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Solving Transportation Problem using Vogel's Approximation Method,Stepping

Stone Method & Modiﬁed Distribution Method
Method · July 2019

DOI: 10.13140/RG.2.2.20539.98082
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Chapter:1
Basic Concepts of Transportation Problem
Introduction:[1]
The “transportation problem” refers to a special class of linear programming problems dealing
with the distribution of single commodity from various sources of supply to various points of
demand in such a manner that the total transportation costs are minimized. It was first studied
by F. L. Hitchcock in 1941, then separately by T. C. Koopmans in 1947, and finally placed in the
framework of linear programming and solved by simplex method by G. B. Dantzig in 1951. Since
then, improved methods of solutions have been developed and the range of application has
been steadily widened. It is now accepted as one of the important analytical and planning tool
in business and industry.
Refer to the following table :
M1 M2 Supply
W1 5 8 15
W2 4 10 5
Demand 12 8 30
The transportation problem is a special kind of the network optimization problems. It has the
special data structure in solution characterized as a transportation graph. Transportation
models play an important role in logistics and supply chains. The problem basically deals with
the determination of a cost plan for transporting a single commodity from a number of sources
to a number of destinations. The purpose is to minimize the cost of shipping goods from one
location to another so that the needs of each arrival area are met and every shipping location
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operates within its capacity. Network model of the transportation problem is shown in Figure 1.
It aims to find the best way to fulfill the demand of n demand points using the capacities of m
supply points.
Formulation of a general transportation problem : [2]
Let us assume in general that there are m - sources S1, S2, ..., Sm with capacities a1, a2, ... , am and
n - destinations (sinks) with requirements b1, b2, ..., bn respectively. The transportation cost
th th
from i - source to the j - sink is cij and the amount shipped is xij. If the total capacity of all
sources is equal to the total requirement of all destinations, what must be the values of xij with i
= 1, 2, ..., m and j = 1, 2, ..., n for the total transportation cost to be minimum ?
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Availability
(Sink)Destination
D1 D2 Dn a
i
a
1
S1 c c c
11 12 1n
Source a
2
S2 c c c
21 22 2n
:
: : :
am
Sm c c c
m1 m2 mn
Demand(bj) b1 b2 bn Σ ai= Σ bj
Upon examining the above statement of the problem, we realize that it has an objective
function which is ,
f(x) = c x + ... + c x + ... +c x + ... + c x + ... + c x
11 11 21 21 2n 2n m1 m1 mn mn
= Σ Cij Xij
Secondly, in view of the condition that the total capacity is equal to the total requirement,
i.e. Σ ai= Σ bj,
the individual capacity of each source must be fully utilized and the individual requirement of
each destination must likewise be fully satisfied. Hence we have m capacity constraints and n
requirements constraints. The capacity constraints impose on the solution the condition that
the total shipments of all destinations from any source must be equal to the capacity of that
source. Thus,
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x + x + ... + x = a , i = 1, 2, ..., m.
i1 i2 in i
On the other hand, the requirement constraints require that the demand of every destination
be fully satisfied by the total shipments from all sources. Thus,
x + x + ... + x = b , j = 1, 2, ..., n.
1j 2j mj j
Thirdly, there are the usual non-negativity constraints, i.e. x ≥ 0 for all i and j. They are based
ij
on the practical aspect that either we shall send some positive quantity or no quantity from any
source to any sink.
To sum up, we have the following mathematical formulation of the transportation problem :
,
: = . (1)
,
Subject to
And xij ≥ 0 for all i and j.
The above formulation looks like an LPP. This special LPP will be called a Transportation
Problem (TP).
Matrix form of a TP :[3]
We can write from above in matrix form as ,

