Transportation Problem 225

ProfitCaleulation :
Allcated cell From To No. of units Unit proft Total profit
G M 14 56

G Ms 99

Ge M 4 12

M¡ 16 5 80

Total units 45 Toal profit 247

Aiter : The maximisation case mày aiso be sokved by allocating as many units as passible in the
cell with highest proft. This is a direct method called "highest profit entry method.
Without conerting the matrix into equivalent cast matrir. Houeer, this method may
lead to certain confusion and hence not discuSSed at length.
Note : ARSRET of IBFS with the three methods (NWCM, VAM and LCEM) ned not be same.

55 Optimisation of Transportation Problem

After obtaining IBFS by one of the three method viz., NWCM, VAM or LCEM,
we move towards optimality. To find the optimal solution we have two methods
1. Stepping Stone method.
2. MOdified Dlstribution (MODI) method.
These are discussed in the following sections.
55.1 Stepping Stone Method
This method is developed by A.Charnes. In this method we use the
index. The algorithm is as follows. inprovement
Algorithm:
Obtain IBFS :
Step I : Oblained Initial solution by any suitable method
etc.
such as NWCM, VAM, LCEM
Step 2: Check degeneracy :
Check whether there is any degeneracy. This is
condition that the number of allocated cells is less than checked by the degeneracy
sum of mumber of rows and
number of columns minus one.
226

n (C) 2n (r) + n (c) - 1 [or simply n (G)2r +tc- ])

Non-degenerate :
<n (r) +n (c) - 1 [or simply n (C)<rtc- 1]
Degenerate :n (C)
Where n(Gy) is no. of allocated cells in IBFS, n(r) is no. of rows and n(c) is n0.
of cohumns of TP. If there is degeneracy, resolve it, else move to step-3. (Degeneracy
case is explained later).
Step 3: Calculate Improvemnent Index: IBFS may or may not be optimum, To check
whether the IBFS is optinum or not, we calculateImprovement Index, which
indicates possibility of cost reduction by assigning one unit to unallocated cell
This is done as follows :
(i) Connect one un-allocated cell at a time with all other allocated cells as corners
of aloop. The loop need not always be a square. Itmay be any shape as given
below.

FKGLIRE 5.5:

Further,the loop should always be closed and should contain either

or vertical lines only, provided all corners are horizontal
is to be found. Aiso the loop lines may allocated cells except one whose ndex
intersect, but the
corner and has no importance. The loop line may go overpoint of intersection is nota
celland such cells have no an unallocated or allocateu
interference in calculation of index.
Thus after drawing the loop, give
alternatively positive sign to the un-allocated cell cost a
negative
cells to find the index.
and positive the corners of the cells. Sum up
to
these cose
Step 4 : Revision to Find Improved Matrix : If
solution is reached (IBFS itself is all the indices are positive, the optimal
unallocated cell with most OBFS). But, ifany value is negative,select
the seleced cell along negative then transfer possible number ofof unitsto
the loop and
cells.
readjust the supply/demand of allocated
Step 5: Repeal : Repcat
step 3&4 untill allthe
indices are positive.
Transportation Problem
227
Flow Chart for Stepping Stone Method:

Start

Obtain |BFS by any method

such as NWCM/VAMLCEM etc.
Is the
solution degenerate Resolve degeneracy by allocating
i.e.. n(C)<n(r) + n(c)- 1? Yes
E SUch that at Ea.
to the appropriate cell(s)
No

Calculate Improvement Index

" Draw loop to cach unallocated cell with all
other alkocated cells
" Add and subtract the costs alternatively to find index

0s
improvement index No Optimal soBution is obtained.
negative to any Compute associated cost Stop
cell and print solution
Yes
Revise solution by adjusting and
transferring the allocated units

AGURE S6:

Consider the problem given in illustration - 2

ILLUSTRATION 10
Di D2 D, Da Supply
2 30
3 3 S0
5 20

Demand 20 40 30 10
 Operations Research: Theory and
228
Practice
Solution :
Now let optimise this by stebping stone method.
: (Refer Illustration - 2) the IBFS by North west corner nle:
Step I: Obtain IBFS
D D D4 Supply
D,
20 10
4 30
2
30 20
2 1 50
10 10

