M8.16 Summary of Fix-It Shop Assignment Alternatives and Costs
blank PROJECT blank LABOR TOTAL
ASSIGNMENT COSTS ($) COSTS ($)
1 2 3 blank blank
Adams Brown Cooper 11 + 10 + 7 28
Adams Cooper Brown 11 + 12 + 11 34
Brown Adams Cooper 8 + 14 + 7 29
Brown Cooper Adams 8 + 12 + 6 26
Cooper Adams Brown 9 + 14 + 11 34
Cooper Brown Adams 9 + 10 + 6 25
• Three Steps of the Assignment Method
1. Find the opportunity cost table by
a. Subtracting the smallest number in each row of the
original cost table or matrix from every number in that
row.
b. Then subtracting the smallest number in each column
of the table obtained in part (a) from every number in
that column.

2. Test the table resulting from step 1 to see whether an
optimal assignment can be made. The procedure is to
draw the minimum number of vertical and horizontal
straight lines necessary to cover all zeros in the table. If
the number of lines equals either the number of rows or
columns in the table, an optimal assignment can be
made. If the number of lines is less than the number of
rows or columns, we proceed to step 3.

3. Revise the present opportunity cost table. This is done
by subtracting the smallest number not covered by a line
from every uncovered number. This same smallest
number is also added to any number(s) lying at the
intersection of horizontal and vertical lines. We then
return to step 2 and continue the cycle until an optimal
assignment is possible.

The Assignment
Algorithm (7 of 11)
FIGURE M8.1 Steps
in the Assignment
Method

TABLE M8.17 Cost of Each TABLE M8.18 Row Opportunity

Person–Project Assignment for the Cost Table for the Fix-It Shop Step
Fix-It Shop Problem 1, Part (a)
blank blank PROJECT blank blank blank PROJECT blank

PERSON 1 2 3 PERSON 1 2 3
Adams $11 $14 $6 Adams $5 $8 $0
Brown 8 10 11 Brown 0 2 3
Cooper 9 12 7 Cooper 2 5 0

TABLE M8.19 Total Opportunity TABLE M8.20 Test for Optimal

Cost Table for the Fix-It Shop Step Solution to Fix-It Shop Problem
1, Part (b)
blank blank
blank blank PROJECT blank blank PROJECT blank
blank
blank
Adams $5 $6 $0 Adams $5 $6 $0
Brown 0 0 3 Brown 0 0 3 Covering
line 1blank
blank blank blank blank
Covering line 2

TABLE M8.21 Revised Opportunity TABLE M8.22 Optimality Test on the

Cost Table for the Fix-It Shop Revised Fix-It Shop Opportunity
Problem Cost Table
blank
blank blank PROJECT blank blank blank PROJECT
Adams $3 $4 $0 Adams $3 $4 $0
Brown 0 0 5 Brown 0 0 5 Covering
line 2
Covering line 1 Covering line 3

TABLE M8.23 Making the Final Fix-It Shop Assignments
blank blank blank blank blank blank
blank blank blank
(A) FIRST (B) SECOND (C) THIRD

ASSIGNMENT ASSIGNMENT ASSIGNMENT
PERSON 1 2 3 PERSON 1 2 3 PERSON 1 2 3
Adams 3 4 0 Adams 3 4 0 Adams 3 4 0
Brown 0 0 5 Brown 0 0 5 Brown 0 0 5
Cooper 0 1 0 Cooper 0 1 0 Cooper 0 1 0
ASSIGNMENT COST ($)
Adams to project 3 6
Brown to project 2 10
Cooper to project 1 9
Total cost 25

Special Situations with the Assignment
Algorithm (1 of 3)
• Unbalanced Assignment Problems
– Balanced assignment problem – number of rows
equals number of columns
– For an unbalanced problem add dummy rows or
dummy columns
TABLE M8.24 Estimated Project Repair Costs for Fix-It
Shop with Davis Included
blank blank PROJECT blank blank
PERSON 1 2 3 DUMMY
Adams $11 $14 $6 $0
Brown 8 10 11 0
Cooper 9 12 7 0
Davis 10 13 8 0
Algorithm (2 of 3)
• Maximization Assignment Problems
• Reformat as minimization problem by converting numbers
in table to opportunity costs
– Subtract every number in the original payoff table from
the largest single number in that table
ASSIGNMENT EFFICIENCY
Ship 1 to sector D 55
Ship 1 to sector C 80
Ship 1 to sector B 100
Ship 1 to sector A 65
Total efficiency 300