T mn
Minimize z = c x , c, x ∈ R
T m+n
subject to Ax = b, x ≥ 0, b ∈ R
where x = [x ... x x ... x x ... x ]
11 1n 21 2n m1 mn
b = [a a ... a b b ... b ]
1 2 m 1 2 n
and A is a (m + n) × (mn) real matrix containing the coefficients of constraints and c is the cost
vector. The elements of A are either 0 or 1. Thus, a LPP can be reduced to a TP if
1. the aij `s are restricted to the values 0 and 1.
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2. The units among the constraints are homogeneous.
Loops in a Transportation Problem:[4]
In a transportation table, an ordered set of four or more cells are said to form a loop if and any
if;
(i) Two consecutive cells in the ordered set lie either in the same row or in the same
column.
(ii) No three or more adjacent cells in the ordered set do not lie in the same row or in
the same column and the first and the last cells of the sets also either in the same
row in the same column.
The ordered sets of cells in the circuits are:
In table-1 : L1 = {(1,1), (1,2), (3,2), (3,4), (4,4), (4,1)}
In table-2 : L2 = {(1,1), (1,2), (4,2), (4,3), (4,4), (2,4), (2,1)}
Table-1 Table-2
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Chapter:2
Some Important Theorems
Theorem-1:[5] Every loop has an even number of cells.
Proof: For any loop we can always select arbitrarily a starting point and a direction. Consider a
loop formed by n cells, and number of consecutive cells of the loop from 1 to n. let cells 1 and 2
are in the same column. Thus the step from cell 1 to cell 2 involves a row change. Clearly, step
from cell 2 to cell 3 must involve a column change from cell 3 to cell 4 a row change and so on.
In general the step to cell k involves a row change. If and only if k is even. Now, since the step
from cell 1 to cell 2 involved a row change, step from cell n to cell 1 must be a column change
and the step from cell (n-1) to cell n involves a row change. Hence n is even. Thus every n loop
has an even number of cell.
Theorem-2:[6] A transportation problem of m origins and n destinations
: = .
,
Subject to
Where i=1,2,...,m and j=1,2,...,n; and xij≥ 0 for all i and j exists a feasible solution which is given
by
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xij= , i=1,2,...,m and j=1,2,...,n
Proof: Since all ai and bj are non-negative quantities therefore xij≥ 0 for all i and j.
xij=
or,
= = . =
and
= = . =
where i=1,2,...,m and j=1,2,...,n, and which satisfy the given conditions.
Hence, in each transportation problem exists a feasible solution and which is
xij= , for i=1,2,...,m and j=1,2,...,n.
Theorem-3:[7] A linear programming formulation of a transportation problem of m origins and

n destinations
,
: = .
,
Subject to
=
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Where i=1,2,...,m and j=1,2,...,n; and xij≥ 0 for all i and j exists a feasible solution if and only if
Proof: Consider a transportation problem of m origins and n destinations
: = .
,
Subject to
Where i=1,2,...,m and j=1,2,...,n; and xij≥ 0 for all i and j
The condition is necessary: Let there exist a feasible solution
Then we have
. = =
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The condition is sufficient: Let us assume that
= = ( )
We assert that there exist a feasible solution given by xij= for all i and j.
Clearly xij≥0 since ai > 0 bi > 0 for all i and j.
Also,
.
= = = = =
.
= = = = =
Thus xij satisfies all the constraints of the transportation problem and hence is a feasible
solution.
Theorem-4:[8] A set X of column vectors of the coefficients matrix of a transportation problem

will be linearly dependent if their corresponding cells in the transportation table contain a loop.
Proof: Consider the m-origins and n-destinations transportation problem in matrix form
Minimize z=c x
Ax=b
X ≥0
1
2
⎛ . ⎞
Where A is the coefficient matrix, C is the cost vector and b = ⎜ ⎟ = (m+n) component
⎜ ⎟
⎜ 1⎟
.
⎝ ⎠
column vector and X is the column vector of mn variables.
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Let X be a set of column vectors of the coefficient matrix A. The loop connecting the
corresponding cells of the vectors may be simple or general. The ordered set of even number of
cells associated with vectors of X containing a simple loop are given by:
L= {(i,j), (i,k), (l,k), (l,m), ... (p,o), (p,j)}
If aij denotes the column vector of coefficient matrix A associated with the cell (i,j) then
aij= ei + em+j
Similarly, aik= ei + em+k
alk= el + em+k
apo= ep + em+o
apj= ep+ em+j
Therefore, aij - aik + alk + ... ... ... + apo - apj
=( ei + em+j) – (ei + em+k) + (el + em+k) + ... ... ... + (ep + em+o) –( ep+ em+j)
=0
Which indicates that the column vectors aij , aik ... ... , apj of the set x are linearly dependent . So
the set X is linearly dependent.
Hence the theorem is proved.
Theorem-5:[9] A set C of the cells of a transportation table contains a loop, if their

corresponding column vectors of the coefficient matrix are linearly dependent.
Proof: Let us consider a transportation problem in matrix form
Minimize z=c x
Ax=b
X ≥0
Let aij is a column vector of coefficient matrix A, associated with the cells (i,j) then aij = ei + em+j
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Also let the set X of column vectors aij of coefficient matrix A associated with the corresponding
cell (i,j) are linearly dependent.
Therefore , ∑ = 0................................................................. (1)
With at least one λij is not zero.
To simplify remove all vectors for λij=0 in (1) there are at least two vectors in (1) with
non-zero coefficients. Let the vectors are aij and apq.
Therefore, from (1) we get,
λij aij + λpq apq =0
Or, λij ( ei + em+j) + λpq ( ep+ em+q) =0 .............(2)
But (1) will be satisfied if and inly if λij = λpq =0.
Therefore the vector aij and apq are not linearly dependent proceeding similarly we can
establish that there are non-zero quantities in the left hand side of (1). Moreover if there are
just four vectors with non-zero coefficients, the condition (1) will be satisfied iff the vectors are
in the order aij , aik , apk , apj with respect to first and second subscript. The corresponding
ordered set of cells are (i,j), (i,k), (p,k), and (p,j) which evidently form a simple loop. Similarly
we can establish that there exist always an even number of vectors in the set X the coefficients
of which are not zero in (1), the corresponding cells of which are said to form a loop.
Hence the theorem is proved.

