MANAGEMENT SCIENCE

(LESSON 4 - TRANSPORTATION
ENGR. ELMA V. LUZANO
LESSON 2 –LINEAR PROGRAMMING
LEARNING OBJECTIVES:
At the end of the lesson, the students are expected
to:
▪ Determine the importance of transportation amd
assignment methods as special algorithm of LP in
business,
▪ Set up an initial distribution arrangement by the
northwest method
• Handle an unbalanced supply and demand condition of
transportation problems
• Apply different transportation methods
Introduction

Transportation problems deals with selecting the

routes from the source of supply to the distribution
outlets.
Also included is selecting routes for the product
distribution network among the manufacturing
warehouses or among regional and local distribution
outlets.
 Assignment problems involve assigning
employees to tasks, salespersons to territories,
contracts to bidders, of jobs to plants.

The objectives of these two special-purpose

algorithms is either to maximize the cost or
transportation or to maximize the contribution to profit
 In a minimization process, the optimum solution
is derived when the improvement indices are all positive
while in a maximization process, the optimum solution is
reached when the values of improvement indices are all
negative.

Transportation problems may be balanced or

unbalanced. Balanced if demand is equal to supply.
Unbalanced has unequal supply and demand.
c. If the statement is “A supervisor would like to know
how much each of two products to produce” this would
lead to:
𝒙𝟏 = 𝑸𝒖𝒂𝒏𝒕𝒊𝒕𝒚 𝒐𝒇 𝒕𝒉𝒆 𝒇𝒊𝒓𝒔𝒕 𝒑𝒓𝒐𝒅𝒖𝒄𝒕
𝒙𝟐 = 𝑸𝒖𝒂𝒏𝒕𝒊𝒕𝒚 𝒐𝒇 𝒕𝒉𝒆 𝒔𝒆𝒄𝒐𝒏𝒅 𝒑𝒓𝒐𝒅𝒖𝒄𝒕
BALANCED TRANSPORTATION PROBLEMS:

I. STEPPING STONE METHOD

The transportation table serves and provides a framework

for presenting all the relevant data in a concise manner and
facilities the search for progressively better solutions.
Example:
The sources of supply are A, B and C. The capacity for
each point of source is A, 158, for B, 184, and for C, 179.
These supplies are to be delivered X, Y and Z .The
requirements for each point of destination are as follows: X,
174, for Y, 204 and for Z, 143. The costs of transportation
from source A to destinations: X is P4, Y is P8, Z is P8.
The costs of transportation from source B to destinations: X
is P16, Y is P24, Z is P16. The costs of transportation from
source C to destinations: X is P8, Y is P16, Z is P24.
Step 1. CONSTRUCTION OF THE TRANSPORTATION
TABLE.

The number of rows is equal to number of sources plus

2 while the number of column is equal to number of
destination plus 2. Such is true for a balanced case only.
Step 2. DEVELOP THE INITIAL SOLUTION

Start at the upper left-hand corner or the northwest

corner of the table, the supply available at each row must be
exhausted before moving down to the next row, and the
requirement of any column must be satisfied before moving to
the right to the column. Always check that all rim
requirements have been satisfied.
Total Cost
= 158(4) + 16(16) + 168(24) + 36(16) + 143(24) = P8,928

