Transportation Model

Dr Manoj Dash
 Transportation Problem
• The transportation problem in operational
research is concerned with finding the
minimum cost of transporting a single
commodity from a given number of sources
(e.g. factories) to a given number of
destinations (e.g. warehouses). These types of
problems can be solved by general network
methods, but here we use a specific
transportation algorithm
Transportation Model
 Data
The data of the model include
1. The level of supply at each source and the amount of
demand at each destination.
2. The unit transportation cost of the commodity from each
source to each destination.
• Since there is only one commodity, a destination can
receive its demand from more than one source. The
objective is to determine how much should be shipped
from each source to each destination so as to minimise the
total transportation cost.
 Types of Transportation Problem in
Operational Research
• Balanced Transportation Problem
• Unbalanced Transportation Problem
 Solution of the transportation
problem
Stage I: Finding an initial basic feasible solution.
Stage II: Checking for optimality
Existence of Feasible Solution: A necessary and sufficient condition for
the existence of a feasible solution to the general transportation
problem is that
Total supply = Total demand
Existence of Basic Feasible Solution: The number of basic variables of
the general transportation problem at any stage of feasible solution
must be (m + n – 1). Now degenerate basic feasible solution (a feasible
solution) involving exactly (m + n – 1) positive variables is
known as non-degenerate basic feasible solution otherwise it is said to
be degenerate basic feasible. These allocations should be independent
positions in case of non-degenerate basic feasible solutions.
 Methods to solve transportation
Model
Initial Basic Feasible Solutions Methods
(i) Column Minimum Method (CMM)
(ii) Row Minimum Method (RMM)
(iii)North West-Corner Method (NWCM)
(iv) Least Cost Method (LCM)
(v) Vogel’s Approximation Method (VAM)
Steps for North-West Corner Method

1. North-West Corner Method (NWCM)

Algorithm
Step 1. Select the North-West (upper left-hand) corner
cell of the transportation table and allocate units
according to the supply and demand.
Step 2. If the demand for the first cell is satisfied, then
move horizontally to the next cell in the second column.
Step 3. If the supply for the first row is exhausted, then
move down to the first cell in the second row.
Step 4. Continue the process until all supply and demand
values are exhausted.
 Steps for Least Cost Method

Step 1.
First examine the cost matrix and choose the cell with
minimum cost and then allocate there as much as possible. If
such a cell is not unique, select arbitrary any one of these
cells.
Step 2.
Cross out the satisfied row or a column. If either a column or a
row is satisfied simultaneously, only one may be crossed out.
Step 3.
Write the reduced transportation table and repeat the process
from step 1 to step 2, until one row or one column is left out.
 Steps for Vogel’s Approximation
Method
Step 1. Compute penalty of each row and a column.
The penalty will be equal to the difference between
the two smallest shipping costs in the row or
column.
Step 2. Identify the row or column with the largest
penalty and assign highest possible value to the
variable having smallest shipping cost in that row or
column.
Step 3. Cross out the satisfied row or column.
Step 4. Compute new penalties with same
procedure until one row or column is left out.
Modified Distribution (MODI) Method

This method always gives the total minimum transportation

cost to transport the goods from sources to the destinations.
1. If the problem is unbalanced, balance it. Setup the
transportation tableau
2. Find a basic feasible solution.
3. Set u1 = 0 and determine u s i ' and v s j ' such that i j ij u = v
c fo all basic variables.
4. If the reduced cost 0 ij i j c u v for all non-basic
variables (minimization problem), then the current BFS is
optimal. Stop! Else, enter variable with most negative reduced
cost and find leaving variable by looping.
5. Using the new BFS, repeat steps 3 and 4.
Optimum Transport cost
Thanks