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Chapter:3
General Linear Programming & Transportation Model
Comparison Between Transportation Model And General Linear Programming

Model:[10]
Similarities:
a. Both have objective function.

b. Both have linear objective function.
c. Both have non - negativity constraints.
d. Both can be solved by simplex method. In transportation model it is laborious
e. A general linear programming problem can be reduced to a transportation problem if
(a) the aij's (coefficients of the structural variables in the constraints) are restricted to
the values 0 and/or 1 and (b) There exists homogeneity of units among the constraints.
.
Differences:
a. Transportation model is basically a minimization model; where as general linear

programming model may be of maximization type or minimization type.
b. The resources, for which, the structural constraints are built up is homogeneous in
transportation model; where as in general linear programming model they are different.
That is one of the constraint may relate to machine hours and next one may relate to
man-hours etc. In transportation problem, all the constraints are related to one
particular resource or commodity, which is manufactured by the factories and
demanded by the market points
c. The transportation problem is solved by transportation algorithm; where, as the general
linear programming problem is solved by simplex method.
d. The values of structural coefficients (i.e. xij) are not restricted to any value in general
linear programming model, where as it is restricted to values either 0 or 1 in
transportation problem.
Example:
Let one of the constraints in general linear programming model is: 2x –3y +10z ≤ 20. Here
the coefficients of structural variables x, y and z may negative numbers or positive numbers
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of zeros. Where as in transportation model, say for example x11 + x1+ x13 + x14 = bi = 20.
Suppose the value of variables x11, and x14 are 10 each, then 10 + 0. X12 + 0. X13 + 10 = 20.
Hence the coefficients of x11 and x14 are 1 and that of x12 and x13 are zero.
Types of Transportation Problem:[11]
The Transportation Problem can be classified into balanced TP or unbalanced TP.

A. Balanced transportation problem: If the sum of the supplies of all the sources is equal to
the sum of the demands of all the destinations , then the problem is termed as a
balanced TP.
B. Unbalanced transportation problem: If the sum of the supplies of all the sources is not
equal to the sum of the demands of all the destinations, then the problem is termed as
a unbalanced TP.
Steps of Solving TP
Finding initial basic feasible solutions methods:[12]
There are mainly three types of method for finding initial basis feasible solutions. The methods
are:
 North-West Corner Rule(NWCR)

 Least Cost Method or Matrix Minima Method(LCM)
 Vogel’s Approximation Method(VAM)
Methods of Optimality Test:[13]
There are two methods for optimality test. The methods are:
 Modified Distribution Method or Modi Method

 Stepping Stone Method or SSM.
Now, we will discuss about VAM for finding initial basic feasible solution and Modi and SSM for
optimality test.
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Vogel's Approximation Method of Allocation:[14]
This method also takes costs into account in allocation. Five steps are involved in applying this
heuristic:
Step 1: Determine the difference between the lowest two cells in all rows and columns,
including dummies.
Step 2: Identify the row or column with the largest difference. Ties may be broken arbitrarily.
Step 3: Allocate as much as possible to the lowest-cost cell in the row or column with the
highest difference. If two or more differences are equal, allocate as much as possible to the
lowest-cost cell in these rows or columns.
Step 4: Stop the process if all row and column requirements are met. If not, go to the next
step.
Step 5: Recalculate the differences between the two lowest cells remaining in all rows and
columns. Any row and column with zero supply or demand should not be used in calculating
further differences. Then go to Step 2.
The Vogel's approximation method (VAM) usually produces an optimal or near- optimal starting
solution. One study found that VAM yields an optimum solution in 80 percent of the sample
problems tested.
Steps in Modified Distribution Method (MODI):[15]
Step-1: Determine an initial basic feasible solution using any one of the three methods given
below:
 North West Corner Rule

 Matrix Minimum Method
 Vogel Approximation Method
Step-2: Determine the values of dual variables, ui and vj, using ui + vj = cij
Step-3: Compute the opportunity cost using cij – ( ui + vj ).

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Step-4: Check the sign of each opportunity cost. If the opportunity costs of all the unoccupied
cells are either positive or zero, the given solution is the optimal solution. On the other hand, if
one or more unoccupied cell has negative opportunity cost, the given solution is not an optimal
solution and further savings in transportation cost are possible.
Step-5: Select the unoccupied cell with the smallest negative opportunity cost as the cell to be
included in the next solution.
Step-6: Draw a closed path or loop for the unoccupied cell selected in the previous step.
Please note that the right angle turn in this path is permitted only at occupied cells and at the
original unoccupied cell.
Step-7: Assign alternate plus and minus signs at the unoccupied cells on the corner points of
the closed path with a plus sign at the cell being evaluated.
Step-8: Determine the maximum number of units that should be shipped to this unoccupied
cell. The smallest value with a negative position on the closed path indicates the number of
units that can be shipped to the entering cell. Now, add this quantity to all the cells on the
corner points of the closed path marked with plus signs, and subtract it from those cells marked
with minus signs. In this way, an unoccupied cell becomes an occupied cell.
Step-9: Repeat the whole procedure until an optimal solution is obtained.
Steps In Stepping Stone Method (SSM):[16]
Step-1: Determine an initial basic feasible solution by any suitable method.But VAM is very
useful.
Step-2: Make sure that the number of occupied cells is exactly equal to (m+n-1) where m is
number of rows and n is the number of columns of the cost matrix.
Step-3: Evaluate the cost effectiveness of shipping via transportation routes not currently in
the solution. This can be testify considering each unoccupied cells in the current solution by
following steps:
(i) Select an unoccupied cell, where a new shipment can be made.