Observe that the number of occupied cells or stones

must equal the number of sources plus the number of
destinations minus 1. If the number of occupied cells is less
than this, say 1, assume one of the empty cells to be
occupied and mark as 0.
Step 3. TEST FOR IMPROVEMENT
The purpose of this step is to determine whether the solution
is the best. The determination involves the examination of
each unoccupied cell in the table. Select the unoccupied cell
to be evaluated. Beginning with the chosen unoccupied cell,
trace a closed path by moving horizontally and vertically only
from this unoccupied cell through occupied cells back to the
original unoccupied. Only one closed path exists for each
unoccupied cell. Although the path may skip over occupied
or unoccupied cells and may cross over itself, corners of the
closed path occur only at the occupied cells and unoccupied
cell being evaluated.
Assign plus and minus signs alternately at each corner cell
of the closed path, beginning with a plus sign at the
unoccupied cell. Assign these signs by starting either a
clockwise or a counterclockwise direction. These positive
and negative signs represent the addition or subtraction of
1 unit to a cell. Determine the net change in costs as a
result of the changes made in tracing the path. Summing
the unit cost in each cell with a plus sign will give the
addition to cost. The decrease in cost is obtained by
summing the unit cost in each cell with a negative sign.
Comparing the additions to cost with the decreases will give
the improvement index. Repeat the said procedure for each
unoccupied cell.
Summary of the test for improvement for each unoccupied
cell of Table 1.
Cell AY: 8 - 24 + 16 - 4 = -4
Cell AZ: 8 - 24 + 16 - 24 + 16 - 4 = -12
Cell BZ: 16 - 24 + 16 - 24 = -16
Cell CX: 8 - 16 + 24 - 16 = 0
 The improvement index for unoccupied cell AY is -4 which
means that for every unit transported from A to Y, the total cost of
transportation would be reduced by P4.
The unoccupied cell BZ that will bring about greater reduction in
the total cost of transportation.
When cell improvement indices are positive or zero, an optimal
solution has been found. If one or more is negative, the cell with most
negative should be brought into solution because that route has the
largest potential for improvement per unit.
In this case, the unoccupied cell BZ with an improvement index
of -16, which represented an improvement potential of P16 per unit.
Hence, an improved solution is possible.
Step 4. DEVELOP THE IMPROVED SOLUTION

Focus on the unoccupied cell that has the largest

negative cell evaluation. Improving the solution involves
reallocating quantities in the transportation table. The
stepping stone path for the unoccupied cell with most
negative improvement index number is necessary for
determining the quantities that can be allocated while
retaining the balance of supply and demand for the table.
 The plus signs in the path indicate units to be added, the
minus signs indicate units to be subtracted. The limit on
subtraction is the smallest quantity in a negative position
along the cell path. There are two quantities in negative
positions, 143 and 168. Because 143 is the smaller quantity,
that amount will be shifted in the following manner: subtract
143 from each cell on the path with a minus sign, and add
143 units to the quantity of each cell with a positive sign in it.
The result is shown in Table 2.
Ct = 158(4) + 16(16) + 25(24) + 143(16) + 179(16) = P 6640
Step 5. ITERATION STEPS 3 AND 4 UNTIL OPTIMUM
SOLUTION IS FOUND.
Iterate Steps 3 and 4 until improvement index for each
unoccupied cells are positive or zero, an optimal solution
has been found.
Test for Improvement of Table 2.
Cell AY: 8 - 24 + 16 - 4 = -4
Cell AZ: 8 - 16 + 16 - 4 = 4
Cell CX: 8 - 16 + 24 - 16 = 0
Cell CZ: 24 - 16 + 24 - 16 = 16
The test for improvement shows that further improvement is
possible. The improvement can be possible by transferring
some units to unoccupied cell AY. The stepping stone path of
cell AY is indicated in Table 3.

The quantities in negative positions are 25 and 158, therefore

25 units is shifted to cell AY and this same amount is subtracted
from each cell with minus signs and added to the quantity of the
cells with plus signs. See Table 3 as an improvement of Table 2.
 133

Total Cost = 133(4) + 25(8) + 41(16) + 143(16) + 179(16) = P6,540

Test for Improvement for Table 3:
Cell AZ: 8 - 16 + 16 - 4 = 4
Cell BY: 24 - 16 + 4 - 8 = 4
Cell CX: 8 - 4 + 8 - 16 = -4
Cell CZ: 24 - 16 + 16 - 4 + 8 - 16 = 12
Since there is still a negative index number due to unoccupied
cell CX, this indicated that Table 3 is not the optimal solution
yet. Hence, there is a need to iterate steps 3 and 4 again.
Total cost = 158(8) + 41(16) + 143(16) + 133(8) + 46(16) = P6,008
Test for Improvement of Table 4:
Cell AX: 4 - 8 + 16 - 8 = 4
Cell AZ: 8 - 16 + 16 - 8 + 16 - 8 = 8
Cell BY: 24 - 16 + 8 - 16 = 0
Cell CZ: 24 - 8 + 16 - 16 = 16
Since the index numbers for improvement are all positive, therefore, the optimum
solution is reached.
Decision:

