Project on Transportation and Assignment

Problems on ‘Bhutan Power Corporation’

Gedu College of Business Studies

Gedu, Chhukha.

An assignment Submitted by:

Rajesh Monger (03200262)

Rigzin Pema Namgyel (03200268)
Rinzin Dolkar (03200273)
Robin Rai (03200276)
Sangay Zangmo (03200295)

Bachelor of Commerce, 5th Semester, Finance ‘C’

17/11/2022
 DECLARATION

Module Code: BMS303 Type of Course Work: Group

Assignment
Module Title: Mathematics for Managerial Module Dr. T. Antony A Ligori
Decisions Tutor:
Date of Submission: 17 November 2022

We hereby declare that this academic work is our own and those referred ideas from other
sources have been appropriately acknowledged. The material in this submission has not
been previously submitted for assessments. We understand that if found otherwise, our
academic work will be cancelled and no marks will be awarded besides legal
consequences.
Rajesh Monger (03200262) Rinzin Dolkar (03200273) Robin Rai (03200276)

Sangay Zangmo (03200295) Rigzin Pema Namgyel (03200268)

FOR MODULE TUTOR

Sl. Marking Criteria Marks Marks

No Assigned obtained
1 Writing Problem Statement 2
2 Mathematical Formulation of the problem 2
3 Finding the Solution 4
4 Results & Interpretation 2
Total
Feedback:

Signature of Module Tutor

Introduction
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Transportation and assignment models are special purpose algorithms of the linear
programming. The simplex method of Linear Programming Problems (LPP) proves to be
inefficient in certain situations like determining optimum assignment of jobs to persons,
supply of materials from several supply points to several destinations (MBA Knowledge
Base, n.d.). Hence, transportation and assignment problems help handling those
shortcomings.

Transportation model is concerned with selecting the routes between supply and demand
points in order to minimize costs of transportation subject to constraints of supply at any
supply point and demand at any demand point.

Assignment model assign different jobs to different persons/machines, given the cost of job
completion for each pair of job machine/person with the objective of minimizing total cost.

Transportation Problem
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The transportation model is a special case of linear program. It involves determining how to
optimally transport goods or it helps provide solution with transporting good with the least
cost possible. The term transportation is associated with the cost problems principally
because in studying efficient transportation routes, a special procedure is used known as the
transportation method (Vohra, 2010).

Characteristics of Transportation Problems

i. The Requirements Assumption

Each source has a fixed supply of units, where this entire supply must be distributed
to the destinations.
Each destination has a fixed demand for units, where this entire demand must be
received from the sources.
This assumption means that the problem is balanced: Total Supply = Total Demand
ii. The Feasible Solutions Property
A transportation problem will have feasible solutions if and only if the sum of its
supplies equals the sum of its demands.
iii. The Cost Assumption
The cost of distributing units from any particular source to any particular destination
is directly proportional to the number of units distributed.
This cost is just the unit cost of distribution times the number of units distributed.
Thus, the parameters of any transportation problem are: Supplies, Demands and unit
costs.

Problem

Bhutan Power Corporation Limited started as an offshoot of the erstwhile Department of

power and the ownership was later transferred Druk Holding and Investment Limited (DHI).
The company is responsible to reach and deliver electricity to every parts of the country and
currently it is responsible to transfer power form the four power plants named the Tala,
Basochhu, Kolongchu and Mangdechhu power plants. In the recent years, the company has
been facing problems of increased costs and expenses whereby the profitability ratio of the
company is low and thereby leading to employee’s turnover with the total revenue was
recorded by the company to be Nu.10,876.56 in the year 2021 (Bhutan Power Corporation
Limited, 2021). The cost mainly rose due to the increase in maintain ace and transportation
charges of electricity.

Solution
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The manager of the company has recognized this issue and in order to mitigate the issue,
the management has decided to minimize the transportation cost of power form the plant to
the different locations with reverence to an example provided in a book by Winston, (2003)

Bhutan Power Corporation has four major power plants that supply the needs of four cities.
Each power plant can supply the following numbers of Megawatt of electricity.

