UNIT THREE

TRANSPORTATION
MODEL

1
 Transportation Problems Overview
 Part of a larger class of linear programming problems
known as network flow models.
 Possess special mathematical features that enabled
development of very efficient, unique solution methods.
 Methods are variations of traditional simplex procedure.
 One of the area of application of LPP is in the area of
physical distribution (transportation) of goods and
service from several origin to several demand
destination.

2
The structure of transportation problem involves a large
number of shipping routes from several supply origin to
several Demand destination.

The objective is to determine the number of units which

should be shipped from each origin to each destination in
order to satisfy the required quantity of goods or service at
each destination within the limited quantity of goods /service
available at each supply origin at the minimum transportation
cost and or time.
 The Transportation Model Characteristics
 A product is transported from a number of sources to a
number of destinations at the minimum possible cost.
 Each source is able to supply a fixed number of units of the
product, & each destination has a fixed demand for the product.
 The linear programming model has constraints for supply
at each source and demand at each destination.
 All constraints are equalities in a balanced transportation model
where supply equals demand.
 Constraints contain inequalities in unbalanced models where
supply does not equal demand.

4
Cont’d
The un balanced problem can be made balanced by adding a
dummy supply (row) or a dummy DD (column) as needed)
The number of decision variable are =n x m or number of row x
number of column.
And the number of constraints = row + column (m + n)
Any feasible solution for a transportation problem must have
exactly m + n-1 non- negative basic decision variables
(allocations) satisfy rim conditions.
When the number of positive allocation at any stage of the
feasible solution is less than the required number (row + column -
1) the solution is said to be degenerate otherwise non-degenerate.
 Cont’d
It is applied to minimize the total cost of transporting
homogenous commodity from supply origin to demand
destination .
It may be maximize value /utility of the product on the
way that profitable return can be maximized.
Supply origin- capacity center
Demand destination- requirement center
Cells in the transportation table having positive allocation
called occupied cells and others are empty/non-occupied
cells.
Transportation Model Example, Problem Definition and Data

Problem: How many tons of wheat to transport from each grain elevator to each
mill on a monthly basis in order to minimize the total cost of transportation ?
Data: Grain Elevator Supply Mill Demand
1. Asala 150 A. Mekelle 200
2. Desie 175 B. Nekempte 100
3. Hawassa 275 C. Harar 300
Total 600 tons Total 600 tons

Transport cost from Grain Elevator to Mill ($/ton)

Grain Elevator A. Mekelle B. Nekempte C. Harar
1. Asala $6 8 10
2. Desie 7 11 11
3. Hawassa 4 5 12

7
Transportation Model Example - Model Formulation

Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A +

5x3B + 12x3C
where xij = tons of wheat from
subject to x1A + x1B + x1C = 150
each grain elevator, i, i = 1, 2,
x2A + x2B + x2C = 175 3, to each mill j, j = A,B,C
x3A + x3B+ x3C = 275
x1A + x2A + x3A = 200
x1B + x2B + x3B = 100
x1C + x2C + x3C = 300
xij  0 8
 Solution of the Transportation Model Tableau
Format
 Transportation problems are solved manually within a tableau format.
 Each cell in a transportation tableau is analogous to a decision variable that
indicates the amount allocated from a source to a destination.

The Transportation
Tableau

9
 Transportation problem method
1. Formulate the problem & setup in matrix.
2. Obtain an initial basic solution
I. the solution must be feasible it must satisfy all the SS &
DD (rim)
II. The number of positive allocation must be equals to n+m-1
Any solution satisfy this requirement call non-degenerate
basic feasible solution
3. Test the initial solution for optimality
4. Update the solution- repeat step 3 until an optimal solution
is reached.
 Transportation Model Solution Methods
• Transportation models do not start at the origin where all decision
values are zero; they must instead be given an initial feasible
solution.
• Initial feasible solution determination methods include:
- northwest corner method
- minimum cell cost method
- Vogel’s Approximation Method
• Methods for solving the transportation problem itself include:
- stepping-stone method and
- modified distribution method.