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(ii) Begging at this cell trace a closed loop using the most direct route through at least
three occupied cells used in the solution and the back to the original and moving with only
horizontal and vertical lines. Further, since only the cell at the turning points are considered to
be on the closed path any unoccupied boxes may be skipped. The cells at the turning points are
called stepping stones on the path.
(iii) Assign plus and minus signs alternately on each corner cell of the closed path starting
with a plus sign at the unoccupied cell.
(iv) Compute ‘net change in the cost’ along the closed path by adding together the unit
cost figures found in each cell containing the minus sign.
(v) Repeat sub-step (i)-(iv) unit ‘net change’ in the cost to be calculated for all
unoccupied cells in the transportation table.
Step-4: Check the sign of each of the net changes computed. If the net changes are greater
than or equal to zero, then an optimum solution has been obtained. If mot, it is possible to
improve the current solution.
Step-5: Select the unoccupied cell having the highest negative net cost change and determine
the maximum number of units that can be assigned to a cell marked with a minus sign on the
closed path corresponding to the cell. Add this number to the unoccupied cell and to all other
cells on the path marked with a plus sign, subtract this number from cells on the path with a
minus sign.
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Chapter:4
SOME EXAMPLES USING VAM & MODI METHOD

Problem:[17] Use Vogel’s method to find an initial basic feasible solutions and then find the
minimum transportation cost for the following transportation problem by Modi method.
D1 D2 D3 D4 Availability
O1 1 2 1 4 30
O2 3 3 2 1 50
O3 4 2 5 9 20
Requirement 4 40 30 10 100
Solution:
Step I: Find the initial basic feasible solution
The initial basic feasible solution obtained by applying the Vogel’s approximation method is
shown in the Table:1
Table:1
D1 D2 D3 D4 Availability Row
Differences
01 1 2 1 4 30/10/0 [0] [0] [1]
(20) (10)
O2 3 3 2 1 50/40/20/0 [1] [1] [1]
(10)
(20) (20)
03 4 2 5 9 20/0 [2] [2]
(20)
Requirement 20/0 40/20/0 30/20/0 10/0 100/100
Column [2] [0] [1] [3]
Differences [2] [0] [1]
[1] [1]
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Step II : Perform Optimality Test
Required number of allocations = m+n-1= 3+4-1 =6=Actual number of allocation. Therefore,

optimality test can be performed.
Now, we use Modi for optimality test:-
Table:2
vj v1 v2 v3 v4 Availability
uj
u1 1 . 1 . 30
u2 . 3 2 1 50
u3 . 2 . . 20
Now we find the value uj and vj by the relation uj+vj=Cj
For the basic sell (1,1) : u1+ v1=1
Then, let v1=0,then we get
V2 =1; v3=0; v4=-1; u1=1; u2=2; u3=1.Now displaying these values in the table and calculate the
cell evaluation.
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Table:3
vj 0 1 0 -1 Availability
uj
1 . 2 . 0 30
2 2 . . . 50
1 1 . 1 0 20
Now, subtracting the cell values of the above matrix from the original cost matrix;
Table:4
vj 0 1 0 -1 Availability
uj
1 . 0 . 4 30
2 1 . . . 50
1 3 . 4 9 20
Step III: Since, all cell evaluations are positive, initial basic feasible solution is optimal.
The minimum transportation cost is given by=1x20+1x10+3x20+2x20+1x10+2x20=180.
Problem:[18] Solve the transportation problem by Vogel’s method.

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A B C D Availability
O1 21 16 25 13 11
O2 17 18 14 23 13
O3 32 27 18 41 19
Solution:
shown in the Table:1.
Table:1
A B C D Availability Row
Differences
O1 21 16 25 13 11/0 [3]
(11)
O2 17 18 14 23 13/9/3/0 [3] [3] [3] [4]
(6) (3) (4)

O3 32 27 18 41 19/7/0 [9] [9] [9] [9]
(7) (12)
Requirement 6/0 10/7/0 12/0 15/4/0 43/43
Column [4] [2] [4] [10]
Differences [15] [9] [4] [18]
[15] [9] [4]
[9] [4]
Required number of allocations = m+n-1=3+4-1=6.

