Operations Research 2015

CHAPTER THREE

TRANSPORTATION AND ASSIGNMENT MODELS

3.1 Transportation Model

Transportation model is special type of linear programming model which is easy to express
mathematically in terms of LP model. It can be solved by simplex method, but since it involves a
large number of variables and constraints; it takes a long time to solve it. As a result of this, other
transportation algorithm; namely stepping stone and MODI (modified Distribution) method have
been developed.

Transportation model deals with transporting goods and services from several supply centers or
origins to several destinations or demand centers through different shipping routes with the
ultimate objective of determining the number of units of an items that should be shipped from an
origin to a destination in order to satisfy the required quantity of goods at each destination and
the total cost of transportation or time will be minimized. Therefore, the study of transportation
problem helps to identify optimal transportation routes along with units of commodity to be
shipped in order to minimize total transportation cost. However, it can also be applied to the
maximization of some total value or utility. Forexample; financial resources are distributed in
such a way that the profitable return is maximized.

Mathematical model of transportation problem

A transportation problem typically involves a set of sending locations which are referred to as
origins or supply centers, and a set of receiving locations, which are referred to as destinations or
demand centers. In order to develop a model of a transportation problem, it is necessary to have
the following information.

 Supply of quantity or capacity of each origin

 Quantity demanded at each destination
 Unit cost of transporting one unit of product from each origin to each destination.

Assumptions in transportations model

 All goods are assumed to be homogeneous so that any origin is capable of supplying any
destinations
 Transportation costs are a direct linear function of the quantity shipped over the route
 Quantity shipped should be equal to the total quantity demanded
 The unit transportation cost of the item from all sources to destinations is certainly known
 Items can be transported conveniently from all sources to destinations
 The objective is to minimize the total transportation cost for the organization as a whole
and not for individual supply and distribution centers.

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Example: To illustrate the mathematical model formulation of transportation problem, consider

the following transportation problem involving three sources and four destinations.

Destinations

To From D1 D2 D3 D4 supply
Sources S1 3 1 7 4 300

S2 2 6 5 9 400

S3 8 3 3 2 500

Demand 250 350 400 200 1200

Let Xij represent the number of units of the product to be transported from i(i=1,2,3) and to
destination j (j=1,2,3,4) sources.

The transportation problem is stated as an LP model as follow:

Minimize Z= 3X11+X12+7X13+4X14+2X21+6X22+5X23+9X24+8X31+3X32+3X33+2X34

Subject to X11+X12+X13+X14 =300

X21+X22+X23+X24 =400 Supply constraints

X31+X32+X33+X34 =500

X11+ X21+X31 =250

X12+X22+X32= 350 Demand constraints

X13+X23+X33=400

X14+X24+X34=200

Where, Xij≥0

N.B In the above LP model, there are m x n variables and m + n constraints where m is the
number of rows and n is the number of column. Thus, 3x4 =12 decision variables and 3+4 =7
constraints are there in above problem. However, because the transportation model is always
balanced, one of these constraints must be redundant. Thus, the model has an m + n -1
independent constraint equation which means that the starting basic feasible solution consists of
m+n-1 basic variables.

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Solving the transportation model

Solving of the transportation model involves:

Step 1: Formulating the problem and arranging the data in the matrix form

This involves expressing supply origin, requirements at destinations and cost of shipping from
origins to destinations in the form a matrix. A check is made to find that whether total supply and
demand are equal. Ifyes, the problem is said to be a balanced or self-contained or standard
problem. Ifnot, a dummy origin or destination is added to balance the supply and demand.

Step 2: Find the initial basic feasible solution

There are three types of techniques available to find initial basic feasible solution. These are:

 North West Corner method

 The Least Cost Method
 Vogel’s Approximation Method(VAM) method

N.B. the initial solution obtained by any of the three

 The solution must be feasible i.e. it must satisfy all the supply and demand
constraints(also called rim condition)
 The number of positive allocations must be equal to m+n-1, whenm is the number of
rows and n is the number of columns. Any solution that satisfies the above conditions is
called non degenerate basic feasible solution, otherwise degenerate solution.