11
North west method
1. start with the cell at the upper left corner of the transportation
matrix allocate as much as possible.
2. a) if allocation at step 1 is equals to the available supply then move
vertically down to cell (2,1)in the second row & the first column. &
apply step 1 again.
B)if allocation made in step 1 equals to demand of the first destination
then move horizontally to cell (1,2) apply step 1 again
C) if a1=b1 allocate x11 & move diagonally to the cell (2,2)
3. continue the procedure until an allocation made in the south east
corner cell of the table
 The Northwest Corner Method
In the northwest corner method the largest possible allocation is made to the cell in the upper left-hand
corner of the tableau , followed by allocations to adjacent feasible cells.

The Initial NW Corner

Solution

- The initial solution is complete when all rim requirements are satisfied.
- Transportation cost is computed by evaluating the objective function:
Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A + 5x3B + 12x3C = 6(150) + 8(0) + 10(0) + 7(50)
+ 11(100) + 11(25) + 4(0) + 5(0) + !2(275) = $5,925

13
 The Minimum Cell Cost Method Summary of Steps (LCM)

1. select the cell with the lowest unit cost in the entire
transportation table & allocate as much as possible to this cell &
eliminate in that row or column either SS or DD is exhausted.
 If two cell with equal weight is available select the cell with
maximum allocation is possible.
2. After adjusting SS &DD in non-crossed cells repeat the procedure
with the next lowest cost among the remaining rows & column.
3. Repeat the procedure until the entire available supply & demand is
satisfied.

14
 The Minimum Cell Cost Method (1 of 3)
- In the minimum cell cost method as much as possible is allocated to the cell with the
minimum cost followed by allocation to the feasible cell with minimum cost.

The Initial Minimum Cell Cost Allocation

The Second Minimum Cell Cost Allocation

15
 The Minimum Cell Cost Method
(2 of 3)

The- The complete initial minimum cell cost solution; total cost = $4,550.
- The minimum cell cost method will provide a solution with a lower cost than the northwest
corner solution because it considers cost in the allocation process.

16
e Initial Solution
 Vogel’s Approximation Method (VAM)
 VAM/ penalty is a heuristic method preferred to the above two
methods.
 Each allocation is made on the basis of the opportunity cost/
penalty that would have been incurred if allocation in certain cell
with minimum unit transportation cost were missed.
 Allocation is made so that the penalty cost is minimized.
 Method is based on the concept of penalty cost or regret.
 In VAM the first step is to develop a penalty cost for each source
and destination.
 Penalty cost is calculated by subtracting the minimum cell cost
from the next higher cell cost in each row and column.

17
 Steps in VAM
1. calculate the penalties each row & column by taking the difference
b/n the smallest & the next smallest unit transportation cost.
Penalty cost indicates the cost which has to be paid once fails to
allocate the cell with minimum cost.
2. select row or column with the largest penalties & allocate as much
as possible in the cell having the least cost in the selected row or
column; if there is a tie selecting the cell with maximum allocation
can be made.
3. adjust the SS & DD and cross out the satisfied row/column
4. Repeat step 1- 3 until the entire available supply & demand s are
satisfied.
 VAM cont’d

The VAM Penalty Costs

19
VAM allocates Vogel’s
as much as Approximation Methodcost
possible to the minimum (VAM)
cell in (2
theof 5)or column with
row
the largest penalty cost.

The Initial VAM

Allocation

20
 Vogel’s Approximation Method (VAM)
(3 of 5)
- After each VAM cell allocation, all row and column penalty costs are recomputed.

The Second
AM Allocation

21
 Vogel’s Approximation Method (VAM)
(4 of 5)
- Recomputed penalty costs after the third allocation.

The Third VAM

Allocation

22
 Vogel’s Approximation Method (VAM) (5 of 5)
- The initial
VAM solution; total cost = $5,125
VAM and minimum cell cost methods both provide better initial solutions than does the
northwest corner method.

The Initial VAM

Solution

23
 Test for optimality
Once the initial is obtained , the next step is to
check its optimality.
An optimal solution is the one where there is no
other set of transportation routes (allocation) that
will further reduce the total cost of transportation.
We have to evaluate each unoccupied cells in
terms of an opportunity of reducing total
transportation cost.