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Actual number of allocation=6, and 6 allocations are in independent positions. Optimality test
can therefore, be performed.
Table:2
vj v1 v2 v3 v4 Availability
uj
u1 . . . 13 11
u2 17 18 . 23 13
u3 . 27 18 . 19
6 10 12 15 43
Then ,let v1=0,then we get
v2 =1; v3=-8; v4=6; u1=7; u2=17; u3=26.Now displaying these values in the table and calculate
the cell evaluation.
Table:3
vj 0 1 -8 0 Availability
uj
7 7 8 -1 . 11
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17 . . 9 . 13
26 26 . . 32 19
Now, subtracting the cell values of the above matrix from the original cost matrix
Table:4
vj 0 1 -8 0 Availability
uj
7 14 8 26 . 11
17 . . 5 . 13
26 6 . . 9 19
Step III:
Since, all cell evaluations are positive, initial basic feasible solution is optimal.
Problem:[19] Consider the following unbalanced transportation problem:
1 2 3 Supply
1 5 1 7 10
2 6 4 6 80
3 3 2 5 15
Demand 75 20 50
Since there is not enough supply, some of the demands at these destinations may not be
satisfied. Suppose there-are penalty costs for every unsatisfied demand unit which are given
by 5,3 and 2 for destinations 1,2, and 3 respectively. Find the optimal solution by Modi
method.
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Solution:
Step I: Prepare a Transportation Table
Since there is not enough supply ,we introduce a dummy source whose ‘transportation costs’
are 5,3 and 2 respectively and the supply is 145-105=40 units. The modified (balanced
transportation problem is represented by Table:1
Table:1
1 2 3 Supply
1 5 1 7 10
2 6 4 6 80
3 3 2 5 15
D 5 3 2 40
Demand 75 20 50 145
Step II: Find the initial basic feasible solution
shown in the Table:2
Table:2
1 2 3 Supply Row
Differences
1 5 1 7 10/0 [4]
(10)
2 6 4 6 80/70/60/0 [2] [2] [2]
(60) (10) (10)

3 3 2 5 15/0 [1] [1] [1]
(15)
D 5 3 2 40/0 [1] [1]
(40)
Demand 75/60/0 20/10/0 50/10/0 145/145
Column [2] [1] [3]
Differences [2] [1] [3]
[3] [1] [1]
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Step III : Perform Optimality Test
Now, we use Modi for optimality test:
Table:3
vj V1 V2 V3 Supply
uj
u1 . 1 . 10
u2 6 4 6 80
u3 3 . . 15
u4 . . 2 40
Demand 75 20 50 145
Then , let v1=0,then we get v2 =-2; v3=0; u1=3; u2=6; u3=3 ; u4=2 .Now displaying these values
in the table and calculate the cell evaluation.
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Table:4
vj 0 -2 0 Supply
uj
3 3 . 3 10
6 . . . 80
3 . 1 3 15
2 2 0 . 40
Demand 75 20 50 145
Now, subtracting the cell values of the above matrix from the original cost matrix:
Table:5
vj 0 -2 0 Supply
uj
3 2 . 4 10
6 . . . 80
3 . 1 2 15
2 3 3 . 40
Demand 75 20 50 145
Step IV:

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Problem:[20] Calculate the initial basic feasible solution for the Transportation Problem by
Vogel’s Approximation Method and check the optimality of the solution obtained by VAM for
the TP . If the solution is not optimal, modify it.
M1 M2 M3 Supply
W1 26 23 10 61
W2 14 13 21 49
W3 16 17 29 90
Demand 52 68 80 200
Solution:
shown in the Table:1.
Table:1
M1 M2 M3 Supply Row
Differences
W1 26 23 10 61/0 [13]
(61)
W2 14 13 21 49/30/0 [1] [1] [1]
(30) (19)
W3 16 17 29 90/38/0 [1] [1] [1] [1]
(52) (38)
Demand 52/0 68/38/0 80/19/0 200/200
Column [2] [4] [11]
Difference [2] [4] [8]
[2] [4]

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Table:2
vj V1 V2 V3 Supply
uj
u1 . . 10 61
u2 . 13 21 49
u3 16 17 . 90
Demand 52 68 80 200
Then , let v1=0,then we get v2 =1; v3=9; u1=1; u2=12; u3=16 .Now displaying these values in
the table and calculate the cell evaluation.
Table:3
vj 0 1 9 Supply
uj
1 1 2 . 61
12 12 . . 49
16 . . 25 90
Demand 52 68 80 200
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Now, subtracting the cell values of the above matrix from the original cost matrix;
Table:4
vj 0 1 9 Supply
uj
1 25 21 . 61
12 2 . . 49
16 . . 4 90
Demand 52 68 80 200
Step III:
The minimum transportation cost is given by=10x61+13x30+21x19+16x52+17x38=2877.
SOME EXAMPLES USING VAM & SSM
Problem:[21] Solve the given TP by SSM.
D1 D2 D3 D4 Supply
O1 5 4 6 14 15
O2 2 9 8 6 4
O3 6 11 7 13 8
Demands 9 7 5 6 27
Solution: Initial feasible solution of the given TP obtained by Vogel’s approximation as follows:
Table:1
D1 D2 D3 D4
O1 8 7 0 0 15 (1) (1) (1)
1
5 4 6 4
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O2 0 0 0 4 4 (4)
2 9 8 6
O3 1 0 5 2 8 (1) (1) (1)
6 11 7 13
9 7 5 6
(3) (5) (1) (7)
(3) (7) (1) (1)
(1) (1) (1)
Total cost = 5.8+4.7+6.4+6.1+7.5+13.2
=40+28+24+6+35+26
=159
Here number of occupied cells 6=(n+m-1) as n=3, m=4
Therefore let us test the optimality for the given obtained solution by following cost analysis
table:
Unoccupied cells Closed path Net cost change Remarks