Sl.no Power Plant Megawatt per day

1. Tala 1020

2. Basochhu 34

3. Kholongchu 600

4. Mangdechhu 720

Total 2404

Every day BPC meets its demands to its four main power consumer cities. Therefore, the
cities and its demands are as follows:

Sl.no Cities Megawatt per day

1. Thimphu 820

2. Paro 572

3. Phuentsholing 712

4. Punakha 300

Total 2404
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The distances from each power plant to each city as per the goggle maps are as follows
(Google Maps, n.d):

Sl.No Power Plant (From) Cities (To) Distance in Kilometers (Km)

1. Thimphu 74

2. Paro 70
Tala
3. Phuentsholing 50

4. Punakha 181

5. Thimphu 83

6. Paro 125
Basochhu
7. Phuentsholing 221

8. Punakha 34

9. Thimphu 496

10. Paro 538

Kholongchu
11. Phuentsholing 634

12. Punakha 444

13. Thimphu 229

14. Paro 271

Mangdechhu
15. Phuentsholing 367

16. Punakha 178

Therefore, from the above distance table, we can determine the costs that are incurred in
transporting power to each city. For the costs, the following assumption and calculations is
involved:

Let , 1 Km=Nu .1(Costs)

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The costs of transporting electricity from a plant to a city for 1 Km costs the company Nu.1.
Therefore, based on the assumption, the following is the Linear Programming Table:

Cost per 1 Megawatt (Nu)

To Cities

Supply
From Thimphu Paro Phuentsholin Punakha
g

Power Tala 74 70 50 181 1020

Plants
Basochhu 83 125 221 34 64

Kholongchu 496 538 634 444 600

Mangdechhu 229 271 367 178 720

Demand 820 572 712 300 2404

In order to minimize the cost of shipping to the distribution centers, we will solve the above
problems in the following methods:

i. Northwest corner method

ii. Least-cost method along with MODI method
iii. Vogel’s method
 8

1. Northwest Corner Method

To Cities
Supply
From Thimphu Paro Phuentsholing Punakha

820 200
Power Tala 74 70 50 181 1020
Plants 64
Basochhu 83 125 221 34 64

308 292
Kholongchu 496 538 634 444 600

420 300
Mangdechhu 229 271 367 178 720

Demand 820 572 712 300 2404

IBF Allocations are made as follows:

X11= 820
X12= 200
X22= 64
X32= 308
X33= 292
X43= 420
X44= 300

Total Cost = (820*74) + (200*70) + (64*125) + (308*538) + (292*634) + (420*367) +

(300*178)

= Nu. 641,052

Therefore, using the North West Corner method, the transportation cost incurred by BPC is
Nu. 641,052.
 9

2. Least-Cost Method

To Cities
Supply
From Thimphu Paro Phuentsholing Punakha

308 712
Power Tala 74 70 50 181 1020
Plants 64
Basochhu 83 125 221 34 64

336 264
Kholongchu 496 538 634 444 600

484 236
Mangdechhu 229 271 367 178 720

Demand 820 572 712 300 2404

IBF Allocations are made as follows:

X12= 308
X13= 712
X24= 64
X31= 336
X32= 264
X41= 484
X44= 236

Total Cost = (308*70) + (712*50) + (64*34) + (336*496) + (264*538) + (484*229) +

(236*178)

= Nu. 520,868

Therefore, using the least cost method, which aims at finding a solution with the least cost
possible for transportation, the cost comes to Nu. 520,868.
 10

3. Vogel’s Method

To Cities
Supply Penalty
From Thimphu Paro Phuentsholing Punakha

308 712
Powe Tala 74 70 50 181 1020 20 4 4 - - - -
r 64
Basochhu 83 125 221 34 64 49 49 - - - - -
Plants
100 264 236
Kholongchu 496 538 634 444 600 52 52 52 52 52 52 444

720
Mangdechhu 229 271 367 178 720 51 51 51 51 - - -

Demand 820 572 712 300 2404

9 55 171 144
9 55 - 144
155 201 - 3
Penalty 267 267 - 266
496 538 - 444
496 - - 444
- - - 444

X12= 308 X32= 264

Total Cost = (308*74) + (712*50) + (64*34) + (100*496) + (264*538) +
X13= 712 X34= 236
(236*444) + (720*229)
X24= 64 X41= 720
X31= 100 = Nu. 520,632
 11

Using MODI method to find the optimality of the solution

Checking for degeneracy

=m+n-1
=4+4-1=7=7(no. of allocated cells)
Therefore, no degeneracy occurs
Table 1

To Cities
Supply ui
From Thimphu Paro Phuentsholing Punakha

308 712
Power Tala 74 70 50 181 1020 u1= -468
Plants 64
Basochhu 83 125 221 34 64 u2= -410

100 264 236

Kholongchu 496 538 634 444 600 u3= 0

720
Mangdechhu 229 271 367 178 720 u4= -267

Demand 820 572 712 300 2404

vj V1= 496 V2= 538 V3= 518 V4= 444

Finding the values for Ui and Vj using the allocated cells.