24
 The Stepping-Stone Solution Method
(1 of 12)
Once an initial solution is derived, the problem must be solved using either the stepping-
stone method or the modified distribution method (MODI).
The initial solution used as a starting point in this problem is the minimum cell cost method
solution because it had the minimum total cost of the three methods used.

The Minimum Cell

Cost Solution

25
 The Stepping-Stone Solution Method
Summary of Steps

1. Determine the stepping-stone paths and cost changes for

each empty cell in the tableau.
2. Allocate as much as possible to the empty cell with the
greatest net decrease in cost.
3. Repeat steps 1 and 2 until all empty cells have positive cost
changes that indicate an optimal solution.

26
 The Stepping-Stone Solution Method
(2 of 12)
The stepping-stone method determines if there is a cell with no
allocation that would reduce cost if used.

+1

The Allocation of One Ton to Cell 1A

27
 The Stepping-Stone Solution Method
(3 of 12)
- Must subtract one ton from another allocation along that row.

The Subtraction of
One Ton from
Cell 1B

28
 The Stepping-Stone Solution Method
(4 of 12)
- A requirement of this solution method is that units can only be added to and
subtracted from cells that already have allocations, thus one ton must be added to a
cell as shown.

The Addition of One

Ton to Cell 3B and the
Subtraction of One
Ton from Cell 3A

29
 The Stepping-Stone Solution Method
(5 of 12)
- An empty cell that will reduce cost is a potential entering variable.
- To evaluate the cost reduction potential of an empty cell, a closed path
connecting used cells to the empty cells is identified.

The Stepping-
Stone Path for
Cell 2A

30
 The Stepping-Stone Solution Method
(6 of 12)
The remaining stepping-stone paths and resulting computations for cells 2B and 3C.

The Stepping-Stone Path The Stepping-

for Cell 2B Stone Path for
Cell 3C

31
 The Stepping-Stone Solution Method
(7 of 12)
- After all empty cells are evaluated, the one with the greatest cost
reduction potential is the entering variable.
- A tie can be broken arbitrarily.

The Stepping-Stone
Path for Cell 1A

32
 The Stepping-Stone Solution Method
-(8 of 12)
When reallocating units to the entering variable (cell), the amount is the minimum
amount subtracted on the stepping-stone path.
At each iteration one variable enters and one leaves (just as in the simplex
method).

The Second Iteration of

the Stepping-Stone
Method

33
 The Stepping-Stone Solution Method
(9 of 12)
- Check to see if the solution is optimal.

The Stepping-Stone Path for

Cell 2A

The Stepping-
Stone Path for Cell
1B

34
The Stepping-Stone Solution Method
(10 of 12)
- Continuing check for optimality.

The Stepping-Stone
Path for Cell 2B

The Stepping-Stone
Path for Cell 3C

35
The Stepping-Stone Solution Method
(11 of 12)
 The stepping-stone process is repeated until none of the empty
cells will reduce costs
(i.e., an optimal solution).
 In example, evaluation of four paths indicates no cost reductions,
therefore Table 19 solution is optimal.
 Solution and total minimum cost :
x1A = 25 tons, x2C = 175 tons, x3A = 175 tons, x1C = 125 tons, x3B =
100 tons
Z = $6(25) + 8(0) + 10(125) + 7(0) + 11(0) + 11(175) + 4(175) +
5(100) + 12(0) = $4,525
36
 The Stepping-Stone Solution Method
(12 of 12)
A multiple optimal solution occurs when an empty cell has a cost change of zero and all
other empty cells are positive. An alternate optimal solution is determined by allocating to
the empty cell with a zero cost change. Alternate optimal total minimum cost also equals
$4,525.

The Alternative
Optimal Solution

37
 The Modified Distribution Method (MODI)
Steps

1. Develop an initial solution.

2. Compute the ui and vj values for each row and column.
Cji=Ui+Vj
3. Compute the cost change, kij, for each empty cell, compute the
opportunity cost.
Dji=Cij - (Ui+Vj)
4. Allocate as much as possible to the empty cell that will
result in the greatest net decrease in cost (most negative kij)
5. Repeat steps 2 through 4 until all kij values are positive or
zero.
38
 The Modified Distribution Method (MODI)
(1 of 6)

MODI is a modified version of the stepping-stone method in which math equations replace the
stepping-stone paths.
In the table, the extra left-hand column with the u i symbols and the extra top row with the vj
symbols represent values that must be computed.
- Computed for all cells with allocations :
ui + vj = cij = unit transportation cost for cell ij.

