Transportation:

Introduction
• The basic transportation problem involves
trying to find the least cost way to transport
items from a set of sources to a set of
destinations
Definition of Terms
 What are the sources and destinations?

Sources Destinations
Set of sending locations Set of receiving locations
• Factories • Warehouses
• regional warehouses • Retail houses
(Each have a specific supply) (Each have a specific demand)
What is Balanced and Unbalanced?
Balanced: Unbalanced:
• SUPPLY = DEMAND • SUPPLY ≠ DEMAND
Determine the initial feasible solution

Is the solution optimal?

Yes STOP

No

Develop an improved
solution by reallocation
 Phase 1: Determine the Initial Basic
Feasible Solution
In this class we will learn about the
• NORTHWEST CORNER CELL METHOD
• LEAST COST CELL METHOD
 North West Method
• Steps Northwest Corner Method:
• 1. Starting at the upper left-hand corner (hence the name north-west), find
the lesser value between the supply and demand. Allocate to the north west
cell
• 2. Subtract the allocated value to the corresponding supply and demand
• 3. Delete the entire cell that results to zero
• 4. Select the next north-west cell and repeat the process until the supplies
are exhausted and the demands are met
• 5. Create an equation to find the total cost
 Example: NORTHWEST METHOD
• Harley’s Sand and Gravel Pit has contracted to provide topsoil for 2
residential housing developments
Supply from 3 different Farms Demand For Top Soil

Farm Weekly Capacity (Cubic Project Weekly Demand (Cubic

Yards) Yards)
A 100 1 50

B 200 2 150

C 200 3 300

Cost Per Cubic Yard

From Project #1 Project # 2 Project# 3

Farm A 4 2 8

Farm B 5 1 9

Farm C 7 6 3
Step 1: Choose the lesser value between the
supply and demand
Project 1 Project 2 Project 3 SUPPLY
To:
From
Farm A

Farm B

Farm C

DEMAND
Phase II: Evaluating the Current Solution- Stepping Stone
Method

• Stepping Stone Method: Is one way to evaluate the current

solution to determine if it is optimal or if a better, lower cost
solution may be found
• Evaluation Index: The net change in cost (or profit) per unit
that results from using an empty cell in the transportation
problem
• Basic Concept: If any change is made to the number of units in
a cell, other changes must be made in that row and column to
offset that change to ensure that supplies are not exceeded and
demands are met
ALTERNATIVE METHOD IN FINDING THE INITIAL
BASIC VARIABLE SOLUTION
LEAST COST CELL METHOD

Begins by simply finding the lowest- cost cell in the

transportation table and putting as many units as
possible in that cell
 Example: LEAST COST METHOD
• Harley’s Sand and Gravel Pit has contracted to provide topsoil for 2
residential housing developments
Supply from 3 different Farms Demand For Top Soil

Farm Weekly Capacity (Cubic Project Weekly Demand (Cubic

Yards) Yards)
A 100 1 50

B 200 2 150

C 200 3 300

Cost Per Cubic Yard

From Project #1 Project # 2 Project# 3

Farm A 4 2 8

Farm B 5 1 9

Farm C 7 6 3
Phase II: Find the Optimization using the Modi
Method

• Modified Distribution Method (Modi Method): used in

larger problems.
• MODI method evaluates empty cells by comparing some
MODI row values and MODI column values with the
shipping costs
Unbalanced Problem
BSA12KA1 Inc. produces room air conditioners in manufacturing plants located in Marikina, Manila, Pasig. These are sent to regional
distributors in Cebu, Davao, and Cagayan De Oro. The production capacities, demands, and shipping costs are shown in the following
table:

Cebu Davao Cagayan De Oro Capacity

Marikina 8 12 10 850
Manila 10 14 9 650
Pasig 11 8 12 300
Demand 800 600 200
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