5 20

Demand 30 10 100
20 40

Step 2: Degeneracy test by n(C) Zrtc-l

No. of allocated cells =6

(O, D). (0. D). (0, D,). (0,. Dy). (0, D,). (Og, D))
No. of rows = 3
No. of columns = 4
As no. of allocated cells i.e., n (C; is (6) equal to n (r) + n
(c) - I i.¬,
3+4-1 =6, there is no degeneracy in the TP.
Step 3 : Optimality Tst By Improvement lndex : Loops are drawn for
given below unallocated cells as
Loop for (0, Ds) Cell.
Loop for (O,, D
D D D, D4
20 10 D, D¡ D, D,
20 10
4
4
$0 20 1
$0 20
g+ 2
10
4 2 5 10

Index : +l-2+3-2=0 2 5
Index : +4 -9+5-2+3- 2 =-1
Transportation Problem
229
Loop for(O, D):
Loop for (O, D,):
D, D D, D,
20 10 D, D Dg D4
20 10
S0 2
20 4
30 20
10 10 +2
9 10 10
4

Index : +§-1+-3 =+ 1
Index : +4 -5+2-3+2- 1=-1
Loop for (0,, D) Cell. Loop for (O,D,):
D, D D, D4 D, D D, D4
20 10
20 10
1
4
30 20
30 20
2
10 10
10 10
5 9
4 5 9
Index : + l-2+5-9=-5 Index :+2-5+ 2-8 =- 4
Of all the above the most negative index is for (O9, D) cell i.e., - 5.
we transfer max. possible number of units (i.e., 10) to this cel Therefore
from (03, D).
Step 4: Revision : When 10 units are transferred from (O_, D ) to
(0, D4), we have to
reduce 10 units from (O, Dg) and add at (Os, Ds). This addition or
can be easily understood by sigm on the corner of the loop in the subtraction
revised natrix is. cell. Thus the
D, D¡ D D4
20 10
30
1 4
30 10 10
50

20 20
4 5

20 40 30 10

Step 5: Repeating Steps 2 to 4 :No degeneracy is found and the /ndices for unallocated
cells are as follows.
230 Operations Research : Theory and
Unallocated Loop Index Practice
+ 1-2+3-2=0
(0,, D) (O,, D) ’ (O, D4) ’ (0, Dy) ’ (0, Dg)
(0,, D) (O,, D) (0g, D,) - (0,, D,) +4-1+3-2=+4
(O,, D,)
(Oz. D,) - (0,, D,) (0,, D,) (Oz. Dy) + 3-
(0, D) 1+2-3=+ 1
(Og, D,) (Og. Di) (0, D,)’ (0,, Dg) ’ (Og, D) + 4-1 +2- 3 +
’ (Og, D) ’ (Os, D,) 2-5=-1
(0,. D,) (Og. Dg) (O, D) (0z, D)’ (0, D) +2-3+2-5 ={-4
(O, D) (O, D) ’ (o, D) ’ (0, Dy ’ (0,. D) +9-1+2 -5=+5
As (Og, Ds) shows most negative index we have to transfer 20 units,
possible number of units to be transferred can be found by least allocated (this max
the negative cornered cells of the loop). The revised soution is
20
iunits among
10
30
1 4
10 30 10
50

20
20
4 2 9
20 40 30 10
Again, the indices in the revised matrix are
for (01, Ds): 0 : (01, D):+4; (O, D):+l remain same as
for (O3, D): Loop is (O3, D,) (Og, D)’ (0j, Ds) ’ above tableau.
(01, D) and index is
for (Os, Dg) : Loop is (O, Ds) ’ (Oz, D) ’ (0, D) +4-2+2-l=+3
(Og, D) and index is
for (O, D) :Loop is (03, D) ’ (0z, D) ’ +5-2+3-2+4
(0, Ds) (O3, Ds) index is
+9-1+3-2=+9
Thus all theindices are positive, therefore optimal
Soution is solution is obtained.
Allocated From To No. of units| Unit coSt
G or (O, D,) Total cost
Gi2 Or (0,, D)
D, 20 1 20

Cy Or (O,, D)
Da 10
20
O D2 10 3
Cgg Or (O,, D4) 30
D, 30
2
Cg4 Or (O;, D) O 60
D4 10
Cop Or (Og, D,) 10
D 20
40
G. Total cost 180
Transportation Problem
231
Remark : There is an alternate optimal solution the above
by zero index value for unallocated cells. problem, which is indicated
solution is
Here (O,. D,) shows zero. Thus the
D, D, D, DA
20 10
30
2 4
20 20 10
3 50
3 2
20
O 20