The Minimum Cell Cost

Initial Solution

39
 The Modified Distribution Method (MODI)
(2 of 6)

- Formulas for cells containing allocations:

x1B: u1 + vB = 8
x1C: u1 + vC = 10
x2C: u2 + vC = 11
x3A: u3 + vA = 4
x3B: u3 + vB = 5

The Initial Solution with All ui and vj Values

- Five equations with 6 unknowns, therefore let u 1 = 0 and solve to obtain:
vB = 8, vC = 10, u2 = 1, u3 = -3, vA= 7
40
 The Modified Distribution Method (MODI)
(3 of 6)

- Each MODI allocation replicates the stepping-stone allocation.

- Use following to evaluate all empty cells:
cij - ui - vj = kij
where kij equals the cost increase or decrease that would occur by allocating to a cell.
- For the empty cells in Table 26:
x1A: k1A = c1A - u1 - vA = 6 - 0 - 7 = -1
x2A: k2A = c2A - u2 - vA = 7 - 1 - 7 = -1
x2B: k2B = c2B - u2 - vB = 11- 1 - 8 = +2
x3C: k3C = c3C - u3 -vC = 12 - (-3) - 10 = +5

41
 The Modified Distribution Method (MODI) (4 of 6)
- After each allocation to an empty cell, the u i and vj values must be recomputed.

The Second Iteration of the MODI Solution Method

42
The Modified Distribution Method (MODI)(5 of 6)
- Recomputing ui and vj values:
x1A: u1 + vA = 6, vA = 6 x1C: u1 + vC = 10, vC = 10 x2C: u2 + vC = 11, u2 = 1
x3A: u3 + vA = 4, u3 = -2 x3B: u3 + vB = 5, vB = 7

The New ui and vj Values for the Second Iteration

43
 The Modified Distribution Method (MODI) (6 of 6)

- Cost changes for the empty cells, cij - ui - vj = kij;

x1B: k1B = c1B - u1 - vB = 8 - 0 - 7 = +1
x2A: k2A = c2A - u2 - vA = 7 - 1 - 6 = 0
x2B: k2B = c2B - u2 - vB = 11 - 1 -7 = +3
x3C: k2B = c2B - u3 - vC = 12 - (-2) - 10 = +4

- Since none of the values are negative, solution obtained is optimal.

- Cell 2A with a zero cost change indicates a multiple optimal solution.

44
 The Unbalanced Transportation Model
(1 of 2)
- When demand exceeds supply a dummy row is added to the tableau.

ced Model
d . Supply)

45
 The Unbalanced Transportation Model
(2 of 2)
- When supply exceeds demand, a dummy column is added to the tableau.
- The dummy column (or dummy row) has no effect on the initial solution methods or the
optimal solution methods.

An Unbalanced Model (Supply . Demand)

46
 Degeneracy
(1 of 3)

- In a transportation tableau with m rows and n columns, there must be m + n - 1 cells with
allocations; if not, it is degenerate.
- The tableau in the figure does not meet the condition since 3 + 3 -1 = 5 cells and there are
only 4 cells with allocations.

The Minimum Cell Cos

47
 Degeneracy
(2 of 3)

• In a degenerate tableau, all the stepping-stone

paths or MODI equations cannot be developed.
• To rectify a degenerate tableau, an empty cell
must artificially be treated as an occupied cell.

48
Cont’d

Degeneracy may happen at two stages;

◦ When obtaining an initial basic feasible solution
◦ At any stage while moving towards optimal solution.

49
Cont’d
To resolve degeneracy at the initial solution, we
proceed by allocating very small quantity close to
zero to one or more unoccupied cells so as to get
m+n-1 number of occupied cells.
In minimization transportation problems, it is
better to allocate ∆ to unoccupied cells that have
the lowest transportation costs whereas in
maximization problems it should be allocated to a
cell that has a high pay off value.