Algorithm (3 of 3)
TABLE M8.25 Efficiencies of British TABLE M8.26 Opportunity Costs of
Ships in Patrol Sectors British Ships
blank blank SECTOR blank blank blank blank SECTOR blank blank
SHIP A B C D SHIP A B C D
1 20 60 50 55 1 80 40 50 45
2 60 30 80 75 2 40 70 20 25
3 80 100 90 80 3 20 0 10 20
4 65 80 75 70 4 35 20 25 30
TABLE M8.27 Row Opportunity TABLE M8.28 Total Opportunity

Costs for the British Navy Problem Costs for the British Navy Problem
blank blank SECTOR blank blank blank blank SECTOR blank blank
SHIP A B C D SHIP A B C D
1 40 0 10 5 1 25 0 10 0
2 20 50 0 5 2 5 50 0 0
3 20 0 10 20 3 5 0 10 15
4 15 0 5 10 4 0 0 5 5

Maximal-Flow Problem (1 of 6)
• Determine the maximum amount of material that can flow
from one point (the source) to another (the sink) in a
network
– Road network problem
– Traffic flows in both directions
FIGURE M8.2 Road

Network for Waukesha

• Four Steps of the Maximal-Flow Technique
1. Pick any path from the start (source) to the finish
(sink) with some flow. If no path with flow exists, then
the optimal solution has been found.
2. Find the arc on this path with the smallest flow
capacity available. Call this capacity C.
3. For each node on this path, decrease the flow
capacity in the direction of flow by the amount C. For
each node on this path, increase the flow capacity in
the reverse direction by the amount C.
4. Repeat these steps until an increase in flow is no
longer possible.
FIGURE M8.3 Capacity
Adjustment for Path 1–2–6
Iteration 1

FIGURE M8.4 Second Iteration for Waukesha Road System

FIGURE M8.5 Third and Final Iteration for Waukesha Road
System

blank FLOW
PATH (CARS PER HOUR)
1-2-6 blank 200
1-2-4-6 blank 100
1-3-5-6 blank 200
blank Total 500

Shortest-Route Problem (1 of 5)
• Find the shortest distance from one location to another
• Shortest-Route Technique
– Transport furniture from factory to warehouse
– Find shortest route
FIGURE M8.6 Roads from Ray’s Plant to Warehouse

• Steps of the Shortest-route Technique
1. Find the nearest node to the origin (plant). Put the
distance in a box by the node.
2. Find the next-nearest node to the origin (plant), and
put the distance in a box by the node. In some cases,
several paths will have to be checked to find the
nearest node.

• Steps of the Shortest-route Technique
3. Repeat this process until you have gone through the
entire network. The last distance at the ending node
will be the distance of the shortest route. You should
note that the distance placed in the box by each node
is the shortest route to this node. These distances are
used as intermediate results in finding the next-
nearest node.

FIGURE M8.7 First Iteration
for Ray Design
FIGURE M8.8 Second

Iteration for Ray Design

FIGURE M8.9 Third Iteration
for Ray Design
FIGURE M8.10 Fourth and

Final Iteration for Ray Design

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Chap 9 TT

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Quantitative Analysis for Management

Thirteenth Edition, Global Edition

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

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TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

Means that the firm is shipping 100 units

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ROUTE UNITS PER-UNIT TOTAL COST

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Occupied shipping Number Number of

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Improvement index (Iij) for Des Moines-Boston

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DES MOINES $5 $4 Start $3

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Fort Lauderdale–Albuquerque index = IFA

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TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

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TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

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D to B = IDB = +$4 − $5 + $8 − $4 = +$3

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TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

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ROUTE DESKS PER-UNIT TOTAL COST

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TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

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D to B = IDB = +$4 − $5 + $9 − $5 + $3 − $4 = +$2

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Total cost = 250($5) + 50($8) + 200($4) + 50($3) + 150($5) + 150($0) = $3,350

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Factory A − Warehouse 2 index = + 2

Only route with

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TABLE M8.14 Tracing a Closed Path for the Factory B–

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blank blank PROJECT blank

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TABLE M8.17 Cost of Each TABLE M8.18 Row Opportunity

blank blank PROJECT blank blank blank PROJECT blank