 Chapter 3

 Transportation and assignment problem

 Transportation problem

•It is one important application of linear

programming

•It deals with the distribution of goods from several

points of supplies (sources) to a number of points
of demands (destinations).

•Transportation techniques are designed to

minimize the distribution costs.
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 Objectives of transportation
problem

1. To identify the optimal shipping routes

-minimum cost route

2. To identify the maximum amount that can

be shipped over the optimum route

3. To determine the total transformation cost

or the profit of transportation
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 FORMULATING THE
MODEL
1. A limited supply of one commodity is available at
certain sources or origins.

2. There is a demand for the commodity at several

destinations

3. The unit transportation cost of shipping routes

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 Assumptions

 All goods be homogeneous, so that any origin

is capable of supplying any destination, and
 Transportation costs are a direct linear function
of the quantity shipped over any route.
 the total quantity supply available is equal to
the total demand.

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 Example

Let’s consider an example. The rainbow soil farm

company has contracted to provide topsoil for three
residential housing developments. Topsoil can be
supplied from three different “farms” as follows:
Farm Weekly capacity (cubic yards)
A 100
B 200
C 200

5
 Cont…

Demand for the topsoil generated by

the construction projects is:
Project Weekly demand(cubic yards)
#1 50
#2 150
#3 300
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 Cont…

Cost per cubic yard

From/To Project #1 Project #2 Project #3
Farm A 4 2 8
Farm B 5 1 9
Farm C 7 6 3

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 Cont..
To:
From:        
From:
Project #1 Project #2 Project #3 Supply

   
  4     2     8  
   
Farm A              
   
              100
   
  5     1     9  
   
Farm B              
   
              200
   
  7     6     3  
                 
Farm C
                 
200
         
Demand
50 150 300
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 The solution approach to a
transportation problem

Step 1:
• Formulate the problem and set up in the matrix form

Step 2:
• Obtain an initial basic feasible solution
• There are 3 methods to find the initial feasible solution.
– North-West Corner Method (NWCM)
– Least Cost Method (LCM)
– Vogel’s Approximation Method (VAM)

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 Steps…

• The initial solution obtained by any of the

three methods must satisfy the following
condition:
• A. The solution must be feasible
i.e.: It must satisfy all the supply and demand
constraints
• B. The number of positive allocations
must equal to m+n-1, where m=the
number of rows and n= the number of
columns .

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 Steps….

Step 3:
• Test the initial solution for optimality
• If the current solution is optimal, then stop.
Otherwise, determine the new
improved solution.
Step 4:
• Repeat step 3 until an optimal solution is
reached

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 METHODS OF FINDING INITIAL FEASIBLE
SOLUTION

A. NORTH- WEST CORNER METHOD (NWCM)

The NWCM gets its name because the

starting point for the allocation process is
the Upper Left-hand (Northwest) corner of
the transportation table.

Therefore, allocate to the Northwest corner

as many units as possible.
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 Procedures

Step 1: Begin with the upper left-hand cell, and allocate

as many units as possible to that cell.
Step 2: Remain in a row or column until its supply or
demand is completely exhausted or satisfied,
Step 3: Repeat, the above steps (1) - (2) until all
the remaining supply and demand is completely
exhausted or satisfied.
Step 4: determine the total transportation cost

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 Initial feasible solution….NWC
To:        
From: Project #1 Project #2 Project #3 Supply
From:
     
Farm A 4     2     8  
 
50    50          
   
100
             
     
Farm B 5     1     9  
   
   100      100    
   
              200
     
7     6   3  
 
Farm C

               
200
 200
                 
 
Demand
       500
50 150 300 14
 THE LEAST- COST METHOD (LCM)

Step 1: Identify the cell that has the lowest unit cost.
Allocate a quantity to this cell that is equal to the lower
of the available supply for the row and the demand for
the column.
Step 2: Cross out the cells in the row or column that
has been exhausted (or both, if both have been
exhausted).
Step 3: Repeat, the above steps (1) - (2) until all
the remaining supply and demand is completely
exhausted or satisfied.
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 Initial feasible solution….LCM
To:        
From: Project #1 Project #2 Project #3 Supply
From:
   
Farm A 4     2     8  
 
 50          50    
   
100
             
     
Farm B 5     1     9  
   
   150      50    
   
              200
     
Farm C 7     6  200   3  
                 
                 
200
 
Demand
       
50 150 300
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 VOGEL'S APPROXIMATION METHOD (VAM) or
PENALTY METHOD

• In this method each allocation is made on

the basis of the opportunity (or penalty or
extra) cost that would have incurred if
allocation in certain cells with minimum
unit transportation cost were missed.

