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CHAPTER 7 Transportation Problem

7.1 Introduction The transportation problem is one of the subclasses of LPPs in which the objective is to transport various quantities of a single homogeneous commodity that are initially stored at various origins to different destinations in such a way that the transportation cost is minimum. To achieve this objective we must know the amount and location of available supplies and the quantities demanded. In addition we must known the costs that result from transporting one unit of commodity from various origins to various destinations. Let m be the number of sources n be the number of destinations ai be the supply at the source i bj be the demand at the destination j cij be the cost of transportation per unit from source i to destination j Xij be the number of units to be transported from the source i to the destination j. The Linear programming model representing the transportation problem is given by Minimize Z = C ij X ij
i =1 j=1 m n

subject to the constraints

X
j=1

ij

a ij ,

i = 1, 2, 3....m

(Row Sum) and

X
i =1

ij

b ij ,

j = 1, 2, 3....n

(Column Sum)
X ij 0 for all i and j

The objective function minimizes the total cost of transportation (z) between various sources and destinations. The constraint i in the first set of constraints ensures that the total units transported from the source i is less than or equal to its supply. The constraint j in the second set of constraints ensures that the total units transported to the destination j is greater than or equal to its demand.

Fig. 7.1 Schematic Diagram of Simple Transportation Example 3.1 Consider the following transportation problem (Table 3.3) involving 3 sources and 3 destinations. Develop a linear programming (LP) model for this problem and solve it. The given transportation problem is said to be balanced if

ai = bj
i =1 j=1

ie. if the total supply is equal to the total demand. This restriction causes one of the constraints to be redundant (and hence it can be deleted) so that the problem will have (m + n 1) constraints and (m x n) unknowns. Note that a transportation problem will have a feasible solution only if the above restriction is satisfied. Thus,
m n

a i = b j is necessary as well as a sufficient condition for a transportation problem to have a

i =1 j=1

feasible solution. Problems that satisfy this condition are called balanced transportation problems. Techniques have been developed for solving balanced or standard transportation problems only. It follows that any non-standard problem in which the supplies and demands do not balance, must be converted to a standard transportation problem before it can be solved. This conversion can be achieved by the use of a dummy source/destination. The above information can be put in the form of a general matrix shown below:

TABLE 7.1 Cost Matrix of Transportation Problem Definitions

A few terms in connection with Transportation model are defined below

Feasible Solution Any set of non negative allocations ( X ij > 0 ) which satisfies the row and column sum

(rim requirement) is called a feasible solution.

Basic Feasible Solution A feasible solution is called a basic feasible solution if the number of non

negative allocations is equal to m+n-1 here m is the number of rows, n is the number of columns in a transportation table.
Non-degenerate Basic Feasible Solution

Any feasible solution to a transportation problem containing in origins and n destinations is said to be non-degenerate, if it contains m+n-1 occupied cells and each allocation is in independent positions. The allocations are said to be in independent positions, if it is impossible to form a closed path. Closed path means by allowing horizontal and vertical lines and all the corner cells are occupied.

Optimal Solution A feasible solution that minimizes (maximizes) that the transportation cost (profit) is

called an optimal solution. The solution of a transportation problem. can be obtained in two stages, namely initial solution and optimal solution. Initial solution can be obtained by using any one-of the three methods (i) North west corner rule (NWCR) (ii) Least cost method or Matrix minima method(LCM) (iii) Vogel's approximation method (VAM) VAM is preferred-over the other two methods, since the initial basic feasible solution obtained by this method is either optimal or very close to the optimal solution. The cells in the transportation table can be classified as occupied cells and unoccupied cells. The allocated cells in the transportation table is called occupied cells and empty cells in a transportation table is called unoccupied cells. The improved solution of the initial basic feasible solution is called optimal solution which is, the second stage of solution that can be obtained by MODI (modified distribution method). The allocations in the following tables are not in independent positions. * * * * * * * *

The allocations in the following tables are in independent positions. * * * * *

TABLE 7.2 Allocation of Different Possible Ways of Items

* *

* *

Degenerate Basic Feasible Solution If a basic feasible solution contains less than m+n-1 non negative

allocations, it is said to be degenerate.