Step 3: Test for optimality and iterate towards optimal solution if required

There are two techniques of testing optimality. These are: stepping stone and MODI (Modified
Distribution) method.

3.2 METHODS OF FINDING INITIAL FEASIBLE SOLUTION

F North –West Corner method

It is single and efficient method to obtain an initial solution but its major disadvantage is that it
does not take into account the cost of transportation on any route of transportation.

 Start with the cell at the upper (North West) corner of transportation matrix and allocate
commodity equal to the minimum of the rim values for the first row and first column
 check whether exactly one of the row/column corresponding to the North West corner
cell has zero supply/demand respectively
 Delete row or column with respect to the current North West corner cell which has the
zero supply/demand

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 Delete both the row and the column with respect to the current North West corner cell.
F Least Cost Method

This method takes into account the minimum unit cost of transportation for obtaining the initial
solution. With this method;

 Select the cell with the lowest unit cost in the entire transportation matrix and allocate as
much as possible to this cell. Then, eliminate or line out that row or column in which
either the supply or demand is exhausted.
 After adjusting the supply and demand for all uncrossed out rows and columns, repeat
step 1 until the entire available supply at various sources and demand at various
destinations is satisfied.
F Vogel’s Approximation Method (VAM)

VAM or penalty or regret method is a heuristic method and is preferred more than the other two
methods (NWC and Least Cost Method). In this method, each allocation is made on the basis of
the opportunity or penalty or extra cost that would have been incurred if the allocations in certain
cells with minimum unit transportation cost were missed. In this method allocations are made so
that the penalty cost is minimized. The advantage of this method is that it gives an initial solution
which is nearer to an optimal solution or is the optimal solution itself.

Steps of VAM

Step1: Calculate the penalties for each row and column by taking the difference between the
smallest and nextsmallest unit transportation cost in the samerow and column. The difference
indicates the penalty or extra cost that has to be paid if one fails to allocate to the cell with the
minimum unit transportation cost.

Step2: Select the row or column with the largestpenalty and allocate as much as possible in the
cell that has the leastcost in the selectedrow or column and satisfies the rim conditions.

N.B. If there is a tie in the values of penalities, it can be broken by selecting the cell where a
maximum allocation can be made.

Step3: Adjust the supply and demand and cross out the satisfied row and column

Example: take the following transportation matrix table with three sources and four destinations.
And then, find the initial feasible solution by using North West Corner, Least Cost, and VAM
methods.

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Destinations

From supply
D1 D2 D3 D4
To
.
S1 3 1 7 4 300
Sources
S2 2 6 5 9 400

S3 8 3 3 2 500

Deman 1200
250 350 400 200
d

1. By North West corner method

Since the sum of the supplies is equal to the sum of the demands, the given transportation
problem is a balanced one.

The supply and the demand values corresponding to the North West corner cell (1, 1) are 300
and 250, respectively. The minimum of these values is 250.hence, allocate 250 units to the cell
(1, 1), and subtract the same from the supply and demand values of the cell (1, 1).now the supply
to destination one is fully satisfied. Hence, this column is deleted and the resultant data is as
follow.

To Supply
D1 D2 D3 D4
From

S1 3 250 1 50 7 4 300

S2 2 6 300 5 100 9 400

S3 8 3 3 300 2 200 500

Demand 250 350 400 200 1200

Since the numbers of allocations are equal to m+n-1, the solution is feasible and non degenerate.
Hence, the total cost which is the sum of unit cost in occupied cell multiplied by unit allocated in
that cell.

Total cost =3*250+1*50+6*300+5*100+3*300+2*200 =$4400

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2. By Least Cost Method

Select the cell with the lowest unit cost in the entire transportation matrix and allocate as much
as possible to this cell. Looking in the transportation matrix the minimum unit cost is 1 which is
found in the cell (1, 2).the corresponding supply and demand values are 300 and 350
respectively. The minimum of these values is 300.Hence; allocate 300 units to cell (1, 2) and
subtract from the supply and demand values and continue allocating a maximum units to each
cell with minimum unit cost in each row or column until the supply and demand at each origin
and destination exhausted.

