TRANSPORTATION

MODEL
ITP107/ISP110
QUANTITATIVE METHODS

2nd Semester
Academic Year 2021-2022
Engage: REARRANGE ME!

Directions: Rearrange the jumbled letters to form a word that is related to the
word “TRANSPORTATION”. Afterwards, give a brief description why the word is
connected to transportation.
•OSRCEU

•SOURCE
•IONNASTEDIT

•DESTINATION
•SPLYPU

•SUPPLY
•EDNADM

•DEMAND
•CTSO

•COST
•TEOUR

•ROUTE
•TTRRPOANS

•TRANSPORT
•IHSPPGIN

•SHIPPING
 • SOURCE
• DESTINATION
• SUPPLY
• DEMAND
• COST
• TRANSPORT
• SHIPPING
 Lesson 3.1. Basic Concepts of
Transportation Model

• It is a special procedure of linear

programming for finding the
minimum cost for distributing
homogenous units of a product from
several points of supply (origin) to a
number of points of demand
(destinations)
 THINGS TO CONSIDER > Transportation Model
• 1. number of sources and their capacity to
supply the products to distribute
• 2. number of destinations and their
demand
• 3. per-unit cost of shipping the products
from a certain source to a certain
destination
 Transportation Model

• TRANSPORTATION MODEL?
• LINEAR?
• LINEAR PROGRAMMING MODEL?
• WHY?
 Transportation Model

•The relationship among

variables is linear:
transportation costs are
treated as a direct linear
function of the number of
units shipped.
 ASSUMPTIONS > Transportation Model
• 1. the items to be shipped are homogenous.
• 2. shipping cost per unit is the same
regardless of the number of units shipped
• 3. there is only one route or mode of
transportation being used between each
origin and each destination
 Transportation Model
• It is a linear programming problem in
which a product is to be transported
from a number of sources to a number
of destinations at the minimum cost
(for minimization problem) or
maximum profit (maximization
problem).
 EXAMPLE >Transportation Model
• The WSS Company sells desktop
computers to IT companies in Warehouse Supply
Metro Manila, and ships them from 1 150
three distribution warehouses 2 200
located in three different areas. 3 50
The company is able to supply the Total 400
following numbers of desktop
computers to IT companies by the
beginning of the year:
 EXAMPLE >Transportation Model
• IT companies have IT Company Demand
ordered desktop AUS Link 100
computers that must be SJS Networking 80
delivered and installed Inc.
by the beginning of the RFS Data 220
Limited
year: Total 400
 EXAMPLE >Transportation Model
• The shipping costs per desktop computer from
each distributor to each company are as follows:
From At
A B C
1 7 5 9
2 10 12 10
3 6 3 14
 EXAMPLE >Transportation Model
• With cost minimization as criterion, WSS
Company wants to determine how many
desktop computers should be shipped
from each warehouse to each IT
company. Construct the linear
programming model.
 Lesson 3.2. METHODS IN ESTABLISHING
INITIAL AND OPTIMAL FEASIBLE SOLUTIONS
• A. Initial Feasible Solution
• B. Optimal Feasible Solution
 Lesson 3.2. METHODS IN ESTABLISHING
INITIAL AND OPTIMAL FEASIBLE SOLUTIONS
• A. Initial Feasible Solution
• 1. Northwest Corner Rule (NCR) –
procedure for obtaining an initial feasible
solution to a transportation model that
starts with allocating units to the upper
left corner and ends in the lower right
corner of any transportation problem
 Lesson 3.2. METHODS IN ESTABLISHING
INITIAL AND OPTIMAL FEASIBLE SOLUTIONS
• A. Initial Feasible Solution
• 2. Greedy Method or Minimum Cost
Method (MCM) – easy to use and provides
good (but not optimal) solution, it allocates
as much as possible to the least-cost/
highest profit cell
 Lesson 3.2. METHODS IN ESTABLISHING
INITIAL AND OPTIMAL FEASIBLE SOLUTIONS
• A. Initial Feasible Solution
• 3. Vogel’s Approximation Method – an
algorithm that finds an initial feasible
solution to a transportation problem by
considering the “penalty cost” of not using
the cheapest available route.
• It usually produces an optimal or near-
optimal starting solution.
 Lesson 3.2. METHODS IN ESTABLISHING
INITIAL AND OPTIMAL FEASIBLE SOLUTIONS
• B. Optimal Feasible Solution
• 1. Stepping Stone Method (SSM) –
procedure for determining if a solution to a
transportation problem is optimal that
involves tracing closed paths from each
unused square through stone squares
 Lesson 3.2. METHODS IN ESTABLISHING
INITIAL AND OPTIMAL FEASIBLE SOLUTIONS
• B. Optimal Feasible Solution
• 2. Modified Distribution Method (MODI)
– procedure for determining the per unit
cost/ profit change associated with
assigning flow to an unused square in the
transportation problem
GOD BLESS 