Example 7.1 Consider the following transportation problem (Table 7.3) involving 3 sources and 3

destinations. Develop a linear programming (LP) model for this problem and solve it
Table 7.3 Example 7.1

Solution Let Xij be the number of units to be transported from the source i to the destination j, where i =

1, 2, 3 and j = 1, 2, 3. An LP model of this problem is: Minimize Z = 4X 11 + 5X 12 + 8X 31 + 6X 21 + 2X 22 + 8X 23 + 3X 31 + 7X 32 + 9X 33 subject to X 11 + X 12 + X 31 100 X 21 + X 22 + X 23 200 X 31 + X 32 + X 33 200 X 11 + X 21 + X 31 200 X 12 + X 22 + X 32 200 X 13 + X 23 + X 33 100 X ij 0, i = 1, 2, 3 and j = 1, 2, 3. Application of simplex method to the above LP model yields the optimal shipping plan as presented in Table 7.4.
Table 3.4 Optimal Shipping Plan (Example 3.1)

Source 1 2 3

Destination 3 2 1

Quantity shipped 100 200 200

Total minimum cost = Rs. 1800

7.2 TYPES OF TRANSPORTATION PROBLEM

The transportation problem can be classified into balanced transportation problem and unbalanced transportation problem.
7.2.1 Balanced Transportation Problem

If the sum of the supplies of all the sources is equal to the sum of the demands of all the destinations, then the problem is termed as balanced transportation problem. This may be represented by the relation:
m n

ai = bj
i =1 j=1

Example 3.1 represents a balanced transportation problem.

7.2.2 Unbalanced Transportation Problem

It is the sum of the supplies of all the sources is not equal to sum of the demands of all the destinations, then the problem is termed as unbalanced transportation problem. That means, for any unbalanced transportation problem, we have
m n

ai bj
i =1 j=1

Example 7.2 Convert the transportation problem shown in Table 7.5 into a balanced transportation

problem.
Table 7.5 Example 3.2

Solution For the given problem,

a i = 400, and
i =1

b
j=1 n j=1

= 500

Here,

a
i =1

bj

Hence it is an unbalanced transportation problem. Under this situation, an additional source or destination is to be included in the table as per the guidelines discussed now. If
m n

a i > b j , then include a dummy destination to absorb the excess supply. The demand of the
i =1 j=1

dummy destination is equal to assumed as zeros. If

n m

a i b j . The cost coefficients in the dummy destination are

i =1 j=1

b j > a i , then include a dummy source to supply the excess demand. The
j=1 i =1

supply of the dummy source is equal to assumed as zeros.

b a . The cost coefficients in the dummy source are

j=1 j i =1 i

Table 7.5 is modified by including a dummy source with a supply of 100 units. This is shown in Table 7.6, which is now a balanced transportation table.
Table 7.6 Balanced Transportation Problem (Example 3.2)

Example 7.3 Convert the transportation problem shown in Table 7.7 into a balanced transportation

problem.

Solution We have

a i = 500, and
i =1

b
j=1 m i =1 i

= 400
n

Here,

a > b
j=1

It is unbalanced transportation problem. This is converted into balanced transportation by including a dummy destination as shown in Table 7.8
TABLE 7.7 Example 7.3

TABLE 7.8 Balanced Transportation of Problem of Example 7.3

7.3 FINDING THE INITIAL BASIC SOLUTION

There are there method available to find initial feasible basic solution of transportation problem.
7.3.1. North West Corner Method(NWCM)

Algorithm for northwest corner cell method

Step 1: Find the minimum of the supply and demand values with respect to the current northwest corner

cell of the cost matrix.

Step 2: Allocate this minimum value to the current northwest corner cell and subtract this minimum

from the supply and demand values with respect to the current northwest corner cell.
Step 3: Check whether exactly one of the row/column corresponding to the northwest comer cell

has zero supply/demand, respectively. If so, go to step 4 otherwise, go to step 5.

Step 4: Delete that row/column with respect to the current northwest corner cell which has the zero

supply/demand and go to step 6.

Step 5: Delete both the row and the column with respect to the current northwest corner cell. Step 6:

Check whether exactly one row or column is left out. If yes, go to step 7 otherwise go to step 1.
Step 7: Match the supply/demand of that row/column with the remaining demands/supplies of the

undeleted columns/rows.
EXAMPLE 7.4

The application of the procedure to the model of example 7.1gives the starting basic solution in Table 7.9. The arrows show that the order in which the allocated amounts are generated.
TABLE 7.9 Starting Basic Solution of Example 7.1

The starting basic solution is given as X 11 = 100, X 21 = 100, X 22 = 100, X 32 = 100, X 33 = 100, The associated cost of the schedule as

Z = 4 100 + 6 100 + 2 100 + 7 100 + 9 100 = Rs. 2800

EXAMPLE 7.5

Obtain the initial basic feasible solution of transportation problem using North West Corner Method, whose cost and rim requirement is given in Table 7.10.

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TABLE 7.10 Cost Matrix of Example 7.5

Source/Destination

D1 2 3 5 1 7

D2 7 3 4 6 9

D3 4 1 7 2 18

Supply 5 8 7 14 34

O1 O2 O3 O4 Demand

TABLE 7.11 Initial Basic Feasible Solution of Example 7.5

The starting basic solution is given as X 11 = 5, X 21 = 2, X 22 = 6, X 32 = 2, X 33 = 4, X 43 = 14, The associated cost of the schedule as

Z = 2 5 + 3 2 + 3 6 + 4 3 + 7 4 + 2 14 = Rs.102.
7.3.2 Algorithm for Least Cost Cell Method(LCM) Step 1: Find the minimum of the (undeleted) values in the cost matrix (i.e. find the matrix minimum). Step 2: Find the minimum of the supply and demand values (X) with respect to the cell corresponding to

the matrix minimum.

Step 3: Allocate X units to the cell with the matrix minimum. Also, subtract X units from the supply and

the demand values corresponding to the cell with the matrix minimum.

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Step 4: Check whether exactly one of the row/column corresponding to the cell with the matrix

minimum has zero supply/zero demand, respectively. If yes, go to step 5 otherwise, go to step 6.
Step 5: Delete that row/column with respect to the cell with the matrix minimum which has the zero

supply/zero demand and go to step 7.

Step 6: Delete both the row and the column with respect to the cell with the matrix minimum. Step 7: Check whether exactly one row or column is left out. If yes, go to step 8 otherwise, go to step 1. Step 8: Match the supply/demand of that row/column with the remaining demands/supplies of the

undeleted columns/rows.
EXAMPLE 7.6

The least-cost method is applied to Example 7.1 in the following manner: 1. Cell (2, 2) has the least unit cost in the tableau (= Rs. 2). The most that can be shipped through (2, 2) is X22 = 200 truckloads, which happens to satisfy both row 2 and column 2 simultaneously. We arbitrarily cross out column 2 and adjust the supply in row 2 to 0. 2. Cell (3, 1) has the smallest uncrossed-out unit cost (=Rs. 3). Assign X31 = 200, cross out column 1 and adjust the supply in row 3 to 0. 3. Continuing in the same manner, we successively assign 100 truckloads to cell (1, 3), 0 truckloads to cell (1, 3). The resulting starting solution is summarized in Table 7.12. The arrows show the order in which the allocations are made. The starting solution (consisting of 3 basic variables) is
TABLE 7.12 Starting Basic Solution of Example 7.5

The starting basic solution is given as X 22 = 200, X 31 = 200, X 13 = 100,

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The associated cost of the schedule as

Z = 3 200 + 2 200 + 8 100 = Rs.1800 The quality of the least-cost starting solution is better than that of the northwest-corner method (Example 7.5) because it yields a smaller value of Z (Rs. 83 versus Rs. 102 in the northwest-corner method).
EXAMPLE 7.7

Obtain the initial basic feasible solution of transportation problem using Least Cost Cell Method, whose cost and rim requirement is given in Table 7.10.
TABLE 7.13 Starting Basic Solution of Example 7.5

The least-cost method is applied to Example 7.5 in the following manner: 1. Cell (4,1) has the least unit cost in the tableau (= Rs. 1). The most that can be shipped through (4,1) is X41 = 7 truckloads, cross out column 1becuase it is satisfied, and adjust the supply in row 4 to 14 7= 7. 2. Cell (3, 1) has the smallest uncrossed-out unit cost (=Rs. 2). Assign X43 = 7, cross out row 4 and adjust the supply in column 3 to 18-7= 11. 3. Continuing in the same manner, we successively assign 7 truckloads to cell (3,2), 3 truckloads to cell (1, 3) and 2 truckloads to cell (1, 2). The resulting starting solution is summarized in Table 7.13. The arrows show the order in which the allocations are made. The starting solution is The starting basic solution is given as

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X 12 = 2, X 13 = 3, X 23 = 8, X 32 = 7, X 41 = 7, X 43 = 7, The associated cost of the schedule as Z = 7 2 + 4 3 + 1 8 + 4 7 + 1 7 + 2 7 = Rs.83 The quality of the least-cost starting solution is better than that of the northwest-corner method (Example 7.5) because it yields a smaller value of Z (Rs. 1800 versus Rs. 2800 in the northwest-corner method).
7.3.3 Vogel's Approximation Method (VAM)

The steps involved in this method for finding the initial solution are as follows.
Step 1 Find the penalty cost, naively the difference between the smallest and next smallest costs in each

row and column.

Step 2 Among the penalties as found in step(l) choose the maximum penalty. If this maximum penalty is

more than one (i.e if there is a tie) choose any one arbitrarily.
Step 3 In the selected row or column as by step(2) find out the cell having the least cost. Allocate to this

cell as much as possible depending on the capacity and requirements.

Step 4 Delete the row or column which is fully exhausted. Again compute the column and row penalties

for the reduced transportation table and then go to step (2). Repeat the procedure until all the rim requirements are satisfied.
Note If the column is exhausted, then there is a change in row penalty and vice versa. EXAMPLE 7.8

Vogels Approximation Method is applied to Example 7.1, Table 7.3

TABLE 7.14 Starting Basic Solution of Example 7.1

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Row 2 and 3 have largest penalty (=4) and cell (2,2) has the smallest unit cost in that row, the amount 200 is assigned to X22. Column 2 and row 2 are satisfied and must be cross out. Next new penalties are calculated as in Table 7.15.
TABLE 7.15 First Iteration of VAM for Example 7.1

Table 7.15 shows the row 3 has the highest penalty (= 6) and cell (3,1) has the smallest unit cost in that row, the amount 200 is assigned to X31. Column 2 and row 3 are satisfied and must be cross out. Next new penalties are calculated as in Table 7.16.
TABLE 7.16 Second Iteration of VAM for Example 7.1

Table 7.16 shows only one is remaining in the cell (1,3), the amount 100 units is assigned. Now column 3 also satisfied as shown in Table 7.17.
TABLE 7.17 Final Iteration of VAM for Example 7.1

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The Associated cost of the schedule as Z = 3 200 + 2 200 + 8 100 = Rs.1800

EXAMPLE 7.9

Vogels Approximation Method is applied to Example 7.5, Table 7.10

TABLE 7.18 First Iteration of VAM for Example 7.5

In Table 7.18, row penalties and column penalties are computed. The maximum of these penalties is 2 which occur in rows 1 and 2. Hence, the cell with the least cost in these rows are to be identified. This occurs at the cell (2, 3). The supply and the demand values corresponding to the cell (2, 3) are 8 and 18, respectively. The minimum of these values is 8. Thus 8 units are allocated to the cell (2, 3) and the same is subtracted from the supply and demand values of the cell (2, 3). In this process, the demand at the source 2 is fully satisfied. Hence, this row is highlighted and the resultant data is shown in Table 7.19.

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TABLE 7.19 Second Iteration of VAM for Example 7.5

Since a row has been deleted, it is important to revise the row penalties as shown in Table 7.19. The maximum of these penalties is 5 which occur in rows 1 and 4. Therefore, the cell with the least cost is identified in row 4. This occurs at the cell (4,1). The supply and the demand values corresponding to the cell (4,1) are 14 and 7 respectively. The minimum of these values is 7. The supply at the source 4 is fully satisfied. Hence, this row is highlighted and the resultant data is shown in Table 7.20.

TABLE 7.19 Second Iteration of VAM for Example 7.5

7.4.2 Optimizing the Basic Feasible Solution Applying U-V Method

Step 1: Row 1, row 2,..., row m of the cost matrix are assigned with variables U1, L,1 ... I U1111 respectively and the column 1, column 2,..., column n are assigned with variables V1, V,,.... V, respectively. Sri p 2 Check whether the number of basic cells in the set of initial basic feasible solution is equal to m

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+ n 1. If yes, go to step 4, otherwise, go to step 3. Step 3 Convert the necessary number of non-basic cells into basic cells to satisfy the condition stated in step 2 (while doing this, sufficient care should be taken such that there is no closed loop formation with the inclusion of the new basic cell(s)). The concept of the closed loop is explained in step 8. Step 4: Compute the values for U,, U,_,..., U,,,, and V1, I 2 to all the basic cells only. U1 + Vi Cii (assume U, = 0) Step 5: Compute penalties Pij for the non-basic cells by using the formula: P'j = Uj -+- Vi cjj Step 6: Check whether all P;j values are less than or equal to zero. If yes, go to step 12, otherwise, go to step 7. Step T Identify the non-basic cell which has the maximum positive penalty, and term that cell as the new basic cell. Step 8: Starting from the new cell, draw a closed loop consisting of only horizontal and vertical lines passing through some basic cells. (Note: Change of direction of the loop should be with 90 degrees only at some basic cell.) Step 9: Starting from the new basic cell, alternatively assign positive (+) and negative () signs at the corners of the closed loop. Step 10: Find the minimum of the allocations made amongst the negatively signed cells. Step 11: Obtain the table for the next iteration by doing the following steps and then go to step 2. (i) Add the minimum allocation obtained in the previous step to all the positively signed cells and subtract minimum allocation from all the negatively signed cells and then treat the net allocations as the allocations in the corresponding cells of the next iteration. (ii) Copy the allocations which are on the closed loop but not at the corner points of the closed loop, as well as the allocations which are not on the loop as such without any modifications to the corresponding cells of the next iteration. Step 12. The optimality is reached. Treat the present allocations to the set of basic cells as the optimum allocations. Step 13. Stop.
Step 1 Starting with the cell at the upper left corner (North west) of the transportation matrix we allocate

V,, by applying the following formula

as much as possible so that either the capacity of the first row is exhausted or the destination requirement

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of the first column is satisfied i.e., X i1 = min(a 1 , b1 ).

Step 2 If b1 > a 1 , we move down vertically to the second row and make the second allocation of

magnitude X 22 = min(a 2 , b1 X i1 ), in the cell (2, 1) If b1 > a 1 , move right horizontally to the second column and make the second allocation of magnitude
X 12 = min(a 1 , X i1 b1 ), in the cell (1, 2)

If b1 = a 1 b, there is a tie for the second allocation. We make the second allocations of magnitude
X 12 = min(a 1 a 1 , b1 ) = 0 in cell (1,2)

or X 21 = min(a 2 , b1 b1 ) = 0 in the cell (2,1)

Step 3 Repeat steps I and 2 moving down towards the lower right corner of the transportation table until

all the rim requirements are satisfied.

Example Obtain the initial basic feasible solution of a transportation problem whose cost and rim

requirement table is given below. Origin\Destination O1 O2 O3 O4 Demand

Example

D1 2 3 5 1 7

D2 7 3 4 6 9

D3 4 1 7 2 18

Supply 5 8 7 14 34

Determine an initial basic Feasible solution to the following transportation problem using Origin/Ds O1 O2 O3 Required D1 6 8 4 6 D2 4 9 3 10 D3 1 2 6 15 D4 5 7 2 4 Supply 14 16 5 35

N.W.C.R

Least Cost-or Matrix Minima Method Step 1 Determine the smallest cost in the cost matrix of the transportation table.

Let it be C ij . Allocate X ij = min(a 1 , b1 ). in the cell (i, j)

Step 2 If X ij = a i cross off the ith row of the transportation table and decrease bj by ai. Then go to step3.

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If X ij = b j cross off the jth column of the transportation table and decrease ai by bj. Go to step3. If X ij = a i = b j cross off either the ith row or the jth column but not both.
Step 3 Repeat steps 1 and 2 for the resulting reduced transportation table untill all the rim requirements

are satisfied. Whenever the minimum cost is not unique, make an arbitrary choice among the minima.
Example Obtain an initial feasible solution to the following TP using Matrix Minima Method.

Origin/Des O1 O2 O3 Demand

D1 1 4 0 4

D2 2 3 2 6

D3 3 2 2 8

D4 4 0 1 6

Supply 6 8 10 24

Example Determine an initial basic feasible solution for the following TP, using least cost method

Origin/des 01 02 03 Demand .

D1 1 8 4 6

D2 6 9 3 10

D3 5 2 6 15

D4 3 7 2 4

Supply 14 16 5 35

Example Find the initial basic feasible solution for the following transportation problem by VAM.

D1 O1 O2 O3 Demand 11 16 21 200

D2 13 18 24 225

D3 17 14 13 275

D4 14 10 10 250

Supply 250 300 400 950

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Transportation Problems 1. Obtain the initial solution for the following TP using (i) NWCR (ii) Least cost method (iii) VAM Destination A B C Supply 1 2 7 4 5 2 3 3 1 8 3 5 4 7 7 4 1 6 2 14 34 Demand 7 9 18

2. Solve the following TP where the cell entries denote the unit transportation costs. Destination A B C D Supply P 5 4 2 6 20 Q 8 3 5 7 30 R 5 9 4 6 50 Demand 10 40 20 30 100

Source

3. Solve the following transportation problem. Destination 1 2 3 1 2 2 3 2 4 1 2 3 1 3 1

Source

Origin

Capacity 10 15 40

Demand

20 15 30

Factory

4. Find the minimum transportation cost. Warehouse D1 D2 D3 F1 19 30 50 F2 70 30 40 F3 40 8 70 Demand 5 8 7

D4 10 60 30 14

Supply 7 9 18

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5. Solve the following T.P. using Vogels Method. Warehouse A B C D 1 9 12 9 6 2 7 3 7 7 3 6 5 9 11 4 6 8 11 2 Re quire min t 4 4 6 2 6. Solve the following T.P. Destination A B 1 1 2 2 4 3 3 0 2 Demand 4 6 C 3 2 2 8
Factory

E F Available 9 10 5 5 5 6 3 11 2 2 10 9 4 2

D Supply 4 6 0 8 1 10 6

7. Solve the following T.P. Destination A B 1 11 20 2 21 16 3 8 12 Demand 30 25 C D Supply 7 8 50 20 12 40 8 9 70 35 40

Source

8. Solve the following T.P to maximize the profit. Destination A B C D Supply 1 40 25 22 33 100 2 44 35 30 30 30 3 38 38 28 30 70 Demand 40 20 60 30

Source

Source

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9.Four factories A, B, C and D are required to manufacture and supply a specific product for four stores P, Q, R and S. Production capacities in each factory and demand at each store are given in table 1 below, while Unit transportation cost in Rupees from each factory to each store is given in table 2.
Table 1

Factory Production capacity (units) Store Demand Store (units) A B Factory C D P 2 10 13 4 Q 4 8 3 6

A 50 P R25 8 7 9 8

B 70 Q S 35 11 5 12 3

C 30 R 105

D 50 S 35

Table 2

(i) Construct this as a standard Transportation problem in tabular form. (ii)Using any appropriate method, determine the optimum transportation schedule and the corresponding transportation cost.

10. The following table gives the cost of transporting material from supply points A, B, C and D to demand points E, F, G, H and J.

Supply

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A B C D Demand

8 15 14 13 90

10 13 20 19

12 18 6 7

17 15 11 10 6 9 13 12

100 150 180 280

170 50

210 190

The present allocation is as follows: A to E 90, A to F 10, B to F 150, C to F 10, C to G 50, C to J 120, D to H 210, D to J 70. (a) Check the allocation is optimum, if not find an optimum schedule. (b) If in the above problem the transportation cost from A to G is reduced to 10, what will be the new optimum schedule?. (c) If the availability of supply point A is reduced by 10 units, use each of the following criteria to obtain a initial basic feasible solution: (i) (ii) Northwest corner rule Least cost method

(d) Starting with best initial solution is found in part (c), obtain an optimal solution, and hence produce transportation schedule.

11.Consider a transportation problem involving 3 sources and 3 destinations. Find minimum transportation cost. Source Destination 1 2 3 20 10 15 10 25 200 12 30 400 9 18 400 Supply 200 300 500 1000

1 2 3

Demand

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12. Find minimum transport cost of the following

Destinations

1
Sources S1 S2 S3 S4 Demand

2 2 6 3 5 20 3 5 4 7 30

Supply

3 5 1 2 20

25 15 20 10