50
Example

51
 Degeneracy
(3 of 3)

- The stepping-stone path s and cost changes for this tableau:

2A 2C 1C 1A
x2A: 7 - 11 + 10 - 6 = 0
2B 2C 1C 1B
x2B: 11 - 11 + 10 - 8 = + 2
3B 1B 1A 3A
x3B: 5-8+6-4= -1
3C 1C 1A 3A
x3C: 12 - 10 + 6 - 4 = + 4

The Second Stepping-Stone Iteration

52
Cont’d
To resolve degeneracy which occurs during optimality test, the quantity
can be allocated to one or more cells which have become unoccupied
recently to have m+n-1 number of occupied cells in the new solution

53
 Prohibited Routes

- A prohibited route is assigned a large cost such as M.

- When the prohibited cell is evaluated, it will always
contain the cost M, which will keep it from being
selected as an entering variable.

54
Multiple optimal solution
Transportation problems may have multiple optimal
solutions.
This can be useful for the managers since it gives the
manager an option of bringing non quantitative
considerations in to account.
The existence of an alternate solution is evidenced by
an empty cell evaluation of zero.

55
 Maximization problems
Some transportation type problems concern profits
or revenues rather than costs.
In such cases, the objective is to maximize rather
than to minimize.
Such problems can be handled by adding one
additional step at the start: identify the cell with the
largest profit and subtract all the other cell profits
from the value.

56
Cont’d
Then replace the cell profits with the resulting
values.
These values represent the opportunity costs that
would be incurred by using routes with unit profits
that are less than the largest unit profit.
Replace the original unit profits by the newly
calculate opportunity costs and solve in the usual
way for the minimum opportunity cost solution.

57
Taking data from Example1, obtain Taking
an optimal
datasolution
from Example1,
by MODIobtain
method.
an optimal solution by MODI method.

Exercise

Taking the following data, obtain an optimal

solution by MODI method
D1 D2 D3 D4 Supply

S1 19 30 50 10 7
S2 70 30 40 60 9
S3 10 8 70 20 18
Demand 5 8 7 14 34

58
 CHAPTER FOUR

The Assignment Model

59
 The Assignment Model Characteristics
• Special form of linear programming model similar
to the transportation model.
• The objective is to assign a number of resources
to an equal number of activities so as to minimize
total cost, distance, time or maximize total profit.
•The problem of assignment arises b/c of varying degree
of efficiency of resource for performing d/t activities.
• In a balanced model resource equals activities.
• In an unbalanced model resource does not equal
activities.
60
 Cont’d
Typical assignment problem involves in situation made like:
Assigning job to machine
Assignment of workers to machine, tasks, activities, or project
Sales person to different sales territory
Classes to rooms etc.
Supply (availability) of each of the resource & Demand at each of
the destination is taken to be one.
Assignments are made in one-to one basis.
The optimal solution for the problem would be always be only one
assignment in a given row/column of the cost matrix.
Cont’d
 The applications need to be formulated in a way that
satisfies the following assumptions.
1. The number of assignees and the number of tasks
are the Equal. i.e the cost matrix should be square.
2. Each assignee is to be assigned to exactly one task.
3. Each task is to be performed by exactly one assignee.
4. There is a cost cij associated with assignee i (i 1, 2, . .
. ,n) performing task j (j 1, 2, . . . , n).
5. The objective is to determine how all n assignments
should be made to minimize the total cost.

62
The Assignment Model Example: Problem Definition
and Data

Problem: Assign four teams of officials to four games in a way that will
minimize total distance traveled by the officials. Supply is always one team of
officials, demand is for only one team of officials at each game.