To From supply
D1 D2 D3 D4

S1 3 1 300 7 4 300

S2 2250 6 50 5 100 9 400

S3 8 3 3 300 2 200 500

Demand 250 350 400 200 1200

Since the numbers of occupied cells are equal to m+n-1, the solution is basic solution and non
degenerate solution. Now, the total cost by using the least cost method is:

Total cost = 1*300 +2*250+6*50+5*100+3*300+2*200 =2900

3. By VAM Method

The maximum penalty is 3* which occurs in row 2. Hence, the cell with the least cost in the row
2 is to be identified. This occurs at the cell (2, 1). The supply and the demand values
corresponding to the cell (2, 1) are 400 and 250, respectively. The minimum of these values is
250.Then, allocate 250 to the cell (2, 1) and adjust supply and demand.

Since the column one demand is exhausted, it is important to revise the penalties. Again, the
maximum penalty cost is found in the row 1, then, select a cell which contains a minimum unit
cost. Hence, cell (1, 2) contains a minimum unit cost and the corresponding supply and demand
values are 300 and 350 and allocate to cell (1, 2) a minimum of 300 and 350.

Since, therow one supply is exhausted; we need to revise the column penalties. Thus, the
maximum penalty is 7 which is found in column 4 and the minimum cost is found in the cell, (3,
4) which is 2. The supply and demand values corresponding to the cell (3, 4) are 500 and 200
and then allocate a minimum of these.

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Since, the demand in the column is exhausted, it is important to revise the row penalties. After
revising the row penalties, the maximum penalty is 3 which is found in the column 2 and the
minimum cost in the column 2 is 3 which is found in the cell (3, 2). The corresponding supply
and demand values are 500 and 300 respectively. Then, allocate a minimum of these to the cell
(3,2) and adjust supply and demand.

From To D1 D2 D3 D4 supply Row penalty

S1 3 1 300 7 4 300 2 3*

S2 2 250 6 5 150 9 400 3 * 1 1*

S3 8 3 50 3250 2 200 500 1 1 0

Demand 250 350 400 200 1200

Column penalty1222

…. 3 2 7*

N.B. Since, the number of allocation is equal to m+n-1, and then is basic feasible solution.

Therefore, the total cost of transportation by VAM is equal to 2850 which means

Total cost =300*1+2*250+5*150+50*3+3*250+200*2 =2850

Conclusion: The total cost of transporting the allocated amounts of commodity to each
destination by NWCM, LCM and VAM method is 4400, 2900 and 2850 respectively which
indicates VAM is more efficient than NWCM and LCM.And also, comparing total transportation
by NWCM and LCM, LCM is more efficient than NWCM. Therefore, we can say that VAM is
better than NWCM and LCM and LCM is better method than NWCM.

3.3 TESTS FOR OPTIMALITY

Once an initial solution is obtained, the next step is to check for its optimality. An optimal
solution is one where there is no other set of transportation routes (allocations) that will further
reduce the total transportation cost. Thus, we have to evaluate each unoccupied cell or unused
route in the transportation table in terms of an opportunity of reducing total transportation cost.
An optimality test can, of course, be performed only when the feasible solution satisfies the
following conditions:

 The number of required allocations which is given by m+n-1 is equal to the actual
number of allocation which is equivalent to the number of loaded or occupied cells

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 When these allocations are independent position which means it is impossible to

increase or decrease any allocations without either changing the position of the
allocation or violating the row and column restrictions

An unoccupied cell with the largest negative opportunity cost is selected to include in the new set
of transportation routes (allocations). This value indicates the per unit cost reduction that can be
achieved by raising the shipment allocation in the unoccupied cell from its present level of zero.
This is also known as an incoming cell or variable. The outgoing cell or variable is in the current
solution is the occupied cell or basic variable in the unique closed path (loop) whose allocation
will first become zero as more units are allocated to the unoccupied cell with the largest negative
opportunity cost. The process is continued until there is no negative opportunity cost. That is the
current solution cannot be improved further. This would be the optimal solution. Hence, in order
to test the optimal of a given feasible transportation problem two basic techniques are
available. These are the stepping stone and MODI (Modified Distribution) methods.

