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Lecture Notes (Transportation Part 1)

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Course/Year/Section:

The Special –Purpose Algorithms of Linear Programming

The Transportation Method

Transportation method: Minimization Process

Although a problem on transportation can be solved by graphical or by the simplex method, there is
a more efficient computational procedure of solving this type of linear programming problems. The
method is a special- purpose algorithm called transportation method. Transportation problems are
concerned with selecting routes from the source of supply to the distribution outlets. The objective is
either to minimize cost of transportation or maximize the contribution to profit. Repetitive procedures
are used in going from table to another, to come up with an optimum solution. In the minimization
process, the table is said to be optimum if the improvement computations are all positive; while in the
maximization process, the table is said to be optimum if the improvements are all negative. There are
two methods of solving a transportation problem: The Stepping Stone Method and The Modified
Distribution Method (MODI Method). The transportation may be balanced or unbalanced. A balance
transportation problem has equal number of units of demand and supply. An unbalance
transportation problem has unequal number demand and supply units. We are going to discuss first a
balanced transportation problem. Unbalanced transportation and generated or degenerated
transportation problem will be discussed later.

The Stepping Stone Method

The stepping stone method makes use of an unused or vacant cell as a point of destination to
evaluate if the solution can still improve. The general process is to look for available three occupied
cells, rectangular in position to the point of destination. The movement is vertical and horizontal only.

Sample problem

The FZJD Gravel Supply Company has received a contract to supply gravel to three new road
projects located in three different locations. Project A needs 174 truckloads, project B, 204 truckloads
and project C, 143.The company has three gravel warehouses located in three different places.
Warehouse 1 has 158 truckloads available, warehouse 2 has 184 and warehouse 3 has 179. The costs
of transportation from warehouse to the projects are from warehouse 1 to projects A, B, C; $4, $8,
and $8 per truck load, respectively. From warehouse 2: $16, $24, $16 and from warehouse 3: $8, $16,
and $24, respectively. The objective is to design a plan of distribution that will minimize the cost of
transportation.

Solution:

Table 1 Computation for Improvement

Cost of Transportation

Table 2 Computation for Improvement

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Cost of Transportation

Table 3 Computation for Improvement

Cost of Transportation

Table 4 Computation for Improvement

Cost of Transportation

Conclusion:
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Practice Problem 1
Directions: Using Stepping Stone Method (Minimization) Solve the Transportation Problem below. The
Table below represents the cost of each delivery from their factories to their outlets and the demands
(in terms of 5 boxes in one delivery), available supplies (in terms of 5 boxes in one delivery) of five
outlets and four factories respectively of Paolo’s Hotdogs& Sausage Maker Incorporated. Note: If
there is a case where the most negative vacant cell in computation for improvement are equivalent
then just choose any one of them.

TABLE 1
OUTLETS

FROM\TO A B C D E SUPPLY

FACTORY 1 12 10 9 8 11 255 boxes

FACTORY 2 8 10 13 12 11 400 boxes

FACTORY 3 8 7 6 5 12 250 boxes

FACTORY 4 15 16 15 12 10 245 boxes

DEMAND 340boxes 160 boxes 280 boxes 150 boxes 220 boxes

Cost of Transportation

Computation for Improvement

TABLE 2
OUTLETS

FROM\TO A B C D E SUPPLY

FACTORY 1 12 10 9 8 11 255 boxes

FACTORY 2 8 10 13 12 11 400 boxes

FACTORY 3 8 7 6 5 12 250 boxes

FACTORY 4 15 16 15 12 10 245 boxes

DEMAND 340boxes 160 boxes 280 boxes 150 boxes 220 boxes

Cost of Transportation

Computation for Improvement

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TABLE 3
OUTLETS

FROM\TO A B C D E SUPPLY

FACTORY 1 12 10 9 8 11 255 boxes

FACTORY 2 8 10 13 12 11 400 boxes

FACTORY 3 8 7 6 5 12 250 boxes

FACTORY 4 15 16 15 12 10 245 boxes

DEMAND 340boxes 160 boxes 280 boxes 150 boxes 220 boxes

Cost of Transportation

Computation for Improvement

TABLE 4
OUTLETS

FROM\TO A B C D E SUPPLY

FACTORY 1 12 10 9 8 11 255 boxes

FACTORY 2 8 10 13 12 11 400 boxes

FACTORY 3 8 7 6 5 12 250 boxes

FACTORY 4 15 16 15 12 10 245 boxes

DEMAND 340boxes 160 boxes 280 boxes 150 boxes 220 boxes

Cost of Transportation

Computation for Improvement

Conclusion/ Decision:
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Lecture Notes (Transportation part 2)

The MODI (Modified Distribution Method) Method of Transportation Problem:

In this method we have to add a new row above the table for cost factors and new column to the
left of the table. We make use of Vi for cost factors of supply and Wj for cost factors of demand. The
key to the use of MODI is to utilize the occupied cells for each Vi and Wj values, and then use these
values to calculate the net contribution of the vacant cells. Let’s consider the example last time and
solve the problem using MODI method.

Problem:

The FZJD Gravel Supply Company has received a contract to supply gravel to three new road
projects located in three different locations. Project A needs 174 truckloads, project B, 204 truckloads
and project C, 143.The company has three gravel warehouses located in three different places.
Warehouse 1 has 158 truckloads available, warehouse 2 has 184 and warehouse 3 has 179. The costs
of transportation from warehouse to the projects are from warehouse 1 to projects A, B, C; $4, $8,
and $8 per truck load, respectively. From warehouse 2: $16, $24, $16 and from warehouse 3: $8, $16,
and $24, respectively. The objective is to design a plan of distribution that will minimize the cost of
transportation.

