THE TRANSPORTATION

MODEL
MODULE IV
Transportation Model - Vogel’s
approximation method - MODI
method - Minimization case -
Maximization case – Unbalanced
problem
REFERENCE BOOKS – MUST READ
CAREFULLY

1. An Introduction to Management Science:

Quantitative Approaches to decision making
- Anderson, Sweeney, Williams
2. Operations Research - Kanti Swaroop
3. Operations Research - Hamdy A Taha
4. Operations Research - S.Kalavathy
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 transportation schedule
that minimizes the total transportation cost
while satisfying supply and demand limits.
We assume that there are m sources 1,2, …, m and n
destinations 1, 2, …, n. The cost of transporting one
unit from Source i to Destination j is cij.
We assume that the availability(supply) 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.
m n
That is
 ai   b j
i 1 j 1

That is, total availability equals total demand.

Let xij be the amount of commodity to be
shipped from the source i to the
destination j.

We present the data in an mn table

called the transportation matrix or the
cost effectiveness matrix shown below.
 Destination
1 2 . . n Supply
x11 x12 x1n
1 c12
a1
S C11 C1n

o x21 x22 x2n

2 C21 C22 C2n a2
u
r
c
e
. xm1 xm2 xmn
Cm1 Cm2 Cmn
am
.
Demand b1 b2 bn
m
Thus the problem becomes the LPP
m n
Minimize z  c i 1 j 1
ij x ij

subject to
n

x
j 1
ij  a i ( i  1, 2 ,..., m )

x
i 1
ij  b j ( j  1, 2 ,..., n )

x ij  0
OBJECTIVE OF THE TRANSPORTATION MODEL

To determine the amount of the commodity

to be shifted from each source to each
destination such that the total
transportation cost is minimized and the
demand at each destination (requirement
centre) is met.
DEFINTIONS
 A set of non-negative values (allocations)
xij that satisfies the constraints (rim
conditions) and also the non - negativity
restrictions is called a feasible solution to
the transportation problem.
 A feasible solution to an m x n
transportation problem that has not more
than (m + n – 1) non – negative
allocations is called a basic feasible
solution to the transportation problem.
DEFINTIONS (contd.)
 A basic feasible solution to an m x n
transportation problem is said to be non –
degenerate if it contains exactly (m + n – 1)
non – negative allocations and degenerate if
it contains less than (m + n – 1) non –
negative allocations in independent
positions.
 A feasible solution (not necessarily basic) is
said to be an optimal solution if it minimizes
the total transportation cost (or maximises
the profit)
CONDITION FOR A FEASIBLE SOLUTION OF THE
TRANSPORTATION PROBLEM

The necessary and sufficient condition for

the transportation problem to have a
feasible solution is that the

Total supply = Total demand

That is, the problem must be balanced.

OPTIMAL SOLUTION OF THE TRANSPORTATION
PROBLEM – PROCEDURAL STEPS

1. Find the initial basic feasible solution using

a) North West Corner Rule
b) Least Cost Matrix
c) Vogel’s Approximation Method/ Penalty
Method
2. Find an optimal solution by making
successive improvements using MODI
Method.
NORTH WEST CORNER RULE
1. Starting with the cell at the upper – left (north-
west) corner of the transportation matrix, allocate
as much as possible. That is, x11= min (a1, b1).
2. (i) If min (a1, b1) = a1 put x11= a1, decrease b1 by
a1, and move vertically to the second row and
make the second allocation x21= min (a2, b1 - x11)
in the cell (2,1) . Cross out the first row.
(ii)If min (a1, b1) = b1 put x11= b1, decrease a1 by
b1, and move horizontally to the second row and
make the second allocation x12= min (a1 - x11, b2)
in the cell (1,2) . Cross out the first column.
NORTH WEST CORNER RULE (contd.)

(iii) If a1 = b1 then put x11= a1 = b1.

