The Transportation Model

Formulations

The Transportation Model

The transportation model is a special class of LPPs
that deals with transporting(=shipping) a
commodity from sources (e.g. factories) to
destinations (e.g. warehouses). The objective is to
determine the shipping schedule that minimizes the
total shipping cost while satisfying supply and
demand limits. We assume that the shipping cost is
proportional to the number of units shipped on a
given route.

We assume that there are m sources 1,2, , m and n

destinations 1, 2, , n. The cost of shipping one unit
from Source i to Destination j is cij.
We assume that the availability at source i is
ai (i=1, 2, , m) and the demand at the destination j is
bj (j=1, 2, , n). We make an important assumption:
the problem is a balanced one. That is
m

a b
i 1

j 1

That is, total availability equals total demand.

We can always meet this condition by introducing

a dummy source (if the total demand is more than
the total supply) or a dummy destination (if the
total supply is more than the total demand).
Let xij be the amount of commodity to be shipped
from the source i to the destination j.

Thus the problem becomes the LPP

m

Minimize

z
i 1

subject to

x
j 1

ij

x
i 1

ij

c
j 1

ij

xij

ai (i 1,2,..., m)
b j ( j 1,2,..., n)

xij 0

Thus there are mn decision variables xij and m+n

constraints. Since the sum of the first m constraints
equals the sum of the last n constraints (because
the problem is a balanced one), one of the
constraints is redundant and we can show that the
other m+n-1 constraints are LI. Thus any BFS will
have only m+n-1 nonzero variables.
Though we can solve the above LPP by Simplex
method, we solve it by a special algorithm called
the transportation algorithm. We present the data
in an mn tableau as explained below.

Destination
2
.

c11

c12

c1n

c21

c22

c2n

cm1

cm2

cmn

Demand. b1

b2

bn

S
o
u
r
c
e

1
2

Supply
a1
a2

am

Formulation of Transportation Models

Example 5.1-2
MG Auto has three plants in Los Angeles, Detroit,
and New Orleans, and two major distribution
centers in Denver and Miami. The capacities of the
three plants during the next quarter are 1000, 1300
and 1200 cars. The quarterly demands at the two
distribution centers are 2300 and 1400 cars. The
transportation cost per car from Los Angeles to
Denver and Miami are $80 and $215 respectively.
The corresponding figures from Detroit and New
Orleans are 100, 108 and 102, 68 respectively.

Formulate the transportation Model.

Since the total demand = 3700 > 3500 (Total
supply) we introduce a dummy supply with
availability 3700-3500=200 units to make the
problem a balanced one. If a destination
receives u units from the dummy source, it
means that that destination gets u units less
than what it demanded. We usually put the cost
per unit of transporting from a dummy source
as zero (unless some restrictions are there).
Thus we get the transportation tableau

Destination
Denver Miami Supply

S
o
u
r
c
e

Los Angeles
Detroit
New Orleans
Dummy

80

215

1000

100

108

1300

102

68

1200

200

Demand 2300

1400

We write inside the (i,j) cell the amount to be

shipped from source i to destination j. A blank
inside a cell indicates no amount was shipped.

Problem 5 Problem Set 5.1A Page 169

In the previous problem, penalty costs are levied
at the rate of $200 and $300 for each undelivered
car at Denver and Miami respectively.
Additionally no deliveries are made from the Los
Angeles plant to the Miami distribution center.
Set up the transportation model.
The above imply that the "cost" of transporting a
car from the dummy source to Denver and Miami
are respectively 200 and 300. The second condition
means we put a "high" transportation cost from
Los Angeles to Miami. We thus get the tableau

Destination
Denver Miami Supply

S
o
u
r
c
e

Los Angeles
Detroit
New Orleans
Dummy

80

1000

100

108

1300

102

68

1200

200

300

200

Demand 2300

1400

Note: M indicates a very "big" positive number.

In TORA it is denoted by "infinity".

Problem 8 Problem Set 5.1A Page 170

Three refineries with daily capacities of 6,5, and 8
million gallons, respectively, supply three
distribution areas with daily demands of 4,8, and 7
million gallons, respectively.Gasoline is distributed
to the three distribution areas through a network of
pipelines. The transportation cost is 10 cents per
1000 gallons per pipeline mile. The table below
gives the mileage between the refineries and the
distribution areas. Refinery 1 is not connected to the
distribution area 3.

Distribution Area
1
2
3
1
Refinery 2
3

120
300
200

180
100
250

80
120

Construct the associated transportation model.