20 40 30 10

Optimal (Min) cost = l x 20+ l× 10+3× 20+2x20+ lx 10 +2 x 20

180
(Red. luedreáon -20)
Consider the TP of maximisationcase given in illustration -5 and 9.
ILLUSTRATION 11

Maximise the TP

M, M; M
GI 4 4 9 25
Gz 3 5 8 20
18 16 45

Solution:
Step 1 : The IBFS by VAM or LCEM is
Equivalent Cost Matrix Profit Matrix (Original)
14 11 14 11
25 25
5 4 4 9
4 16 4 16
6
20 20
4 3 5
18 16 11 18 16

Step 2 : LDegeneracy lest :

No. of rOws (2) +No. of col. (3) 1=4
No. of allocated cells = 4; ie., n (C) =n (r) +n (c) - 1
:. No degeneracy
 Operations Resear
232 Practice
Step 3 : Optimality lst : For (G - M_)
For (G, Mg) 14 11
25
14 25 5
4 16
20
I6 20 4
6

18 16
18 16 11
Index : +l-0+5-6=0
Index : + 5-4+ 6-5 =+2

Since indices for all unallocated cells is positive (or zero), the optimal solutiem
is attained. And the solution is

Max proit =4x 14+9x 11+3x4+5 x 16= 247 (For delailed calculation rf
iustration 5 or 9)
Remark: The above problem yields multiple optimal solution. This can be
identifiedby zeroindex value fornon-allocatedcells.
The solution is
M M
G1
18
7 25
4 4
16 4
G 5
20
8
18 16 11

Profit = 4x 18+9x7+5x 16 +8x4

= 72+63 + 80 +32=247
Note: For enbalanced case also, the stebping stone
and obtaining IBFS. method is abblied in the similar uay after
balctag
55.2 MODI Method
Modified
and DUAL and Distribution
is simplified(MODI)
or
method is based on the properties of PRIMAL
algorithm is given below. modified version of stone method. The
Algorithm :
stepping
Step 1: Initial Solukion : Develop
IBFS by any method such as
NWCM,,VAM, LCEMetc.
Transportation Problem 233

Step 2 : Degeneracy Test : Check the presence of degeneracy by n (C) <n () +n 1

()-
where n (C) is number of allocated cells, n (r) is number of rows and n (c) is
number of columns. If n(C) 2n ()+n (c)- 1, then there is no
degeneracY,
otherwise resolve degeneracy (case of degeneracy is explained in the section to follow).
Step 3: Shadow Prices Calculation : Find shadow prices of each row and each column with
the formula

where C =Cost in allocated cell

4;= Shadow price of row
v,= Shadow price off column.
As the number of equations will be equal to number of allocated cells and
mumber of variables are sum of no. of rows and no. of columns, value of one of the
variables is to assumed as zero while calculating the values of u; and y
Step 4 : Optimality Test : Find the cost difference (C;-Z) for unallocated cells by using
the formula.

where C; iscost in unallocated celland ; &e v; are the corresponding values

(shadow prices) found in step -3.
Now, if all. the values of C-(u;+v) 20 i.e, positive, then the solution is
optimal, otherwise improve the solution by step 5.
Slep 5: Identify most negative value of Cif - (u; +u) calculated in step -4 among all
unoccupied cells and draw a closed loop with (anly vertical/ horizontal lines)
(allocated)
with this cellas one of its corners while allother corners as occupied
about drawing
cells. (Refer stepping stone method for further details
signs to all
loop].Starting at the selected cell as tue, give alternate +e and- w and
least allocation
Corners. Among all the negative sign corners choose the
and subtract at
transfer this amount along the loop. [Add at positive corner
negative corner].
Sep6: Repeat steps 2 o 5 till the Cif - (4; +v) 20 for all the unoccupied cells.
Slep 7: Calculate the cost [ Profit in the case of maximisation TP)
234
Method :
Flow Chart for MODI
Start

Obtain lBESby any method

etc.
such as NWCM/VAMLCEM

Is the Resolve degeneracy by allocating

solution degenerate? Yes suchthat a te a.
L.e.. n(c,) <nr) + n(c)- 1? to the appropriate cells)
No