63
The Assignment Model Example Problem Model
Formulation

Minimize Z = 210xAR + 90xAA + 180xAD + 160xAC + 100xBR + 70xBA + 130xBD + 200xBC +

175xCR + 105xCA + 140xCD + 170xCC + 80xDR + 65xDA + 105xDD +120xDC
subject to
xAR + xAA + xAD+ xAC = 1
xBR + xBA + xBD + xBC = 1
xCR + xCA+ xCD + xCC = 1
xDR + xDA + xDD + xDC = 1
xAR + xBR + xCR + xDR = 1
xAA + xBA + xCA + xDA = 1
xAD+ xBD + xCD + xDD = 1
xAC + xBC + xCC + xDC = 1
xij  0
64
Solution of the Assignment Model
(1 of 7)

- An assignment problem is a special form of the transportation problem

where all supply and demand values equal one.
- Example: assigning four teams of officials to four games in a way that will
minimize distance traveled by the officials.

65
The Travel Distances to Each Game for Each Team of Officials
 Solution of the Assignment Model Summary of Solution
Steps
1. Perform row reductions.
2. Perform column reductions.
3 In the completed opportunity cost table, cross out all zeros
using the minimum number of horizontal and/or vertical lines.
4. If fewer than m lines are required, subtract the minimum
uncrossed value from all other uncrossed values, and add the same
value to all cells where two lines intersect.
5. Leave all other values unchanged and repeat step 3.
6. If m lines are required, the tableau contains the optimal
solution. If fewer than m lines are required, repeat step 4.

66
Solution of the Assignment Model
(2 of 7)
- An opportunity cost table is developed by first subtracting the minimum
value in each row from all other row values (row reductions) and then
repeating this process for each column.

The Assignment Tableau with Row Reductions

67
 Cont’d

Opportunity cost shows the relative penalties

associated with assigning resources to an activity

opposed to making the best or least cost assignment.

Solution of the Assignment Model
(3 of 7)
- The minimum value in each column is subtracted from all column values (column
reductions).
- Assignments can be made in the table wherever a zero is present.
- An optimal solution results when each of the four teams can be assigned to a
different game.
- the Table below does not contain an optimal solution

The Tableau with Column Reductions

69
 Solution of the Assignment Model
(4 of 7)
-An optimal solution occurs when the number of independent
unique assignments equals the number of rows and columns.
- If the number of unique assignments is less than the number of
rows (or columns) a line test must be used.

The Opportunity Cost Table with the Line Test

70
 Heuristic ways to find minimum number of line

1. Choose any row or column with a single zero.

2. if it is a row, draw a line with the column the zero is in.

3. if it is column, draw a line through the row the zero is in.

4. Continue this fashion until all zeros are covered by the

line
 Solution of the Assignment Model
(5 of 7)

- In a line test all zeros are crossed out by horizontal and vertical lines; the
minimum uncrossed value is subtracted from all other uncrossed
values and added to values where two lines cross.

The Second Iteration

72
 Solution of the Assignment Model (6 of 7)
- At least four lines are required to cross out all zeros in table
- This indicates an optimal solution has been reached.
- Assignments and distances:
Assignment Distance Assignment Distance
Team A  Atlanta 90 Team A  Clemson 160
Team B  Raleigh 100 Team B  Atlanta 70
Team C  Durham 140 Team C  Durham 140
Team D  Clemson 120 Team D  Raleigh 80
Total 450 miles Total 450 miles
- If in initial assignment team A went to Clemson, result is the same; resulting
assignments represent multiple optimal solutions.

73
 Solution of the Assignment Model
(7 of 7)
- When supply exceeds demand, a dummy column is added to the tableau.
- When demand exceeds supply, a dummy row is added to the tableau.
- The addition of a dummy row or column does not affect the solution method.
- A prohibited assignment is given a large relative cost of M so that it will never be
selected.

An Unbalanced Assignment Tableau with a Dummy Column

74
Exercise: Make the optimal assignment of the following
typists to the appropriate jobs.

Job
Typist
P Q R S T

A 85 75 65 125 75

B 90 78 66 132 78

C 75 66 57 114 69

D 80 72 60 120 72

E 76 64 56 112 68

75
 20 10 0 60 10
24 12 0 66 12
18 9 0 57 12
20 12 0 60 12
20 8 0 56 12

2 2 0 4 0
6 4 0 10 2
0 1 0 1 2
2 4 0 4 2
2 0 0 0 2

76
END OF CHPTER 3 & 4