Ui +Vj = Cij, Substituting u3 = 0, we get:
1. v1 = 496-0 = 496
2. u4 = 229-496 = -267
3. v2 = 538-0 = 538
4. u1 = 70-538 = -468
5. v3 = 50-(-468) = 518
6. v4 = 444-0 = 444
7. u2 = 34-444 = -410
Finding penalties for the Unallocated cells: Pij = Ui +Vj – Cij
1. P11 = (-468+496) – 74 = -46
6. P32 = (0+518) – 634 = -116
2. P14 = (-468+444) – 181 = -205
7. P33 = (-267+538) – 271 = 0
3. P22 = (-410+496) – 83 = 3
8. P34 = (-267+518) – 367 = -116
4. P23 = (-410+538) – 125 = 3
9. P42 = (-267+444) – 178 = -1
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5. P24 = (-410+518) – 221 = -113

Table 2

To Cities
Supply ui
From Thimphu Paro Phuentsholing Punakha

308 712
Power Tala (-) 74 70 50 (-) 181 1020 u1= -468
Plants
θ (3) 83
(3)
(-)
64 -θ
Basochhu 125 221 34 64 u2= -410

100 -θ 264 (-) 236 +θ

Kholongchu 496 538 634 444 600 u3= 0

720
Mangdechhu 229 (-) 271 (-) 367 (-) 178 720 u4= -267

Demand 820 572 712 300 2404

vj V1= 496 V2= 538 V3= 518 V4= 444

Finding the value for θ, we have

Θ = MIN {100, 64} = 64
Minimum allocated value among all negative position (-θ) on closed path =64, therefore,
subtract 64 from all (-θ) and add it to all (+θ)

Table 3

To Cities
Supply ui
From Thimphu Paro Phuentsholing Punakha

308 712 (-)

Power Tala (-) 74 70 50 181 1020 u1= -468
Plants 64
Basochhu 83 (-) 125 (-) 221 (-) 34 64 u2= -413

36 264 300
Kholongchu 496 538 (-) 634 444 600 u3= 0

720 (-) 271 (-) (-)

Mangdechhu 229 367 178 720 u4= -267

Demand 820 572 712 300 2404

vj V1= 496 V2= 538 V3= 518 V4= 444

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Ui +Vj = Cij, Substituting u3 = 0, we get:

1. v1 = 496-0 = 496
2. u2 = 83-496 = -413
3. u4 = 229-496 = -267
4. v2 = 538-0 = 538
5. u1 = 70-538 = -468
6. v3 = 50+468 = 518
7. v4 = 444-0 = 444
Finding penalties for the Unallocated cells: Pij = Ui +Vj – Cij
1. P11 = (-468+496) – 74 = -46
6. P32 = (0+518) – 634 = -116
2. P14 = (-468+444) – 181 = -205
7. P33 = (-267+538) – 271 = 0
3. P22 = (-413+538) – 125 = 0
8. P34 = (-267+518) – 367 = -116
4. P23 = (-413+518) – 221 = -116
9. P42 = (-267+444) – 178 = -1
5. P24 = (-413+444) – 34 = -3

Table 4

To Cities
Supply
From Thimphu Paro Phuentsholing Punakha

308 712
Power Tala 74 70 50 181 1020
Plants 64
Basochhu 83 125 221 34 64

36 264 300
Kholongchu 496 538 634 444 600

720
Mangdechhu 229 271 367 178 720

Demand 820 572 712 300 2404

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IBF allocations are made as follows:

X12= 308
X13= 712
X21= 64
X31= 36
X32= 264
X34= 300
X41= 720

Total Cost = (308*70) + (712*50) + (64*83) + (36*496) + (264*538) + (300*444) + (720*229)

= Nu. 520,440
Therefore, using the MODI method, which aims at finding a optimal solution possible for
transportation, the cost comes to Nu. 520,440.

Excel Solution
The following are the screenshots of how we have solved the transportation problem using
the excel solver

1. Transportation matrix

2. Excel solver
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3. Solution
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Assignment Problem
The AP is a special type of LPP where assignees are being assigned to perform task. It
involves applications such as assigning people to tasks. Even though its applications appear
to be quite different from those for the transportation, we will be going to see that the
assignment problem as a special type of transportation problem (Thukral, 2013).
The assignees here don’t particularly have to be employees or human but can also be non-
human. They could be machines or vehicles or plants or even time slots to be assigned
tasks. Hence, the following assumptions must be fulfilled for the assignment problem:

1. The number of assignees and the number of tasks is the same or equal
2. Each assignee is to be assigned to exactly one task or each task is to be performed
by exactly
3. one assignee
4. There is a cost (cij) associated with assignee i performing task j.
5. The objective is to determine how all n assignments should be made to minimize the
total cost.

Any problem satisfying all these assumptions can be solved extremely efficiently by
algorithm designed specifically for assignment problem.
Problem
The management of the company decided to expand its delivery to the other locations in
Bhutan to increase its revenue. In addition, BPC has demand for the electricity in another
four cities apart from the cities they provide as stated above. The company is faced with a
problem of deciding on how to assign the existing power plant to dispatch the electricity to
the needy cities in such a way that the travelling distance is minimized.

