GROUP-A

OPERATIONS RESEARCH

Presented By:
• Anju
• Arsha Narendran
• Anshul Nagar
• Abhijeet Modgil
• Aakansha Mathur
TOPICS COVERED:

• TRANSPORTATION
MODEL

• TRANSHIPMENT MODEL
TRANSPORTATION MODEL
DEFINING TRANSPORTATION
MODEL:
• Introduced by “T.C.KOOPMANS” in 1947, who
presented a study called optimum utilization of
“Transportation System”.

• 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).

• Transportation Problem (T.P) is a problem

concerning transportation of goods and
services from different origins (factories,
warehouses) to various destinations (dealers,
customers).
DECISION: Depends on availability/ supply,
Requirement/demand and transportation
cost.

OBJECTIVE: To determine the shipping

schedule that minimizes the total shipping
cost while satisfying supply and demand
limits.
Assumptions
• Total quantity of the item available at
different sources = total requirement at
different destinations.
• Items can be transported convientely from
all sources to destination.
• The unit transportation cost of the item
from all sources to destination is precisely
known.
Assumptions
• Items to be shipped are
homogeneous.

• Only one route between origin

and destination.

• The shipping cost is

proportional to the number of
units shipped on a given route.
 Destination j
1 2 j n Supply
a1
1 c11 c12 c1j c1n
S 2 a2
O
U
R
C
E ai
i ci1 ci2 cij cin
i

m
cm1 cm2 cmn am
MA 4020-Transportation problems 8
Demand b1 b2 bj bn
 PROBLEM MODEL:
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:
Availability at source i is ai (i=1, 2, …, m) and
Demand at the destination j is bj (j=1, 2, …, n).
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 n
Minimize z   c x ij ij
i 1 j 1
•The problem is a balanced one. That is,
total availability equals total demand.
m n

 a  b
i 1
i
j 1
j

•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)
The Unbalanced Transportation Model
- When demand exceeds supply a dummy row is added to the table.

An Unbalanced Model
(Demand . Supply)
 The Unbalanced Transportation Model
- When supply exceeds demand, a dummy column is added to the table.
- The dummy column (or dummy row) has no effect on the initial solution
methods or the optimal solution methods.

An Unbalanced Model (Supply . Demand)

BASIC TERMINOLOGIES:
 Feasible solution (FS): It is a set of non-
negative allocations, that satisfies the RIM
conditions.
 Basic feasible solution (BFS): A feasible
solution to m-origins, n-destinations-the
number of occupied cells is equal to m+n-
1 (the sum of rows and columns less one)
 Optimal solution(OS): Final or optimal
solution to the problem that minimizes the
transportation cost.
Non degeneracy –
If a basic feasible solution to a (m x n )
transportation problem has total number of non negative
allocation equals to m+n-1, then this condition is
called Non Degeneracy in transportation problem.

Degeneracy –
If a basic feasible solution to a (m x n )
transportation problem has total number of non negative
allocation is less then m+n-1,then this condition is called
Degeneracy in transportation problem
METHODS employed
• NWCM(North West Corner
Method)
• CM(Column Minima)
• LCM(Least Cost Method)
• Row Minima Method.
• VAM(Vogel’s Approximation
Method)
• MODI Method.
The Northwest Corner Method
Summary of Steps
• 1. Allocate as much as possible to the cell
in the upper left-hand corner, subject to
the supply and demand conditions.
• 2. Allocate as much as possible to the
next adjacent feasible cell.
• 3. Repeat step 2 until all rim requirements
are met.
 The Modified Distribution Method
(MODI)
Summary of Steps
1. Develop an initial solution.
2. Compute the ui and vj values for each row
and column.
3. Compute the cost change, kij, for each
empty cell.
4. Allocate as much as possible to the empty
cell that will result in the greatest net
decrease in cost (most negative kij)
5. Repeat steps 2 through 4 until all kij values
are positive or zero.
 Vogel’s Approximation Method
(VAM)
• Method is based on the concept of penalty cost or
regret.
- A penalty cost is the difference between the lowest
and the next lowest cell cost in a row (or column).