(O1,D3) (O1,D3)→ (O1,D1)→ (6-5+6-7)=0 Cost remain
(O3,D1)→ (O3,D3)→ unchanged
(O1,D3)
(O1,D4) (O1,D4)→ (O1,D1)→ (14-5+6-13)=+1 Cost increases
(O3,D1)→ (O3,D4)→
(O1,D4)
(O2,D1) (O2,D1)→ (O2,D4)→ (2-6+13-6)=+3
(O3,D4)→ (O3,D1)→ "
(O2,D1)
(O2,D2) (O2,D2)→ (O2,D4)→ (9-6+13-6+5-4)=+11
(O3,D4)→ (O1,O3)→ "
(O1,O1)→ (O1,O2)→
(O2,D2)
(O2,D3) (O2,D3)→ (O2,D4)→ (8-6+13-7)=+8
(O3,D4)→ (O3,D3)→ "
(O2,D3)
(O3,D2) (O3,D2)→ (O3,D1)→ (11-6+5-4)=+6
(O1,D1)→ (O1,D2)→ "
P a g e | 30
(O3,D2)
From above remarks column we see that for any changes for occupied (unoccupied) cells
cost not decreases. i ,e the solution obtained is optimum. As in the net cost change column
there is one ‘O’, so the problem has alternative optimum solution.
Therefore optimum solution for the problem is:
(O1, D1) =8,(O1, D2) =7,(O2, D4) =4
(O3, D1) =2, (O3, D3) =5,(O3, D4) =2
Therefore, The Total cost=159
Problem:[22] Four factories , A, B, C and D produce sugar and the capacity of each factory is
given below: Factory A produces 10 tons of sugar and B produces 8 tons of sugar, C produces 5
tons of sugar and that of D is 6 tons of sugar. The sugar has demand in three markets X, Y and Z.
The demand of market X is 7 tons, that of market Y is 12 tons and the demand of market Z is 4
tons. The following matrix gives the transportation cost of 1 ton of sugar from each factory to
the destinations. Find the Optimal Solution for least cost transportation cost.
Factories Cost in Rs. per ton (× 100) Markets. Availability in
X Y Z tons.
A 4 3 2 10
B 5 6 1 8
C 6 4 3 5
D 3 5 4 6
Requirement in 7 12 4
tons.
Solution:
Step I: Find basic feasible solution by VAM method:
X Y Z Dummy Availability
A 4 3 2 0 10
(3) (7)
P a g e | 31
B 5 6 1 0 8
(3) (5)
C 6 4 3 0 5
(5)
D 3 5 4 0 6
(5)
Now, we use SSM for optimality test:-
Table showing the cost change and opportunity costs of empty cells:
Table:2
Sl. Empty Evaluation Loop Formation Cost Change in Rs. Cost

No. Cell Change
1 AZ +AZ – AX + BX – BZ +2 – 4 + 5 – 1 = + 2 –2
2 ADummy + A DUMMY – AX + BX – B DUMMY +0 – 4 + 3 – 0 = – 1 +1
3 BY + BY – AY + AX – BX +6 – 3 + 4 – 5 = +2 –2
4 BDUMMY + B DUMMY – BX + DX – D DUMMY +0 – 5 +3 – 0 = –2 +2
5 CX +CX – CY + AX – AY 6 – 4 + 3 – 4 = +1 –1
6 CZ +CZ – BZ + BX –AX + AY – CY +2 –1 +5 – 4 +5 – 4 =+1 –1
7 CDUMMY + C DUMMY – D DUMMY + DX – + 0 – 0 +3 – 4 +3 – 4 = –2 +2

AX + AY – CY
P a g e | 32
8 DY +DY – DX + AX – AY +5 – 3 +4 – 3 = +3 –3
9 DZ +DZ – DX +BX – BZ +4 – 3 + 5 – 1 = +5 –5
In the table 1 cells A DUMMY, B DUMMY, C DUMMY are the cells which are having positive
opportunity cost . Between these two cells B DUMMY and C DUMMY are the cells, which are
having higher opportunity cost i.e Rs. 2/ - each. Let us select any one of them to include in the
improvement of the present programme. Let us select C DUMMY.
Table:3
S. Empty Evaluation Loop Formation Cost Change in Rs. Cost
No. Cell Change
1 AX +AX –DX + D DUMMY – C DUMMY + CY – AY +4–3+0–0+4–3=+ –2