Solution
In order to ensure that there is adequate supply for the demand, Chhukha hydropower plant
is added in place of Basochhu hydropower project The distance between the power plant
and the cities are given in the following table.
Hungarian Assignment Method
The distance table for the problem is as follows:
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Location

Punakha Tashigang Samdrup Tsirang

dzongkhar

Tala 181 568 368 272

Chukhha 132 519 400 226

Power
Plants
Kholongchu 444 54 216 530

Mangdechhu 177 314 247 240

Solution

I. Conducting Row minimum and Column minimum

Location

Samdrup
Punakha Tashigang Tsirang
Row min
dzongkhar

Tala 181 568 368 272 181

Chukhha 132 519 400 226 132

Power
Plants
Kholongchu 444 54 216 530 54

Mangdechhu 177 314 247 240 177

Reduced Row

Location

Punakha Tashigang Samdrup Tsirang

dzongkhar

Power Tala 0 387 187 91

Plants
Chukhha 0 387 268 94
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Kholongchu 390 0 162 476

Mangdechhu 0 137 70 63

Column Min 0 0 70 63

Reduced Column

Location

Punakha Tashigang Samdrup Tsirang

dzongkhar

Tala 0 387 117 28

Chukhha 0 387 198 31

Power
Plants
Kholongchu 390 0 92 413

Mangdechhu 0 137 0 0

II. Optimization

Location

Punakha Tashigang Samdrup Tsirang

dzongkhar

Tala 0 387 117 28

Chukhha 0 387 198 31

Power
Plants
Kholongchu 390 0 92 413

Mangdechhu 0 137 0 0
 19

Location

Punakha Tashigang Samdrup Tsirang

dzongkhar

Tala 0 387 117 28

Chukhha 0 387 198 31

Power
Plants
Kholongchu 390 0 92 413

Mangdechhu 0 137 0 0

Since number of square boxes are not equal to the number of rows or columns hence
optimality is not obtained.
Minimum value of undeleted cell = 28

Location

Punakha Tashigang Samdrup Tsirang

dzongkhar

Tala 0 359 89 0

Chukhha 0 359 170 3

Power
Plants
Kholongchu 418 0 92 413

Mangdechhu 28 137 0 0

Location

Punakha Tashigang Samdrup Tsirang

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dzongkhar

Tala 0 359 89 0

Chukhha 0 359 170 3

Power
Plants
Kholongchu 418 0 92 413

Mangdechhu 28 137 0 0

Now, the number of square boxes is equal to number of rows and columns, optimality are
obtained. Hence, the task assigned to the programmer and the time taken to complete each
task by the programmer is given below:

Location Power Plant Kilometers (KM)

Punakha Chukhha 132

Tashigang Kholongchu 54

Sdzongkhar Mangdechhu 247

Tsirang Tala 272

Total 705 Km

Results and Interpretations:

181
Tala Punakha
568

368
272
132
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519
Chukhha Tashigang
400
226

444
54
216 Samdrup
Kholongchu
530 dzongkhar

177
314
247

240
Mangdechhu Tsirang

In the above diagram the arrows show the possible routes for the experts to develop the
assigned computerized program using Hungarian method were the next number to each
arrow represents the number of hours for that route to the assigned program.
After computing using the Hungarian method, it is found that power plant Tala is able to
provide electricity to Tsirang with the distance of 272 Km, power plant Chukhha is able to
provide electricity to Punakha with the distance of 132 Km, power plant Kholongchu is able
to provide electricity to Tashigang with the distance of 54 Km, and power plant Mangdechhu
is able to provide electricity to Samdrupdzongkhar with the distance of 247 Km. Thereby
taking 705 Km to provide electricity to all four locations.
Excel Solution
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References

Bhutan Power Corporation Limited. (2021). Meeting Bhutan's Electricity Needs: Annual
Report 2021. Thimphu: Bhutan Power Corporation Limited.
MBA Knowledge Base. (n.d.). Transportation and Assignment Models in Operations
Research . Retrieved from
https://www.google.com/amp/s/www.mbaknol.com/management-science/transportati
on-and-assignment-models-in-operatons-research/%3famp
Thukral, J. K. (2013). Mathematics for Business Studies (17th ed.). Gurgoan: Scholar Tech
Press.
Vohra, N. D. (2010). Quantitative Techniques in Management (4th ed.). New Delhi: McGraw
Hill Education (India) Private Limited.
Winston, W. L. (2003). Operations Research: Applications and Algorithms (4th ed.).
Singapore: Cenagage Learning.
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