Transportation Model

2-1
TRANSPORTATION MODEL

 Requirements -
 List of origins and each one’s capacity.

 List of destinations and each one’s demand.

 Unit cost of shipping.

 Assumptions -
 Items to be shipped are homogeneous.

 Shipping cost per unit is the same.

 Only one route between origin and destination.

 Demand and supply is equal.

TRANSPORTATION MODEL SCENARIO

A
(demand)
1
(supply)
B
2
(demand)
(supply)

D
(demand)

3
(supply) C
(demand)
TRANSPORTATION PROBLEM
Cleveland
(200 units)
Des Moines
required
(100 units)
capacity

Albuquerque Boston
(300 units) Evansville
(200 units)
required (300 units)
required
capacity

Ft. Lauderdale
(300 units)
capacity
NORTH - WEST CORNER METHOD

• Start in the upper left-hand cell and allocate units to shipping

routes as follows:

– Exhaust the supply (factory capacity) of each row before moving

down to the next row.
– Exhaust the demand (warehouse) requirements of each column
before moving to the next column to the right.
– Check that all supply and demand requirements are met.
 NETWORK PRESENTATION
 Transportation problem can be represented as a network. Circles
represent origins and destinations, and the arcs between them
represent the decision variables, i.e. the amounts shipped.

Supply Demand
Origin Destination

100 D 5 A 300
4
3

8
300 E 4 B 200
3

9 7
300 F 5 C 200
 NORTH WEST CORNER METHOD: SAMPLE-1

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
(D)
Evansville 8 4 3
(E)
Ft Lauderdale 9 7 5
(F)
Warehouse
Req.
 NORTH WEST CORNER METHOD: SAMPLE-1

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines
100
(D)
Evansville 300
(E)
Ft Lauderdale 300
(F)
Warehouse
Req. 300 200 200 700
 TRANSPORTATION TABLE
NORTH WEST CORNER METHOD: SAMPLE-1
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
100
(D)
Evansville 8 4 3
300
(E)
Ft Lauderdale 9 7 5
300
(F)
Warehouse
Req. 300 200 200 700
 NORTH WEST CORNER METHOD: SAMPLE-1

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 3
200 100 300
(E)
Ft Lauderdale 9 7 5
100 200 300
(F)
Warehouse
Req. 300 200 200 700

Total = $4,200
 NORTH WEST CORNER METHOD: SAMPLE-2

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
(D) 400 100 500

Evansville 8 4 3
800 800
(E)
Ft Lauderdale 9 7 5
700 700
(F)
Warehouse
Req. 400 900 700 2000

Total Cost: 9,100

 LEAST COST METHOD

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
(D) 500 500

Evansville 8 4 3
600 200 800
(E)
Ft Lauderdale 9 7 5
400 300 700
(F)
Warehouse
Req. 400 900 700 2000

Total Cost: 10,200

 SOLVE THE FOLLOWING TRANSPORTATION TABLE USING
BOTH NWM AND LEAST COST METHOD
Warehouse
A B C D
Factory 4 7 7 1
150 Factory 1
1 can supply 100
units per
12 3 8 8 period
2 230

8 10 16 5 Total
3 180 supply
capacity
560 per
Demand 80 90 130 260 period
560
Warehouse B can use 90 Total demand
units per period
per period
 NETWORK PRESENTATION
 Transportation problem can be represented as a network. Circles
represent origins and destinations, and the arcs between them
represent the decision variables, i.e. the amounts shipped.

Supply Demand
Origin Destination

4
300 S1 D1 180
10
6

8
150 S2 16 D2 200
6

14 18

220 S3 10 D3 290
EXCEL TEMPLATE