Table 1:

WAREHOUSE/PROJECT A B C SUPPLY

1 4 8 8 158

2 16 24 16 184

3 8 16 24 179

DEMAND 174 204 143

Cost of transportation:

Equations:

Values:

Computation for Improvement

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Table 2:

WAREHOUSE/PROJECT A B C SUPPLY

1 4 8 8 158

2 16 24 16 184

3 8 16 24 179

DEMAND 174 204 143

Cost of transportation:

Equations:

Values:

Computation for Improvement

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Unbalanced Transportation Problem:

In actual practice, it seldom happens that the quantity demanded is just equal to the quantity
supplied. Under normal situation, transportation problems come as unbalanced problems. But since
we can only handle a balanced table, we must find a way of converting an unbalanced table to
balanced one. This can be done by the use of dummy. A dummy is something we pretend to exist,
although in reality it does not.

We must remember the following:

1. If the demand units is greater than supply units, use a dummy supply.

2. If the supply units is greater than demand units, use dummy demand.

Example:

Given table:
WAREHOUSE/PROJECT A B C SUPPLY
1 4 8 8 76
2 16 24 16 82
3 8 16 24 77
DEMAND 72 102 41

Converted table:
WAREHOUSE/PROJECT A B C SUPPLY
1 4 8 8 76
2 16 24 16 82
3 8 16 24 77

DEMAND 72 102 41
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Degenerated Transportation Problems:

If the total number of used cells is not equal to the number of rows plus the number of columns minus
one, degeneracy in transportation occurs. Degeneracy may occur in an initial solution (Table 1) or in
subsequent solutions. Degenerate table is one cannot be improved due to lack of entries.

Degeneracy in an Initial Solution

This particular case of degeneracy arises when in using northwest Method of initial distribution, both
column requirement and row requirement are satisfied simultaneously, thus breaking the stair-step
pattern. To resolve this, we assign a zero entry to one of the unused cells. Example below will illustrate
this situation.

Example:

WAREHOUSE/PROJECT A B C SUPPLY
1 4 8 8 55
2 16 24 16 25
3 8 16 24 30
DEMAND 35 45 30
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Degeneracy in a Subsequent Solution

Some transportation problems begin with an initial table that is not degenerate, but in the process of
finding the optimum solution, degeneracy arises. This happen when a tie exists between two or more
entries that represent the smallest on the path of improvement with minus sign. The following table
has an initial solution which is not degenerate. Using MODI method, we will illustrate using the
example below.

Example:

Table 1:

WAREHOUSE/PROJECT A B C SUPPLY
1 4 8 8 95
2 8 4 8 65
3 16 4 16 35
DEMAND 50 80 65

Table 2:

WAREHOUSE/PROJECT A B C SUPPLY
1 4 8 8 95
2 8 4 8 65
3 16 4 16 35
DEMAND 50 80 65
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Summary on the Iteration of the Transportation Table:

1. A transportation table is workable only if the total demand quantity equals to the total supply
quantity, and the number of occupied cells equals the number of rows plus the number of
column minus one.

2. If demand is not equal to supply, add a dummy supply row if demand is greater; and add a
dummy demand column, if supply is greater.

3. In case of degeneracy in an initial solution, use zero entry in a vacant cell such that a stair-step
chain remains.

4. In the case of degeneracy in a subsequent table, retain a zero difference in one of the vacant
cell but make sure that all the other vacant will have their adjacent sides at the end of each
route.

Maximization Transportation Problem:

Maximization transportation problems have the same procedure of solving as that of minimization,
except that instead of finding the greatest negative value in the computation for improvement, we
find the greatest positive value. The reason is obvious, positive value in the improvement indicates
the greatest contribution to the objective. Stop when all the improvements are either zero or
negative. Degeneracy, Unbalanced may occur also, and you will follow the earlier discussion to
achieve the optimum solution.

Practice Problem 2
Example: Solve the Maximization Problem below using MODI Method

Table 1:

WAREHOUSE/PROJECT A B C SUPPLY
1 30 100 120 20
2 40 110 80 30
3 80 110 40 20
DEMAND 15 25 18

Table 2: Computation for Improvement

WAREHOUSE/PROJECT A B C SUPPLY
1 30 100 120 20
2 40 110 80 30
3 80 110 40 20

DEMAND 15 25 18

Contribution to Profit:

Equations: Values:
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Table 3: Computation for Improvement

WAREHOUSE/PROJECT A B C SUPPLY
1 30 100 120 20
2 40 110 80 30
3 80 110 40 20

DEMAND 15 25 18

Contribution to Profit:

Equations: Values:

Table 4: Computation for Improvement

WAREHOUSE/PROJECT A B C SUPPLY
1 30 100 120 20
2 40 110 80 30
3 80 110 40 20

DEMAND 15 25 18

Contribution to Profit:

Equations: Values:

Table 5: Computation for Improvement

WAREHOUSE/PROJECT A B C SUPPLY
1 30 100 120 20
2 40 110 80 30
3 80 110 40 20

DEMAND 15 25 18

Contribution to Profit:

Equations: Values:

Conclusion: