Amity School of Business: BBA, Semester-III Operations Research Dr. Deepa Kapoor

Amity School of Business

BBA , Semester- III Operations Research Dr. Deepa Kapoor
The objective of the transportation problem is to transport various quantities of a single homogenous commodity, which are initially stored at various origins to various destinations in such a way that the total transportation cost is minimum
A transportation problem basically deals with the problem, which aims to find the best way to fulfill the demand of n demand points using the capacities of m supply points.
While trying to find the best way, generally a variable cost of shipping the product from one supply point to a demand point or a similar constraint should be taken into consideration.
Basic Feasible solution: A feasible solution to a m-origin, n-destination problem is said to be basic if the number of positive allocations are equal to (m+n-1). Feasible Solution: A set of positive individual allocations which simultaneously removes deficiencies is called a feasible solution. Optimal Solution: A feasible solution (not basically basic) is said to be optimal if it minimises the total transportation cost.
4
1 S o u r c e
1
c11
c21
Destination 2 . .
c12
c22
n
c1n
c2n
Supply
2
.
a1
a2
.
m
cm1 cm2 cmn
am
5
Demand
b1
b2
bn
General Description of a Transportation Problem

A set of m supply points from which a good is shipped. Supply point i can supply at most si units. A set of n demand points to which the good is shipped. Demand point j must receive at least di units of the shipped good.
Each unit produced at supply point i and shipped to demand point j incurs a variable cost of cij.
6
Methods for Finding Initial Solution

North West Corner Method (NWCM).
Least Cost Method (LCM).

Vogels Approximation Method (VAM).
Steps for North West Corner Method

Select the north west (upper left-hand) corner cell of the transportation table and allocate as many units as possible equal to the minimum between available supply and demand requirements, i.e., min (s1, d1). Adjust the supply and demand numbers in the respective rows and columns allocation.
8
If the supply for the first row is exhausted then move down to the first cell in the second row. If the demand for the first cell is satisfied then move horizontally to the next cell in the second column. If for any cell supply equals demand then the next allocation can be made in cell either in the next row or column. Continue the procedure until the total available quantity is fully allocated to the cells as required.
9
Example
From To
City 1 City 2 City 3
City 4
Supply
Plant 1
Plant 2 Plant 3 Demand
8
9 14 45
6
12 9 20
10
13 16 30
9
7 5 30
35
50 40 125
Transportation Tableau
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Solve using North West Corner Method

From To Warehouses
W1
Plant 1 Plant 2 Plant 3 Demand 21 17 32 6
W2
16 18 27 10
W3
25 14 18 12
W4
13 23 41 15
Supply
11 13 19 43
11
From
W1 W2
To Warehouse W3 W4 1
2
Availability
Plant 1
Plant 2
1
3
2
3
4
1
20
40
Plant 3 Plan 4
Requirement
4 5
20
2 3
40
5 6
30
9 10
10
20 20
100
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Vogels Approximation Method

The Vogel approximation method is an iterative procedure for computing a basic feasible solution of the transportation problem
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Steps for VAM

Step 1.Calculate penalties for each row/column by taking the difference between the smallest & next smallest unit transportation cost in the same row/column . (This difference is the extra cost which has to be paid if one fails to allocate to the cell with the minimum transportation cost.)
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Steps for VAM (Cont..)

Step 2 Select the row or column with the largest penalty & allocate as much as possible in the cell having the least cost in the selected row or column. If there is tie in the values of penalties, select the cell where max allocation can be made.
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Steps for VAM (Cont..)

Step 3 Adjust the supply & demand & cross out the satisfied row/column. If a row and a column are satisfied simultaneously, only one of them is crossed out & the remaining row or column is assigned zero supply or demand. Step 4 Repeat steps 1 to 3 till the entire supply and demand at various destinations are satisfied.
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Modified Distribution Method (MODI) (Optimality Test)

Step 1: Test for Degeneracy
Check whether m+n-1 = Number of Occupied Cells (Allocations in Initial Feasible Solution)
17
Modified Distribution Method (MODI) (Optimality Test)

Step 2 :- For an initial basic feasible solution with m+n-1 occupied cells, calculate u & vj for rows & columns. ( To start with, any one of us or vjs is assigned the value zero. It is better to assign zero for a particular u or vj , where there are maximum No of allocation in a row or column. Calculate us & vjs for other rows & columns by using the relation cj = u + vj
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Step 3 :- For unoccupied cells, calculate opportunity cost by using the following relationship:j = cj ( u + vj ), for all I & j.
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Step 3 :- Examine sign of j

If j is greater than 0, then current basic feasible solution is optimal. If j =0, then current basic feasible solution will remain unaffected but alternate solution exists. If one or more j are less than zero, then an improved solution can be obtained by entering unoccupied cell. An occupied cell having the largest negative value of j is chosen for entering into the solution mix.
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Step 4 :- Construct a closed path (or loop) for the unoccupied cell with largest negative opportunity cost.
(i) Start the closed path with the selected unoccupied cell and mark a plus sign(+) n this cell. (ii) Trace a path along the rows (or columns) to an occupied cell. (iii) Mark the corner with minus (-) sign & continue down the column (or row) to an occupied cell. (iv) Mark the corner with (+) & (-) signs alternatively. (v) Close the path back to the selected unoccupied cell.
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Step 5 :- Select the smallest quantity amongst the cells marked with minus sign on the corners of closed loop. Allocate this value to the selected unoccupied cell & add it to other occupied cells marked with plus signs & subtract it from the occupied cells marked with minus signs.
22
Step 6 :- Obtain a new improved solution by allocating units to the unoccupied cell according to Step 5 & calculate the new total transportation cost. Step 7 :- Test the revised solution further for optimality. The procure terminates when all j 0, for unoccupied cells.
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Find Initial Feasible Solution Using Amity School of Business VAM

From
W1 W2
To Warehouses W3 W4 25
14
Supply
Plant 1
Plant 2
21
17
16
18
13
23
11
13
Plant 3 Demand
32 6
27 10
18 12
41 15
19 43
24

From
X Y
To Market Z Available Stock 2

5
Warehouse1
Warehouse 2
5
3
10
7
100
25
Warehouse3 Demand
5 80
8 30
4 90
75 200
25

From
X Y
To Market Z Available Stock 4

8
Warehouse1
Warehouse 2
6
4
8
9
14
12
Warehouse3 Demand
1 6
2 10
6 15
5 31
26

From
D1 D2 D3
To
D4 Availability
Origin 1
Origin 2 Origin 3 Demand
19
70 40 5
30
30 8 8
50
40 70 7
10
60 20 14
7
9 18 34
27

From
W1 W2
To Warehouses W3 W4 17
14
Supply
Plant 1
Plant 2
11
16
13
18
14
10
250
300
Plant 3 Demand
21 200
24 225
13 275
10 250
400 950
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A company has 3 plants A,B and C and Business three Amity School of warehouses X,Y,Z. A number of units available at the plants is 60,70,80 and the demand at X,Y,Z are 50,80,80 respectively. The unit cost of the transportation is given in the following table: A B C X 8 3 11 Y 7 8 3 Z 3 9 5
Find the allocation so that total cost is minimum.
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Amity School of Business: BBA, Semester-III Operations Research Dr. Deepa Kapoor

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