1. Stepping stone method

Steps in stepping stone

The stepping stone is used for finding the opportunity cost of empty cells. Every cell is to be
evaluated for its opportunity cost. To do this, follow the following steps;

Step1: Solve the problem and find the initial feasible solution by one of three methods
(NWCM, LCM and VAM) and then select one of the empty cell and put + sign in that empty cell

Step2: Starting from the chosen empty cell, trace a path in the matrix consisting of a series
of alternate horizontal and vertical lines. The path begins and ends in the chosen cell.
Remember, there should not be any diagonal movement. We have to take turn only at loaded
cells and move to vertically downward or upward or horizontally to reach another loaded cell. In
between, if we have a loaded cell, where we cannot take a turn, ignore that and proceed to next
loaded cell in that row or column. The path may skip over any number of occupied or
unoccupied cells.

Mark the corner of the paths in the chosen vacant cell as positive and other corners of the path
alternatively -ve, +ve,-ve and so on.

Step 3.Calculate the opportunity cost of each empty cells along a series of paths as

Actual cost of the empty cellij– cost of the loaded or occupied cells in the loop for the chosen
cell

Step 4: Check for optimality which means:

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If any cell evaluation is negative, the cost can be reduced so that the solution under consideration
can be improved i.e. it is not optimal. On the other hand, if all cell evaluations are positive or
zero, the solution in question will be optimal. Therefore, select a cell with the most negative
evaluation or opportunity cost as incoming cell and a cell with minimum load along path marked
with negative sign as a leaving cell. And continue the evaluation of each empty cell until the
opportunity cost of all empty cells become positive or zero.

Step 5: Identify the cell with the lowest load or quantity allocated in the cells marked with
negative sign.

Step 6: Add this lowest load to the cells where plus sing is marked and subtract from the
load of the cell where negative sign is marked.

 Do not alter the loaded cells which are not in the loop
 While adding or subtracting at each turn or corner, it is necessary to see the rim
requirements are satisfied
 Continue the evaluation of each empty cell until the opportunity cost of each cell
become positive or zero.

Example: consider the previous example of transportation problem involving three sources and
four destinations.

Destinations

From supply
D1 D2 D3 D4
To

S1 3 1 7 4 300

S2 2 6 5 9 400
Sources
S3 8 3 3 2 500

Demand 250 350 400 200 1200

Required: Obtain the initial feasible solution by using North West Corner Method and then;
optimize the solution using stepping stone method.

Solution: Application of the North West Corner method to this problem yields the result as
shown below and the total cost of the solution obtained using the NWCM is 4400.

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Initial feasible solution by NWCM

To From supply
D1 D2 D3 D4

S1 3 250 1 50 7 4 300

S2 2 6 300 5 100 9 400

S3 8 3 3 300 2 200 500

Demand 250 350 400 200 1200

N.B Verify whether we can perform optimality for the initial feasible solution by NWCM.We
can only perform optimality test when:

 The required number of allocation (m+n-1) is equal to the actual number of occupied
cells. Where m is number of rows, and n is the number of columns,
 These m+n-1 occupied cells are in independent positions

Hence, for the above initial feasible solution by NWCM, we can perform optimality test. Then,

Evaluate the opportunity cost of each empty cell by drawing a loop for each empty cell. Hence,