• In this method allocation are made so that

the penalty cost is minimized.
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 Procedures

Step 1: compute the penalty cost for each row and

column.
Note: penalty cost=smallest cost- the next smallest cost
Step 2: Identify the row and column with the largest
penalty. In this identified row (column), choose the
cell which has the smallest cost and allocate the
maximum possible quantity to this cell.
Step 3: Cross out the cells in the row or column that has
been exhausted (or both, if both have been exhausted).
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 Procedures…

Repeat, the above steps (1) - (3) until all the

remaining supply and demand is completely
exhausted or satisfied.
Step 4: determine the total transportation cost

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 Procedures

Step 1: Begin with the upper left-hand cell, and allocate

as many units as possible to that cell.
Step 2: Remain in a row or column until its supply or
demand is completely exhausted or satisfied,
Step 3: Repeat, the above steps (1) - (2) until all
the remaining supply and demand is completely
exhausted or satisfied.
Step 4: determine the total transportation cost

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 Initial feasible solution….VAM

        Penal Penal Penal Penal

To: Project Project Project #3 Sup ity ity ity ity
From: cost cost cost cost
#1 #2 ply
From:
      4     2     8   2 4
Farm
2
  50           50    100
A
                 
      5     1     9   4 4
Farm
4
       15        50   200
B 0
                 
      7     6     3  
Farm
3
               200   200
C                  

         
Dema 50 150 300
nd

Penalit 1 1 5
y cost

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 ASSIGNMENT PROBLEMS

The focus is how should the assignment be made in

order that the total cost involved is minimized (or the
total value is maximized when pay-offs are given in
terms of, say, profits).
Assignment of workers to machines, clerks to various
counters, salesmen to different sales areas, service
crews to different districts, are typical examples of
these.

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 ASSIGNMENT PROBLEMS

Example
Solve the assignment problem using HAM. The
information is reproduced in the following table
 

Worker Job
A B C

1 10 15 9
2 9 18 5
3 6 14 3
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 Solution Method

HUNGARIAN ASSIGNMENT METHOD (HAM)

Step 1: Row Reduction:
Locate the smallest cost element in each row of the cost
table. Now subtract this smallest from each element in
that row.
Step 1: Column Reduction:
In the reduced row table obtained, consider each column
and locate the smallest element in it. Subtract the
smallest value from every other entry in the column.
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 Procedures

Step 3: check the optimality

Draw the minimum number of horizontal or vertical
lines (not diagonal ones) that are required to cover the
entire ‘zero’ elements.
If the number of lines drawn is equal to n (the number of
rows/columns) the solution is optimal, and proceeds to
step 6. If the number of lines drawn is smallest than n,
go to step 4.

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 Procedures

Step 4: If the solution is not optimal,

Select the smallest uncovered (by the lines) cost
element. Subtract this element from all uncovered
elements including itself and add this element to each
value located at the intersection of any lines.
Step 5: Repeat steps 3 and 4 until an optimal solution is
obtained.

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 Procedures

Step 6:Given the optimal solution, make the job

assignments. This done as follows:
Locate a row/column which has only a single ‘zero’
element. Assign the job to its corresponding person.
Cross out the remaining zero’s, if any, in that
column/row.
Step 7: determine the optimal assignment:
Go to the original data and select the elements that has
already been assigned and then sum their values.
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 Example :
step 1:row reduction
 

Worker Job
A B C

1 1 6 0

2 4 13 0

3 3 11 0

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 Example :
step 2: column reduction
 

Worker Job
A B C

1 0 0 0

2 3 7 0

3 2 5 0

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 Example :
step 3: checking for optimality
 

Worker Job
A B C

0 0 2
1
1 5 0
2
0 3 0
3
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 Example :
step 4: if not optimal …
 

Worker Job
A B C

1 0 2

2
1 5 0

3 0 3

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 Example :
step 5: make an assignment if
the solution is optimal…
 

Worker Job
A B C

1
2
3
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