Cross out the first row and the first
column and move diagonally .
3.Repeat steps 1 and 2 until rim
requirements are met.
PROBLEM 1
1. MG Auto has three plants in Chennai, Fatehpur and
Kolkata, and five distribution centers in Coimbatore,
Hyderabad, Mumbai, Delhi and Chandigarh. The
capacities of the plants (each quarter), the quarterly
demands at the distribution centers and the
transportation cost per car from the plants to the
distribution centers are given below. Find the initial
basic feasible solution to this problem using North West
Corner Rule.
Distribution Centers Supply
Chennai 2 11 10 3 7 4
Plants Fatehpur 1 4 7 2 1 8
Kolkata 3 9 4 8 12 9
Demand 3 3 4 5 6
PROBLEM 2
Three refineries with daily capacities of 7, 12 and 11
million gallons of petrol, respectively, supply three
distribution areas with daily demands of 10 million
gallons each. Petrol is distributed to the three
distribution areas through a network of pipelines. The
table below gives the transportation cost of
transportation (in thousands of rupees) between the
refineries and the distribution areas. Using the North
West Corner Rule approximation find the initial
solution.
Distribution Centres Supply
1 2 6 7
Refineries 0 4 2 12
3 1 5 11
PROBLEM 3

Obtain an initial basic feasible solution to the

following Transportation problem using the
North West corner Rule.

Distribution Centers Supply

1 2 3 4
Supply
Centers 1 2 3 11 7 6
2 1 0 6 1 1
3 5 8 15 9 10
Demand 7 5 3 2
HOMEWORK
1. Three orchards supply crates of oranges to four retailers.
The daily demand at the four retailers is 200, 225, 275,
and 250 crates, respectively. Supply at the three orchards
is estimated at 250, 300, and 400 crates daily. The
transportation costs (in rupees) per crate from the
orchards to the retailers are given in Table below. Find
the initial basic feasible solution to this problem using
the North West Corner Rule.
Retailers Supply
11 13 17 14 250
16 18 14 10 300
Orchards
21 24 13 10 400
Demand 200 225 275 250
LEAST COST METHOD
1. Identify the cell with the smallest cost
and allocate as much as possible. That
is, xij= min (ai, bj).
2. (i) If min (ai, bj) = ai put xij= ai,
decrease bj by ai. Cross out the ith row.
(ii)If min (ai, bj) = bj put xij= bj,
decrease ai by bj. Cross out the jth
column.
(iii)If min (ai, bj) = ai = bj then put
xij = ai = bj. Cross out both the ith row
and the jth column.
LEAST COST METHOD (contd.)

3. Repeat step 1 for the resulting reduced

transportation matrix until all rim
requirements are met.
 PROBLEM 1
Mangoes have to be transported from farms in Tamil
Nadu, Andhra Pradesh and Maharashtra to 4 factories of
Tasty Squash Ltd. located elsewhere in India. Determine
using the Least Cost Method, how many tons of mangoes
must be transported from each farm to each factory so that
the total cost of transportation is minimized given the
following data pertaining to the transportation cost (in
thousands of rupees).
FACTORIES
F 1 2 3 4 Suppl
A
R y
M
S
TAMIL NADU 1 2 1 4 30
ANDHRA 3 3 2 1 50
PRADESH
MAHARASHTRA 4 2 5 9 20
PROBLEM 2
The following table gives the cost of transportation
per ton (in thousands of rupees) of wheat from the
distribution centers to the supply centers of a Public
Distribution System. Obtain an initial basic feasible
solution to the following Transportation problem
using the Least Cost Method.
Distribution Centers Supply
1 2 3 4
Supply
Centers 1 5 3 7 2 30
2 8 2 1 5 70
3 6 2 3 2 50
Demand 20 40 40 50
PROBLEM 3

Obtain an initial basic feasible solution to the

following Transportation problem using the
Least Cost Method.

Distribution Centers Supply

1 2 3 4
Supply
Centers 1 2 3 11 7 6
2 1 0 6 1 1
3 5 8 15 9 10
Demand 7 5 3 2
HOMEWORK

Obtain an initial basic feasible solution to the

following Transportation problem using the
Least Cost Method.