Cell Path way (loop) Net evaluation

(2, 1) -3(1, 1) (1, 2) +1 3-6+1-3 = -6

+3 (2, 1) (2, 2) -6

(3, 1) (3, 1) (3, 3) (2, 3) (2, 2) (1, 2)(1,1) =8-3+5-6+1-3 =2

(3.2) (3, 2) (3, 3) (2, 3) (2, 2) =3-3+5-6 =-1

(1, 3) (1, 3) (1, 2) (2, 2) (2, 3) = 7-1+6-5 =7

(1,4) (1,4) (1,2) (2,2) (2,3) (3,3) (3,4) =4-1+6-5+3-2=5

(2, 4) (2, 4) (2, 3) (3, 3) (3, 4) = 9-5+3-2 =5

Since cell (2, 1) and (3, 2) are negative, the cost can be reduced so that the solution under
consideration can be improved. Therefore, since cell (2,1) is the most negative cell, by allocating
one unit to this cell, the cost will be reduced by $6. Thus, add a minimum of the cells loaded
which is marked by negative sign to the cells marked with positive sign and subtract it from the

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cell marked with negative sign. Hence minimum of the cells marked with negative sign is 250.
Then, add it to the cell marked by positive sign which are cell (2, 1) and (1, 2) and subtract it
from the cell marked by negative sign which are cell (1, 1) and (2, 2). After, completing this, the
allocations looks like as follow.

To supply
D1 D2 D3 D4
From

S1 3 1 300 7 4 300

S2 2 250 6 50 5 100 9 400

S3 8 3 3 300 2 200 500

Demand 250 350 400 200 1200

Again, evaluate the opportunity cost of each empty cell by drawing a loop (closed path) for each
as follow

Cell loop or path net evaluation

(1, 1) (1, 1) (2, 1) (2, 2) (1, 2) =3-2+6-1 =6

(3, 1) (3, 1) (2, 1) (2, 3) (3, 3) = 8-2+5-3 =8

(3, 2) (3, 2) (2, 2) (2, 3) (3, 3) =3-6+5-3 = -1

(1, 3) (1, 3) (1, 2) (2, 2) (2, 3) =7-1+6-5 =7

(1, 4) (1, 4) 1, 2) (2, 2) (2, 3) (3, 3) (3, 4) =4-1+6-5+3-2 =5

(2, 4) (2,4) (2,3) (3,3) (3,4) (2,4) =9-5+3-2 =5

N.B Looking at the opportunity cost of cell (3, 2), there is still the tendency to reduce
transportation cost by allocating more units to the cell (3, 2).

Therefore, the minimum loads of the cell marked by negative along the path is 50, then add 50 to
the cells marked by positive sign and subtract the same amount from the cells marked by
negative sign. After adjustment the result is shown as follow.

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To From Supply
D1 D2 D3 D4

S1 3 1 300 7 4 300

S2 2 250 6 5 150 9 400

S3 8 3 50 3 250 2 200 500

Demand 250 350 400 200 1200

N.B. To check whether the current solution is optimal or not, again evaluate an opportunity cost
of each an empty cell by using stepping stone as follow:

Cell path net evaluation

(1, 1) (1, 1) (2, 1) (2, 3) (3, 3) (3, 2)(1, 2) = 3-2+5-3+3 =5

(3, 1) (3, 1) (3, 3) (2, 3) (2, 1) = 8-3+5-2 =8

(2, 2) (3, 2) (3, 3) (2, 3) = 6-3+3-5=1

(1, 3) (1, 3) (3, 3) (3, 2) (1, 2) =7-3+3-1=6

(1, 4) (1, 4) (1, 2) (3, 2) (3, 4) =4-1+3-2 =4

(2, 4) (2, 4) (2, 3) (3, 3) (3, 4) =9-5+3-2 =5

N.B since no empty cell with negative opportunity cost from the above evaluation, then the
current is optimal solution and the optimal total transportation cost is 2850 which is calculated as
follow;

Total transportation at optimal level = (1*300) + (2*250) + (5*150)+ (3*50) + (3*250) +

(2*200) =2850

2. MODI or U-V or Regret or Penalty Method

Steps of MODI method

Step-1 for an initial basic feasible solution with m+n-1 occupied cells, calculate Ui and Vjfor
rows and columns. The initial solution can be obtained by any of the three methods

Ui +Vj =Cij for occupied cells and also calculate U i+Vj for unoccupied cell based the Ui+Vj
relationship

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Step 2: Calculate an opportunity cost for unoccupied cell

An opportunity cost for unoccupied which indicates the per unit cost reduction that can be
achieved by an allocation in the occupied cell by using the following relationship.

dij = cij –(ui+vj) where dijrepresent an opportunity cost of empty cell

Step-3 Examine sign of each dij

i) If dij≥0,the current basic feasible solution is optimal

ii) If dij =0,then the current basic feasible solution will remain unaffected but an
alternative solution exist
iii) If one or more dij≤0, then an improved solution can be obtained by entering
unoccupied cell in the basis. An unoccupied cell having the largest negative value of
dij is chosen for entering into the solution mix (new transportation schedule). The
negative opportunity cost indicates the per unit cost reduction that can be achieved by
raising the shipment allocation in the unoccupied cell from its present level of zero.

Step-4 constructs a closed path (loop) for the unoccupied cells with largest negative opportunity
cost. Start the closed path with the selected unoccupied cell and mark a plus sign in this cell.
Trace a path along the rows (or column) to an occupied cell, mark the corner with a minus sign
and continue down the column or row to an occupied cell. Then, mark the corner with plus sign
and minus alternatively. Close the path back to the selected unoccupied cell.

Steps -5 select the smallest quantity amongst the cells marked with minus sign on the corners of
closed loop. Allocate this value to the selected unoccupied cells and add it to other occupied cells
marked with plus signs. Now subtract this from the occupied cells marked with minus signs.

Step -6 obtain a new improved solution by allocating units to the unoccupied cells and calculate
the new total transportation cost

Step-7 Further tests the revised solution for optimality. The procedure terminates when all d ij≥ 0
for unoccupied cells.

Example

Consider the previous example of transportation model (problem) which is illustrated as follow

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Destinations

To Supply
D1 D2 D3 D4
From
S1 3 1 7 4 300

S2 2 6 5 9 400
Sources
S3 8 3 3 2 500

Deman 1200
250 350 400 200
d

Required: Find the initial feasible solution by Least cost Method and optimize it by MODI
method.

The initial basic feasible solution by using the Least Cost Method is shown in the table below
and then optimizes it by using MODI method.
V1 = -3 V2=1 V3 = 0 V4= -1
To From Supply
D1 D2 D3 D4

U1=0 S1 3 1 300 7 4 300

U2=5 S2 2 250 6 50 5 100 9 400

U3=3 S3 8 3 3 300 2 200 500

Demand 250 350 400 200 1200

Step1: Verify whether the solution is basic feasible solution and optimality can be performed
which means verify whether;

 The required number of allocation is equal to the actual allocations; m+n-l.Hence m+n-
1=6
 The allocations are in independent position

Step-2 for an initial basic feasible solution with m+n-1 occupied cells, calculate U iand Vj for
rows and columns. Then complete the calculation of U i’s and Vj’s for other rows and
columns by using the relationUi +Vj=Cij, for all i and j occupied cells.

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For occupied cells

Let U1 =0, then

U1+V2 =1, 0+V2 =1, V2=1

U2+V1 =2, 5+V1=2, V1=-3

U2+V2 =6, U2+1=6, U2=5

U2+V3 =5 5+V3=5, V3=0

U3+V3 =3 U3+0=3, U3 =3

U3+V4 =2 3+V4=2, V4 =-1

Step -2 calculate the opportunity cost for each unoccupied cells by using the following
relationship