Summary of Steps:
1. Determine the penalty cost for each row and column.
2. Select the row or column with the highest penalty cost.
3. Allocate as much as possible to the feasible cell with the
lowest transportation cost in the row or column with the
highest penalty cost.
4. Repeat steps 1, 2, and 3 until all rim requirements have
been met.
 DEGENERACY IN TRANSPORTATION
MODEL
• When solving the transportation problem ,the
number of possible routes should be  m+n-1.
• If it is <m+n-1, it is called a Degenerate Solution.
In such a case evaluation of the solution will not
be possible.
• In order to evaluate the cells /routes (using the
u-v method) we need to introduce some used
cells/routes carrying / transporting a very small
quantity.
 TRANSHIPMENT
• A transportation problem allows only
shipments that go directly from supply points
to demand points. In many situations,
shipments are allowed between supply
points or between demand points.
Sometimes there may also be points (called
transhipment points) through which goods
can be transhipped on their journey from a
supply point to a demand point. Fortunately,
the optimal solution to a transhipment
problem can be found by solving a
transportation problem.
 Transhipment Problem
• An extension of a transportation problem:
• More general than the transportation problem in that in
this problem there are intermediate “transhipment
points”. In addition, shipments may be allowed
between supply points and/or between demand points
• LP Formulation
• Supply point: It can send goods to another point but
cannot receive goods from any other point
• Demand point: It can receive goods from other points
but cannot send goods to any other point
• Transhipment point: It can both receive goods from
other points, send goods to other points
The following steps describe how the optimal
solution to a transhipment problem can be found by
solving a transportation problem.
Step1. If necessary, add a dummy demand point
(with a supply of 0 and a demand equal to the
problem’s excess supply) to balance the problem.
Shipments to the dummy and from a point to itself
will be zero.
Step2. Construct a transportation table as follows:
A row in the table will be needed for each supply
point and transhipment point, and a column will be
needed for each demand point and transhipment
point.
• Each supply point will have a supply equal to it’s
original supply, and each demand point will have a
demand equal to its original demand.

•This ensures that any transhipment point that is a

net supplier will have a net outflow equal to point’s
original supply and a net demander will have a net
inflow equal to point’s original demand.
 Limitations of Transportation Problem
• One commodity only: any one product
supplied and demanded at multiple locations.
• Merchandise
• Electricity, water
• Invalid for multiple commodities: (UNLESS
transporting any one of the multiple commodities
is completely independent of transporting any
other commodity and hence can be treated by
itself alone)
• Example: Transporting product 1 and product 2 from
the supply points to the demand points where the
total amount (of the two products) transported on a
link is subject to a capacity constraint where economy
of scale can be achieved by transporting the two
products on the same link at a larger total volume and
at a lower unit cost of transportation
Limitations of Transportation Problem
• Difficult to generalize the technique.
(there are generic difficulty for “mathematical
programming,” including linear and non-linear
programming).
• Economy of scale: the per-unit cost of transportation on a
link decreasing with the volume.

EXAMPLE:
• Fixed-cost: transportation usually involves fixed charges. For
example, the cost of truck rental (or cost of trucking in
general) consists of a fixed charge that is independent of the
mileage and a mileage charge that is proportional to the total
mileage driven. Such fixed charges render the objective
function NON-LINEAR and make the problem much more
difficult to solve.
PRACTICAL APPLICATIONS:
• Scheduling
• Production
• Investment
• Plant location
• Inventory Control
• Employment Scheduling
• Personnel assignment
• Product mix problems
DIFFERENCE BETWEEN
TRANSPORTATION AND ASSIGNMENT

TRANSPORTATION ASSIGNMENT
• It is a specific case of • It is a special type of
linear programming transportation problem
concerned with where the objective is to
scheduling shipments minimize the or time of
from sources to completing a no. of
destinations so that total jobs(activities) by a no. of
transportation costs are persons (resources) in
minimized. such a way that only one
job is assigned to one
person.
TRANSPORTATION
 Here, total supply by each
origin equals total demand
at each destinations.
 Opportunity costs are the
cost savings foregone by
not using an empty cell
used f the transportation
matrix.
 Methods used are:
 Modified distribution(MODI)
 VAM
 North west corner
ASSIGNMENT
• There is no demand and
supply in assignment.
• Here ,opportunity costs
are the costs associated
with a foregone
opportunity in order to
make a particular
decision.
• Methods used are:
• Hungarian
• Matrix reduction
TRANSPORTATION ASSIGNMENT

• In transportation, dummy • Here, dummy rows or

source are added so that columns are added so
demand and supply are that no. of rows and
equal. columns are equal.

• An application of • It helps in assigning

transportation method individual jobs to
helps a firm to decide individual processing
where to locate a new components on a one to
factory or a warehouse. one basis , with the goal
of minimizing the total
costs or time of
accomplishing the jobs.
THANK YOU..