Distribution Centers Supply

1 2 3
Supply
Centers 1 1 2 6 7
2 0 4 2 12
3 3 1 5 11
Demand 10 10 10
VOGEL’S APPROXIMATION METHOD
1. Find the difference (penalty) between the
smallest and the next smallest element in each
row(column) and write them in brackets beside
each row(column).
2. Identify the row/column with largest penalty (if
tie occurs break it arbitrarily). Choose the cell
with the smallest cost in the selected
row/column and allocate as much as possible to
this cell. Cross out the satisfied row/column.
3. Compute the row and column penalties for the
reduced transportation matrix and go to step 2.
Repeat till rim requirements are satisfied.
PROBLEM 1
1. Three orchards supply crates of oranges to four retailers.
The daily demand at the four retailers is 200, 225, 275,
and 250 crates, respectively. Supply at the three orchards
is estimated at 250, 300, and 400 crates daily. The
transportation costs (in rupees) per crate from the
orchards to the retailers are given in Table below. Find
the initial basic feasible solution using Vogel’s
approximation method.
Retailers Supply
11 13 17 14 250
16 18 14 10 300
Orchards
21 24 13 10 400
Demand 200 225 275 250
PROBLEM 2
Three refineries with daily capacities of 7, 12 and 11
million gallons of petrol, respectively, supply three
distribution areas with daily demands of 10 million
gallons each. Petrol is distributed to the three
distribution areas through a network of pipelines. The
table below gives the transportation cost of
transportation (in thousands of rupees) between the
refineries and the distribution areas. Using Vogel’s
approximation find the initial solution.
Distribution Centres Supply
1 2 6 7
Refineries 0 4 2 12
3 1 5 11
Demand 10 10 10
 PROBLEM 3
Determine how many tons of wheat must be transported from each grain
elevator to each mill on a monthly basis in order to minimize the total
cost of transportation given the following data?
Grain Elevator Supply Mill Demand
1. Amritsar 150 A. Jaipur 200
2. Coimbatore 175 B. Mysore 100
3. Kalahandi 275 C. Puri 300
Jaipur Mysore Puri Supply
Amritsar 6 8 10 150
Coimbatore 7 11 11 175
Kalahanadi 4 5 12 275
Demand 200 100 300
HOMEWORK

Obtain an initial basic feasible solution to the

following Transportation problem using the
Vogel’s approximation Method.

Distribution Centers Supply

1 2 3 4
Supply
Centers 1 2 3 11 7 6
2 1 0 6 1 1
3 5 8 15 9 10
Demand 7 5 3 2
MODI METHOD (MODIFIED DISTRIBUTION METHOD)
1. Find an initial basic feasible solution.
2. Check the number of allocated cells. If these are
less than (m + n -1) there exists degeneracy and
we add a very small positive assignment in suitable
independent positions so that the total number of
independent allocated positions is (m + n -1).
3. Compute the ui and vj values for each row and
column, from the relation cij = ui + vj , for each
occupied cell (i,j), starting initially with ui = 0 or
vj = 0, preferably for which the corresponding rows
or columns has maximum number of individual
allocations
MODI METHOD (contd.)
4. Find dij = cij – (ui + vj) and enter at the upper right
hand corner of each unoccupied cell.
5. (i) If all dij > 0, then the solution under test is
optimal and unique.
(ii) If all dij > 0, with at least one dij = 0, then the
solution under test is optimal and an alternative
optimal solution exists.
(iii) If at least one dij < 0, then the solution is not
optimal. Go to the next step.
 MODI METHOD (contd.)
6. Form a new basic feasible solution by giving
maximum allocation to the cell for which dij is most
negative by making an occupied cell empty.
For this draw a closed path consisting of horizontal
and vertical lines beginning and ending at the cell for
which dij is most negative and having all of its other
corners at some allocated cell.
Along this loop indicate +q and - q alternatively at
the corners.
Choose the minimum of the allocations from the
cells with – .q.
Add this minimum allocation to the cells with + q
and subtract from cells with – q
MODI METHOD (contd.)

7. Repeat steps 2 to 5 to test the optimality of the

new basic feasible solution.
8. Continue the above procedure until an optimum
solution is attained.
PROBLEM 1
The South East Cement Company has 3 factories in Tamil
Nadu supplying 4 distribution centres located elsewhere.
The monthly production capacities of the factories are 11,
13 and 19 tons, and the monthly requirements at the
distribution centres are 6, 10, 12 and 15 tons ,
respectively. The transportation cost ( in thousands of
rupees) per ton is given below. Determine an optimum
transportation schedule that would minimise the overall
cost.
Distribution Centers
1 2 3 4
1 21 16 25 13
Factories
2 17 18 14 23
3 32 27 18 41
PROBLEM 2
The Koolair Company has 3 plants manufacturing Air
conditioners with capacities of 30, 40 and 30 units per
month. It markets these Air conditioners through 3
warehouses whose requirements are 45, 35 and 20 units
per month. The cost of transportation ( in rupees) per unit
is given below. How should the units be transported to
minimise the cost.