Source A should supply 158 units destination Y, source B should supply 41 and 143
units destinations X and Z, respectively, and source C should supply 133 and 46 units
destinations X and Y, respectively in order to minimize the total cost of transportation to
P6008.
Note that the total cost of transportation is calculated every
table. The significance of such computation is to
countercheck if the objective is realized, that is, to minimize
the total cost of transportation. It will be observed that the
total cost of transportation decreased from P8,928 of Table 1
to P6,008 of the Table 4, the optimum table. It will also show
the improvement in terms of cost from the different
alternative source-to-destination assignment
Case 2: SUPPLY ≠ DEMAND

When total supply is not equal to total demand, it is necessary to modify the
original transportation problem so that the total supply and demand are equal. This
is accomplished by adding either a dummy column or a dummy row; a dummy row
is added if total demand is greater than total supply and a dummy column is added
if total supply is greater than total demand. The dummy is assigned unit costs of
zero for each, and it is given a supply (if a dummy row is added) or a demand (if a
dummy column is added) equal to the difference between the total supply and total
demand.
 Total supply = 550 + 525 + 425 = 1500
Total demand = 400 + 500 + 700 = 1600

Since total demand is greater than total supply, then a

dummy row is necessary and dummy row W will have a
supply of 1600 - 1500 or 100.
Optimality Test:
XC: 4 - 2 + 1 - 2 = 1
YA: 4 - 8 + 2 - 1 = -3
ZA: 10 - 8 + 2 - 1 + 2 - 6 = -1
ZB: 3 - 1 + 2 - 6 = -2
WA: 0 - 8 + 2 - 1 + 2 - 0 = -5
WB: 0 - 1 + 2 - 0 = 1
Ct = 300(8) + 250(2) + 250(1) + 275(2) + 425(6) + 100(0) = P6250
Optimality Test:
XC: 4 - 2 + 1 - 2 = 1
YA: 4 - 8 + 2 - 1 = -3
ZA: 10 - 8 + 2 - 1 + 2 - 6 = -1
ZB: 3 - 1 + 2 - 6 = -2
WB: 0 - 0 + 8 - 2 = 6
WC: 0 - 0 + 8 - 2 + 1 - 2 = 5
Ct = 50(8) + 500(2) + 250(4) + 275(2) + 425(6) + 100(0) = P5500
Optimality Test:
XC: 4 - 2 + 4 - 8 = -2
YB: 1 - 4 + 8 - 2 = 3
ZA: 10 - 4 + 2 - 6 = 2
ZB: 3 - 2 + 8 - 4 + 2 - 6 = 1
WB: 0 - 0 + 8 - 2 = 6
WC: 0 - 0 + 4 - 2 = 2
Optimality Test:

XA: 8 - 4 + 2 - 4 = 2
YB: 1 - 2 + 4 - 2 = 1
ZA: 10 - 4 + 2 - 6 = 2
ZB: 3 - 2 + 4 - 6 = -1
WB: 0 - 0 + 4 - 2 + 4 - 2 = 6
WC: 0 - 0 + 4 - 2 = 2
Ct = 75(2) + 475(4) + 300(4) + 225(2) + 425(6) + 100(0) = P4975
Optimality Test:
XA: 8 - 4 + 2 - 4 = 2
YB: 1 - 2 + 4 - 2 = 1
ZA: 10 - 4 + 2 - 4 + 2 - 3 = 3
ZC: 6 - 4 + 2 - 3 = 1
WB: 0 - 2 + 4 - 2 + 4 - 0 = 4
WC: 0 - 0 + 4 - 2 = 2
 Quantities in dummy route in the optimal solution are not
transported. Rather, it indicates which point of destination will not
receive its total demand, or which point of origin will hold the excess
supply.

Decision:
X should deliver 75 and 475 units to B and C, respectively, Y
should deliver 300 and 225 units to A and C, respectively, and Z
should deliver 425 units to B in order to minimize the total cost
transportation to P4975. Destination A will be short by 100 units.
II. MODIFIED DISTRIBUTION METHOD

A new row is added above the tableau and a new column

is inserted to the left of the tableau

Step 1. CONSTRUCTION OF THE TRANSPORTATION

TABLE.