Calculate u, and v, (shadow prices)

such that cost of allocated cell (c,) =y+,

Calculate c,'-(u t v) for unoccupied cells

Is
Yes
Optimalsolution is obtained.
CH-(u, t v)20 Compute associated cost Siop
for all the cells? and print solution
No
Revise solution by adjusting and
transferring the allocated units

RGURE 5.7:
Consider the TP of illustration - 2. Let us optimise this by MODI method now.
ILLUSTRATION 12

Optimise the T.P

D, D;D, D, Supply
4 30
3 3 2 50
03 2
59 20
Demand 20 40 30 10 45
Transportation Problem
235
Solution:
Step I : Oblain Inital Solution :
Refering to illustration - 2, the lBFS for the above TP by
Method is as follows. North West Corner
TERATION TABLEAU 1:
D, D D, D, Supply
20 10
30
4
30 20
50

10 10
20
4 5 9
Demand 20 40 30 10 100

Step 2: Degeneracy lest :

No. of occupied cells n (C;) = 6
No. of rows i.e., n (r) =3
No. of columns i.e., n (c) =4
n (CH) =n () +n (c) - 1,
There is no degeneracy.
TERATION TABLEAU2:
D, D D, D4 Supply Shadow price (u;)
20 10
30
2 4
u=0 (assumed)
30 20 50

10 10 20
4 2
ig = 4
5 9
Demand 20 40 30 10

Shadow Price (u) v, = 1 Ug =2 Uy =l v4=5

(Assumed) For Ocupied Cells Assune Cij =4;tv
V|tu= 1, u t Ug = 2, ug t vg = 3,
uy t Ug =, ug t vg = 5, ug + v4 =9
We get above 6 equations with seven variables u), ug, ug and v, vg, Vg and v4
Thus one of the variables ( say u)is assumed to be zero.
 Operations Research : Theory and
236 Practice
as mentioned in the above tableas
be found
Then allother values can
Ci- (u; +v) 20
Step 4 : ptimality test : To check
ITERATION TABLEAU 3:
D4 SuppBy
D, D D,
10 30
20
1 4
9
20 -5, 50
+1 30

O\3 -1 -4
2
10 20 Ug =4

4 2

40 30 10
Demand 20
V4 =5

Sample Calculations :
for (01, Ds) cell Ci= 1, ;=0, y;= 1
G-(u t v)= l- (0 +l) =0
for (O, D) cell G94 = 1, ug = 1, v4 = 5
C24- (ug+v)=l-(l+5) =-5
For (O3, D) 4-4+.l) =-1
and similarly for other unoccupied cells
calculations, we find most negative value
Stet- 5: Revising the Solution : From the above start constructing closed loop from
ofc -(u; + v) for (O,D4) cell as- 5. We (0 Dy)
this cell with other occupied cells i.e.; (O, D4) ’ (O, D) ’ from
+,- alternatively
’ (O3, LD) and on the corners of this loop we give
while (0, Dy
(Og, D4) onwards. Thus (O, D¡) and (O5, Dg) get addition (4) marked cells,
and (O3, D4) get subtraction (-). Among these negative
cell. (10units
(Os, D4) has least allocation as 10 and thus direction is form this
are transferred upwards). Revising the allocations in this way, we get.
TERATION TABLEAU4:
D, D Dg D, Sugfply
20 10
30

30 10 10
50

20
20
Os\4 9
Demand 20 40 30 10 100
 237
Step 6: Repeat steps 2lo5:
ITERATION TABLEAU5:
D, D¡
20
D, D, Supply
10
o +4
30
30 10 10
O 50

20 +5
O 20 4
9
Demand 20 40 30 10
1 2 0

ITERATION TABLEAU -6:

D, D¡ D, D, Supply 4,
20 +4
30 0
4
+1 10 30 10
50
O 2
+3 20 +4 +9
20
4
Dennand 20 40 30 10

In the above solution, the values of C;- (4; +) 20 for all unoccupied cells.
Therefore the opimality is reached.
Step 7: Cost calculations :
The solution is tabulated as follows.
Cell From To Unit Cost No. of Total Cost
Units
20 20
Cji or (0, D) DË
10 20
|Ciy or (O,, D,) D¡
3 10 30
Cqy Or (Oz, D,) Dg
30 60
Cys or (0,, D,) D,
10 10
Czy or (0 D) D
20 40
Cyg Or (Dg, D,) D
Total Cost 180

Note : This problem yields alternate optimal sohution. Refer illustration 20 whder section 3.11.1