Warehouses
P Q R
1 13 11 8
Plants
2 14 16 13
3 12 10 12
PROBLEM 3
Obtain the optimal solution for the transportation problem
whose matrix is given below.

Demand Centres Suppl

y
P Q R
Production 1 7 3 2 2
Centres
2 2 1 3
3
3 3 4 6
5
Demand 4 1 5
PROBLEM 4
The Palath Pickles Company has 3 factories in Kerala
supplying 5 distribution centres located in different parts
of the country. The daily production capacities of the
factories are 100, 120 and 120 bottles, and the daily
requirements at the distribution centres are 40, 50, 70, 90
and 90 bottles, respectively. The transportation cost (in
rupees) per bottle is given below. Determine an optimum
transportation schedule that would minimise the overall
cost.
Distribution Centers
1 2 3 4 5
1 4 1 2 6 9
Factories
2 6 4 3 5 7
3 5 2 6 4 8
UNBALANCED TRANSPORTATION MODEL
 If a transportation problem is unbalanced, that is, if
total availability is not equal to the total demand

m n

a
i 1
i  b
j 1
j

Then we have to convert this to a balanced

problem, by introducing a dummy source or
destination with zero transportation costs and
then solve by the usual method
PROBLEM 1
Obtain the optimal solution for the transportation problem
whose matrix is given below.

Demand Centres Suppl

y
P Q R S
Production 1 11 20 7 8 50
Centres
2 21 16 20 12 40
3 8 12 18 9 70
Demand 30 25 35 40
HOMEWORK
Obtain the optimal solution for the transportation problem
whose matrix is given below.

Demand Centres Suppl

y
P Q R
Production 1 6 8 10 150
Centres
2 7 11 11 175
4 4 5 12 275
Demand 200 100 350
MAXIMISATON IN TRANSPORTATION MODEL

 In a transportation problem the objective is to

minimize the transportation cost. If the objective
is to maximize the profit then we convert the
maximization problem into a minimization
problem by subtracting all the entries of the cost
matrix from the highest entry in that matrix. We
then solve the problem as usual.
PROBLEM 1
Solve the following transportation problem to
maximise the profit.

Demand Centres Suppl

y
A B C D
Production
Centres 1 40 25 22 33 100
2 44 35 30 30 30
3 38 38 28 30 70
Demand 40 20 60 30
PROBLEM 2
Obtain the optimal solution for the transportation
problem whose matrix is given below by maximising the
profit.
Demand Centres Suppl
y
P Q R S
Production 1 15 51 42 33 23
Centres
2 80 42 26 81 44
3 90 40 66 60 33
Demand 23 31 16 30
DEGENERACY IN TRANSPORTATION MODEL
 In a transportation problem whenever the number
of non-negative independent allocations is less than
(m + n - 1) the problem is said to be degenerate.
 Degeneracy may occur either at the initial stage or
at an intermediate stage or at a subsequent
iteration.
 To resolve degeneracy, allocate an extremely small
amount e (close to zero) to one or more empty
cells of the transportation matrix (generally
minimum cost cells in independent positions)such
that,
DEGENERACY IN TRANSPORTATION MODEL (contd.)
(i) 0 < e < xij for all xij > 0
(ii) xij ± e = xij for all xij > 0
 The cells containing e are then treated like other
occupied cells and the problem is solved in the
usual way.
 The es are kept till the optimum solution is reached
and then we let each e  0
PROBLEM 1
The following table gives the cost of transportation
per ton (in thousands of rupees) of wheat from the
distribution centers to the supply centers of a Public
Distribution System. Obtain an optimal solution
minimising the overall cost.

Distribution Centers Supply

1 2 3 4
Supply
Centers 1 5 3 7 2 30
2 8 2 1 5 70
3 6 2 3 2 50
Demand 20 40 60 50
PROBLEM 2
Obtain the optimal solution for the transportation problem
whose matrix is given below.

Demand Centres Suppl

y
A B C D
Production
Centres 1 1 2 3 4 6
2 4 3 2 0 8
3 0 2 2 1 10
Demand 4 6 8 6
PROBLEM 3
Obtain the optimal solution for the transportation problem
whose matrix is given below.
Demand Centres Suppl
y
P Q R S
Production 1 10 20 5 7 10
Centres
2 13 9 12 8 20
3 4 5 7 9 30
4 14 7 1 0 40
5 3 12 5 19 50
Demand 60 60 20 10