(Solution in the next slide)

S
o
u
r
c
e

Destination
Distribution Area
1

Refinery 2
3

Supply

12

18

30

10

20

25

12

Demand 4

The problem is a balanced one. M indicates a

very "big" positive number.
3

The total cost will be 1000*

c
i 1 j 1

ij

xij

Problem 10 Problem Set 5.1A Page 170

In the previous problem, suppose that the daily
demand at area 3 drops to 4 million gallons.
Surplus production at refineries 1 and 2 is diverted
to other distribution areas by truck. The
transportation cost per 100 gallons is $1.50 from
refinery 1 and $2.20 from refinery 2. Refinery 3
can divert its surplus production to other chemical
processes within the plant.
Formulate the problem as a transportation model.
We introduce a dummy destination. Solution follows.

S
o
u
1
r Refinery 2
c
e

Destination
Distribution Area

3 Dummy Supply

12

18

15

30

10

22

20

25

12

Demand 4

M indicates a very "big" positive number.

3

The total cost will be 1000*

c
i 1 j 1

ij

xij

Problem 11 Problem Set 5.1 A Pages 170-171

Three orchards supply crates of oranges to four
retailers. The daily demand at the four retailers is
150,150,400, and 100 crates, respectively. Supply
at the three orchards is dictated by available
regular labor and is estimated at 150, 200, and 250
crates daily. However, both orchards 1 and 2 have
indicated that they could supply more crates, if
necessary by using overtime labor. Orchard 3 does
not offer this option. The transportation costs (in
dollars) per crate from the orchards to the retailers
are given in Table below.

1
Orchard 2
3

1
1
2
1

Retailer
2
3
2
3
4
1
3
5

4
2
2
3

Formulate the problem as a transportation model.

Since the orchards 1, 2 can supply more crates with
overtime labor, we increase their capacities to
150+200=350 and 200+200=400 respectively (as
initially the total supply fell short by 200). But then
to balance the problem we add a dummy destination.
The tableau follows.

S
o
u
r
c
e

O
rc
h
ar
d

1
1
2
3

Destination
Retailer
3

Dummy Supply
0

400

250

150

400

100

200

Demand 150

350

Problem 8.1-9 from Hillier and Lieberman

(Introduction to Operations Research, 7 th Edition)
The Build-Em-Fast Company has agreed to supply
its best customer with three widgets during each of
the next 3 weeks, even though producing them will
require some overtime work. The relevant
production data are as follows:
Week Max Production Max Production Prod Cost / unit
Regular Time
Overtime
Regular Time
1
2
3

2
3
1

2
2
2

$300
$500
$400

The cost / unit produced overtime for each week is

$100 more than for regular time. The cost of storage
is $50 / unit for each week it is stored. There is
already an inventory of 2 widgets on hand currently,
but the company does not want to retain any widgets
in inventory after the 3 weeks.
Formulate the problem as a transportation problem.
There are 6 sources namely widgets produced
regular time and overtime for the three weeks. Also
there are 3 destinations viz. demand for the three
weeks.

We let xij as the number of units produced regular

time in week (i+1)/2 for use in week j (i=1,3,5;
j=1,2,3). We let xij as the number of units produced
overtime in week i/2 for use in week j (i=2,4,6;
j=1,2,3). Thus x x x 2
11

12

13

x21 x22 x23 2

x31 x32 x33 3
x41 x42 x43 2
x51 x52 x53 1
x61 x62 x63 2

To make these equalities we add a dummy

destination and let xi4 as the amount transported
from Source i to this dummy. Thus the
availabilities at the 6 sources are
2,2,3,2,1,2 respectively.
The demands at the three destinations (=demand
for the three weeks) are
1,3,3 respectively (as the initial inventory is 2
widgets).
To make the problem balanced we add
demand 12 7 = 5 at the dummy destination.

The cost per unit, cij are as follows:

c11 300 c12 350 c13 400 c14 0
c21 400 c22 450 c23 500 c24 0
c31 M

c32 500 c33 550 c34 0

c41 M

c42 600 c43 650 c44 0

c51 M

c52 M

c53 400 c54 0

c61 M

c62 M

c63 500 c64 0

These are written in a transportation tableau.

Destination

Demand for Week

1
2
3 Dummy Supply
300

350

400

1 400
2

450

500

500

550

600

650

400

63

500

Demand

Prod.week1
time
S Reg
Prod.week1
o Over time
u Prod.week2
Reg time
r Prod.week2
c Over time
e Prod.week3
Reg time
Prod.week3
Over time

4
5

2
2
3