2
2 AX AZ – AY + CY – C DUMMY D+DUMMY – DX+ + 2 – 3 + 4 – 0 + 0 – 3 +3 – –4

BX – BZ 0=+4
3 ADUMMY + A DUMMY – AY + DX –D DUMMY +0–4+3–0=–1 +1
4 BY +BY – BX + DX – D DUMMY +C DUMMY – CY + 6 –5 + 3 –0 + 0 – 4 = 0 0
5 BDUMMY + B DUMMY – BX + DX – D DUMMY + 0 – 5 + 3 – 0 = –2 +2
6 CX + CX – DX + D DUMMY – C DUMMY + 6 –3 + 0 – 0 = +3 –3
7 CZ + CZ – C DUMMY + D DUMMY– DX + BX – BZ +2–0+0–3+5–1=+ –3

3
8 DY DY – CY + C DUMMY – D DUMMY +5–4+0–0=1 –1
9 DZ + DZ – DX + BX – BZ + 4 – 3 +5 – 1 = + 5 –5
Cells A DUMMY and B DUMMY are having positive opportunity costs. The cell B DUMMY is
having higher opportunity cost. Hence let us include this cell in the next programme to improve
the solution
Table:4
P a g e | 33
S. Empty Evaluation Loop Formation Cost Change in Rs. Cost

No. Cell Change
1 AX +AX – AY + CY – C DUMMY +B DUMMY – BX +4 – 3 + 4 – 0 + 0 – 5 = 0 0
2 AZ + AZ – BZ + B DUMMY – C DUMMY+ CX – AX +2 –1 + 0 – 0 + 4 – 3 =+ 2 –2
3 ADUMMY + A DUMMY – C DUMMY + CY – AY +0 – 0 + 4 – 3 = +1 –1
4 BY + BY – B DUMMY + C DUMMY – CY +6 – 0 + 0 – 4 = + 2 –2
5 CX + CX – BX + B DUMMY – C DUMMY +6 – 5 + 0 – 0 = +1 –1
6 CZ + CZ – BZ + B DUMMY – C DUMMY +2 – 1 + 0 – 0 = +1 –1
7 DY +DY – CY + C DUMMY – B DUMMY+ BX – DX +5 – 4 + 0 – 0 + 5 – 3 = +3 –3
8 DZ + DZ – BZ + BX – DX +4 – 1 + 5 – 3 = +5 –5
9 DDUMMY + D DUMMY – DX + BX – B DUMMY + 0 – 3 + 5 – 0 = +2 –2
All the empty cells have negative opportunity cost hence the solution is optimal. The allocations are
S.No. Loaded cell Load Cost in Rs.
1 AY 10 10 × 3 = 30
2 BX 01 01 × 5 = 05
3 BZ 05 05 × 1 = 05
4 B DUMMY 02 02 × 0 = 00
5 CY 02 02 × 4 = 08
6 C DUMMY 03 03 × 0 = 00
7 DX 06 06 × 3 = 18
Total in Rs. 66
Therefore, Total minimum transportation cost is Rs. 66/-