Cell

(1, 1) 3-(U1+V1) = 3-(0-3) = 3+3 =6

(1, 3) 7-(U1+V3) = 7-(0+0) =7-0 =7

(1, 4) 4-(U1+V4) =4-(0-1) =4+1 =5

(2, 4) 9-(U2+V4) =9-(5-1) =9-4 =5

(3, 1) 8-(U3+V1) =8-(3-3) =8-0 =8

(3, 2) 3-(U3+V2) = 3-(3+1) =3-4 =-1

N.B Since cell (3,2) has negative opportunity cost of -1 which means allocating one unit to this
cell will the reduce the cost by 1.Therefore,we need to assign a maximum unit to this cell to get
reduction in cost of transportation. In order to assign the maximum unit to the cell (3, 2), we
must construct a loop which is (3, 2) (3, 3) (2, 3) (2, 2).the minimum unit to be assigned
to the cell (3, 2) along the path which is marked by negative sign is 50.therefore, add this unit to
the cells marked by positive sign along the path and subtract from the cells marked by negative
sign. Then, the allocation after adjustment is as follow:

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V1 = -2 V2=1 V3 = 1 V4= 0
To From Supply
D1 D2 D3 D4

U1=0 S1 3 1 300 7 4 300

U2=4 S2 2 250 6 5 150 9 400

U3=2 S3 8 3 50 3 250 2 200 500

Demand 250 350 400 200 1200

Again, calculate the Ui’s and Vj’s for the occupied cells as follow

Let U1=0

U1+V2 =1, 0+V2 =1, V2=1

U2+V1 =2, 4+V1=2, V1=-2

U3+V2 =3 U2+1=3, U3=2

U2+V3 =5 U2+1=5, U2=4

U3+V3 =3 2+V3=3, V3 =1

U3+V4 =2 2+V4=2, V4 = 0

Calculate an opportunity cost for each unoccupied cells as follow

Cell

(1, 1) 3-(U1+V2) = 3-(0-2) =3+2 =5

(1, 3) 7-(U1+V3) = 7-(0+1) =6

(1, 4) 4-(U2+V4) =4-(0+0)=4

(2, 2) 6-(U2+V2) = 6-(4+1) =1

(2, 4) 9-(U2+V4) =9-(4+0) =5

(3, 1) 8-(U3+V3) =8-(2-2) =8

Therefore, since the opportunity cost of all empty cells are positive, then the current solution is
optimal and the corresponding total transportation cost is 2850 which is obtained as follow.
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Total transportation at optimal level =1*300 +2*250+5*150 +3*50+3*250+2*200 =2850

3.4 SPECIAL ISSUES IN TRANSPORTATION PROBLEM

There are a number of special issues in relation to the transportation model. They are:

i. Determining if there are alternate optimal solutions.

ii. Defining and handling degeneracy (too few occupied cells to permit evaluation of a
solution).
iii. Avoiding unacceptable or prohibited route assignments.
iv. Dealing with problems in which supply and demand are not equal.
v. Solving maximization problems.
3.5 ASSIGNMENT MODELS

There are many situations where the assignment of people or machines and so on, may be called
for. Assignment of workers to machines, clerks to various counters, salesmen to different sales
areas, service crews to different districts, are typical examples of these. The assignment is a
problem because people posses varying abilities from performing different jobs and, therefore,
the costs of performing the jobs by different people are different. Obviously, if all persons could
do a job in the same time or at the same cost then it would not matter who of them is assigned the
job. Thus, in assignment problem, the question is how should the assignment be made in order
that the total cost involved is minimized (or the total value is maximized when pay-offs are given
in terms of, say, profits).

Assumptions of the Assignment model

 Cost vector (Cij) ; the cost of assigning ith job (Task) to jth machine (person),is given
 Each man or machine is assigned to one and only one job.
 One person (machine)cannot do more than one job
 One job cannot do by more than one person
 Number of jobs equal to number of machines or persons.

Let us see logic of assignment of workplaces to employees of ABC Company in the following
diagram.