The number of rows is equal to number of sources plus

2 while the number of columns is equal to number of
destination plus 2. Such is true for a balanced case only.
Step 2. DEVELOP THE INITIAL SOLUTION

Start at the upper left-hand corner or the northwest corner

of the table, the supply available at each row must be
exhausted before moving down to the next row, and the
requirement of any column must be satisfied before moving
to the right to the column. Always check that all rim
requirements have been satisfied.
Step 3. DETERMINATION ROW AND COLUMN INDEX
NUMBERS

These row and column index number are based on the unit
costs of the occupied cells. The index numbers are determined
in such a way that for any occupied cell, the sum of the row
index and column index equal to cell’s unit transportation cost.

Row index + Column index = Cell index

(Unit Transportation Cost of occupied Cell)
 - assign the index number of row 1 as zero. The index numbers are
determined sequentially in a manner dictated by the position of the
occupied cells.
Let r1, r2, r3 be the index number of rows 1, 2, and 3 respectively
and c1, c2, and c3 be index number of columns 1, 2, and 3,
respectively. Thus,
Occupied Cell AX: r1 + c1 = 4
BX: r2 + c1 = 16
BY: r2 + c2 = 24
CY: r3 + c2 = 16
CZ: r3 + c3 = 24
To solve for the row and column index:
• start by letting r1 = 0.
• Subtracting the r1 = 0 in the first equation, then c1 = 4.
• Substituting the value of c1 = 4 in the second equation,
then r2 = 12.
• Substituting the value r2 = 12 in the third equation, then c2 = 12.
• Substituting the value of c2 = 12 in the fourth equation, then r3
= 4.
• Substituting the value of r3 = 4 in the last equation, then c3 =
20.
Step 4. TEST FOR OPTIMUM SOLUTION
To test for optimality, determine improvement potentials for each
unoccupied cell. The improvement potential for each unoccupied cell is
determined by subtracting the row index and column index from the
unit transportation cost of the unoccupied cell.
Improvement Potentials of Unoccupied Cell
= Unit transportation Cost of the Unoccupied Cell - Row
Index - Column Index
Test for Improvement
Unoccupied
Cell AY: 8 - 0 - 12 = -4
Cell AZ: 8 - 0 - 20 = -12
Cell BZ: 16 - 12 - 20 = -16
Cell CX: 8 - 4 - 4 = 0

In this case, the unoccupied cell BZ with an improvement index of -

16, which represented an improvement potential of P16 per unit.
Hence, an improved solution is possible.
Step 5. DEVELOP AN IMPROVED SOLUTION

Focus on the occupied cell that has the largest negative improvement
potentials. Improving the solution involves reallocating quantities in the
transportation table. The stepping stone path for the unoccupied cell with
most negative improvement potentials number is necessary for determining
the quantities that can be allocated while retaining the balance of supply and
demand for the table. The stepping stone path of cell BZ is illustrated in
Table 1a.
Ct = 158(4) + 16(16) + 25(24) + 143(16) + 179(16) = P6640
Row and Column Index:
Occupied Cell
AX: r1 + c1 = 4
BX: r2 + c1 = 16
BY: r2 + c2 = 24
BZ: r2 + c3 = 16
CY: r3 + c2 = 24
To solve for the row column index for Table 2:
• start by letting r1 = 0. Substituting the r1 = 0 in the first
equation, then c1 = 4.
• Substituting the value of c1 = 4 in the second equation, then r2 =
12.
• Substituting the value r2 = 12 in the third equation, then c2 = 12.
• Substituting the value of r2 = 12 in the fourth equation, then c3 =
4.
• Substituting the value of c2 = 12 in the last equation, then r3 = 4.
Test for Improvement
Unoccupied
Cell AY: 8 - 0 - 12 = -4
Cell AZ: 8 - 0 - 4 = 4
Cell CX: 8 - 4 - 4 = 0
Cell CZ: 24 - 4 - 4 = 16
 Since the improvement potentials are all positive and
zero, thus, the optimum solution is obtained.
Decision:

Source A should supply 158 units to destination Y, source

B should supply 41 and 143 units to destinations X and Z,
respectively, and source C should supply 133 and 46 units
to destinations X and Y, respectively in order to minimize
the cost of transportation to P6,008.
 In maximization problem, use the same procedure as in
minimization problem, except that instead of finding the
most negative value in the computation for improvement,
the greatest positive value is determined. A positive value is
the improvement index indicates the greatest contribution to
the objective.