P a g e | 34
Chapter:5
Conclusion
In the above discussion, the whole study is based on “Transportation Problem” which is the most
important and successful applications in the optimization, from OPEREATION RESEARCH.
The Transportation Problem is a special type of LPP where the objective is to minimize the cost
of distributing a product from a number of sources or origins to a number of destinations.
The investigations give us the basic concepts of Transportation Problems, differences and
similarities between general linear programming and transportation problem. We also study steps
of solving initial basic feasible solution of a Transportation Problem by Vogel’s Approximation
method and optimality test by Modified Distribution Method or Modi method and Stepping
Stone Method or SSM.
We can say that Vogel’s approximation method is the best method to find basic feasible solution
of Transportation by theory & real problems. We study & found that VAM yields an optimum
solution in 80 percent of the sample problems tested. For more understanding of this topic; we
use some real life Transportation Problems too.
P a g e | 35
References
[1]
Dr. Ravi Mahendra Gor. “Industrial Statistics & Operational Management” , ICFAI
Business School , Bodakdev Ahmedabad-380054, India.
P. Rama Murthy. “Operations Research” , New Age International (P) Limited, New
Delhi, 2007.
[2]
[3]
[4]
Dr. Ganesh Chandra Roy & Elius Hossain. “Operation Research”, Titas Publication ,
Dhaka ,Bangladesh, 2015.
[5]
[6]
[7]
Dr. Ganesh Chandra Roy & Elius Hossain.“Operation Research”, Titas Publication ,
[8]
[9]
[10]
Hamdy A. Taha. “Operations Research:An Introduction” , Pearson Education Inc , New
Jersey, 2007.
[11]
Hamdy A. Taha. “Operations Research:An Introduction” , Pearson Education Inc , New
Jersey, 2007.
[12]
George B. Dantzig Mukund N Thapa. “Linear Programming,1:An Introduction” ,
Springer-Verlag New York, Inc. , 175 Fifth Evenue, New York, NY-10010, USA. 1997.
[13]
George B. Dantzig Mukund N Thapa. “Linear Programming,1:An Introduction” ,
Springer-Verlag New York, Inc. , 175 Fifth Evenue, New York, NY-10010, USA. 1997.
[14]
[15]
P. Rama Murthy. “Operations Research”, New Age International (P) Limited,New
Delhi, 2007.
[16]
[17]
Prem Kumar Gupta, Dr. D. S. Hira. “Problems In Operations Research(PRINCIPLES
AND SOLUTIONS)” S Chand & Co Ltd, New Delhi, India, 2010.
P a g e | 36
[18]
Prem Kumar Gupta, Dr. D. S. Hira, “Problems In Operations Research(PRINCIPLES
AND SOLUTIONS)” S Chand & Co Ltd, New Delhi, India, 2010.
[19]
AND SOLUTIONS)” S Chand & Co Ltd, New Delhi, India, 2010
[20]
AND SOLUTIONS)” S Chand & Co Ltd, New Delhi, India, 2010
[21]
Dr. Ganesh Chandra Roy & Elius Hossain.“Operation Research, Titas Publication,
[22]
P. Rama Murthy. “Operations Research” , New Age International (P) Limited, New
Delhi, 2007.
THE END
P a g e | 37
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Solving Transportation Problem using Vogel's Approximation Method,Stepping

Method · July 2019

Transportation Problem of OR:Using VAM,MoDi & SSM View project

The user has requested enhancement of the downloaded file.

Basic Concepts of Transportation Problem

Formulation of a general transportation problem : [2]

And xij ≥ 0 for all i and j.

Matrix form of a TP :[3]

We can write from above in matrix form as ,

2. The units among the constraints are homogeneous.

Loops in a Transportation Problem:[4]

The ordered sets of cells in the circuits are:

In table-1 : L1 = {(1,1), (1,2), (3,2), (3,4), (4,4), (4,1)}

In table-2 : L2 = {(1,1), (1,2), (4,2), (4,3), (4,4), (2,4), (2,1)}

Some Important Theorems

Theorem-1:[5] Every loop has an even number of cells.

Theorem-2:[6] A transportation problem of m origins and n destinations

xij= , i=1,2,...,m and j=1,2,...,n

Hence, in each transportation problem exists a feasible solution and which is

xij= , for i=1,2,...,m and j=1,2,...,n.

Theorem-3:[7] A linear programming formulation of a transportation problem of m origins and

Proof: Consider a transportation problem of m origins and n destinations

Where i=1,2,...,m and j=1,2,...,n; and xij≥ 0 for all i and j

The condition is necessary: Let there exist a feasible solution

The condition is sufficient: Let us assume that

Clearly xij≥0 since ai > 0 bi > 0 for all i and j.

Theorem-4:[8] A set X of column vectors of the coefficients matrix of a transportation problem

L= {(i,j), (i,k), (l,k), (l,m), ... (p,o), (p,j)}

Similarly, aik= ei + em+k

apj= ep+ em+j

Therefore, aij - aik + alk + ... ... ... + apo - apj

Hence the theorem is proved.

Theorem-5:[9] A set C of the cells of a transportation table contains a loop, if their

Proof: Let us consider a transportation problem in matrix form

Therefore , ∑ = 0................................................................. (1)

With at least one λij is not zero.

Therefore, from (1) we get,

λij aij + λpq apq =0

Or, λij ( ei + em+j) + λpq ( ep+ em+q) =0 .............(2)

But (1) will be satisfied if and inly if λij = λpq =0.

Hence the theorem is proved.

General Linear Programming & Transportation Model

Comparison Between Transportation Model And General Linear Programming

a. Both have objective function.

a. Transportation model is basically a minimization model; where as general linear

Types of Transportation Problem:[11]

The Transportation Problem can be classified into balanced TP or unbalanced TP.

Finding initial basic feasible solutions methods:[12]

 North-West Corner Rule(NWCR)

Methods of Optimality Test:[13]

 Modified Distribution Method or Modi Method

Vogel's Approximation Method of Allocation:[14]

Steps in Modified Distribution Method (MODI):[15]

 North West Corner Rule

Step-3: Compute the opportunity cost using cij – ( ui + vj ).

Step-9: Repeat the whole procedure until an optimal solution is obtained.

Steps In Stepping Stone Method (SSM):[16]

(i) Select an unoccupied cell, where a new shipment can be made.

SOME EXAMPLES USING VAM & MODI METHOD

Step I: Find the initial basic feasible solution

Step II : Perform Optimality Test

Required number of allocations = m+n-1= 3+4-1 =6=Actual number of allocation. Therefore,