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Semera Abebe

Hawassa Getachew

Bahir Dar Mahlet

Adama Netsanet

Mathematically

Min.Z=C11X11+C12X12+C13X13+C14X14+C21X21+C22X22+C23X23+C24X24+C31X31+C32X32+C33X33+C34
X34+C41X41+C42X42+C43X43+C44X44

Subject to

X11+X12+X13+X14=1 X11+X21+X31+X41=1

X21+X22+X23+X24=1 X12 +X22+X32+X42 =1

X31+X32+X33+X34=1 X13+X23+X33+X43=1

X41+X42+X43+X44=1 X14+X24+X34+X44=1

HUNGARIAN ASSIGNEMNT METHOD (HAM)

A method, designed specially to handle the assignment problems in an efficient way, called the
Hungarian Assignment Method, is available, which is based on the concept of opportunity cost.

The method is applied as listed in the following steps:

Step 1. Select the smallest cost element in each row of the cost table and subtract this smallest
cost from each element in that row. As a result, there shall be at least one zero in each
row of this new table, called the Reduced Cost Table (Row Reduction).

Step 2.In the reduced cost table obtained, consider each column and locate the smallest element
in it and subtract the smallest value from every other entry in the column. As a
consequence of this action, there would be at least one zero in each of the rows and
columns of the second reduced cost table (Column Reduction).

Step 3.Draw the minimum number of horizontal and vertical lines (not diagonal ones) that are
required to cover the entire ‘zero’ elements. If the number of lines drawn is equal to

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 Operations Research 2015

n(the number of rows/columns) the solution is optimal, and proceeds to step 6. If the
number of lines drawn is smallest than n, go to step 4.

Step 4. Select the smallest uncovered (by the lines) cost element. Subtract this element from all
uncovered elements including it and add this element to each value located at the
intersection of any lines. The cost elements through which only one line passes
remain unaltered.

Step 5. Repeat steps 3 and 4 until an optimal solution is obtained.

Step 6.Given the optimal solution, make the job assignments as indicated by the ‘zero’ elements
as follows.

a) Locate a row/column which has only single ‘zero’ element. Assign the job
corresponding to this element to its corresponding person and cross out that
row/column.

b) If there is no row or column with only a single ’zero’ element left, then select a
row/column arbitrarily and choose one of the jobs (or persons) and make the
assignment. Now cross the remaining zeros in the column and row in respect of
which the assignment is made.
c) Repeat steps (a) through (c) until all assignments are made.
d) Determine the total cost with reference to the original cost table.
Example 1: Solve the assignment problem given for optimal solution using HAM. The
information is reproduced in the following table.

Time Taken (in minutes) by 4 workers

Job
Worker A B C D
1 45 40 51 67
2 57 42 63 55
3 49 52 48 64
4 41 45 60 55

Example 2: A computer center has three expert programmers andthree application programmes
to be developed. The head of the computer center, after carefully studying the programes to be
developed, estimates the computer time in minutes required by the experts for the application
programmes as follows:

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 Operations Research 2015

Programmers
Programmes A B C
1 120 100 80
2 80 90 110
3 110 140 120
Assign programmers to the programmesthat will minimize the total computer time.

Example 3:A marketing manager has five salesmen and four sales districts. Considering the
capabilities of the salesmen and the nature of the districts the manager estimates that the sales per
month for each salesman in each district would be as follows

Salesmen Districts
A B C D E
1 32 38 40 28 40
2 40 24 28 21 36
3 41 27 33 30 37
4 22 38 41 36 36
5 29 33 40 35 39

Find the optimal allocation that will result in maximum sales.

Example 4: Managementdepartment head has five instructors to be assigned to four different

courses. All of the instructors have taught the courses in the past and have been evaluated
by the students. The rating for each instructor for each course is given in the following table
(a perfect score is 100).
Course
Instructor A B C D
1 80 75 90 85
2 95 90 90 97
3 85 95 88 91
4 93 91 80 84
5 91 92 93 88

The department head wants to know the optimal assignment of instructors to courses that
will maximize the overall average evaluation. The instructor who is not assigned to teach a
course will be assigned to grade exams. Solve this problem using the assignment method.

20 Samara University Department of Management Prepared by: Abaynesh.B