TRANSPORTATION

PROBLEMS

WHAT IS TRANSPORTATION PROBLEM

The transportation problem is a special type of linear
programming problem where the objective is to minimise the
cost of distributing a product from a number of sources or
origins to a number of destinations. Because of its special
structure the usual simplex method is not suitable for solving
transportation problems. These problems require a special
method of solution.

The origin of a transportation problem is the location from
which shipments are despatched. The destination of a
transportation problem is the location to which shipments are
transported. The unit transportation cost is the cost of
transporting one unit of the consignment from an origin to a
destination. In the most general form, a transportation
problem has a number of origins and a number of destinations.
A certain amount of a particular consignment is available in
each origin. Likewise, each destination has a certain
requirement. The transportation problem indicates the amount
of consignment to be transported from various origins to
different destinations so that the total transportation cost is
minimised without violating the availability constraints and
the requirement constraints. The decision variables x ij of a
transportation problem indicate the amount to be transported
from the i th origin to the j th destination. Two subscripts are
necessary to describe these decision variables. A
transportation problem can be formulated as a linear
programming problem using decision variables with two
subscripts.


Example: A manager has four Factories (i.e. origins) and four
Warehouses (i.e. destinations). The quantities of goods
available in each factory, the requirements of goods in each
warehouse and the costs of transportation of a product from
each factory to each warehouse are given. His objective is to
ascertain the quantity to be transported from various factories
to different warehouses in such a way that the total
transportation cost is minimised.

Linear Program for the Transportation - Example

The Executive Furniture Corporation is faced with the
transportation problem shown in below. The company would
like to minimize the transportation costs while meeting the
demand at each destination and not exceeding the supply at
each source. In formulating this as a linear program, there are
three supply constraints (one for each source) and three
demand constraints (one for each destination). The decisions
to be made are the number of units to ship on each route, so
there is one decision variable for each arc (arrow) in the
network.



Developing an Initial Solution: Northwest Corner Rule


When the data have been arranged in tabular form, we must
establish an initial feasible solution to the problem. One
systematic procedure, known as the northwest corner rule,
requires that we start in the upper-left-hand cell (or northwest
corner) of the table and allocate units to shipping routes as
follows:




1. Exhaust the supply (factory capacity) at each row before
moving down to the next row.
2. Exhaust the (warehouse) requirements of each column
before moving to the right to thenext column.
3. Check that all supply and demands are met.

We can now use the northwest corner rule to find an initial
feasible solution to the Executive Furniture Corporation
problem shown in Table 2 below:

 Initial Solution

It takes five steps in this example to make the initial shipping
assignments (see Table 2):

1. Beginning the upper-left-hand corner, we assign 100
units from Des Moines to Albuquerque. This exhausts the
capacity or supply at the Des Moines factory. But it still
leaves the warehouse at Albuquerque 200 desks short.
Move down to the second row in the same column.
2. Assign 200 units from Evansville to Albuquerque. This
meets Albuquerque’s demand for a total of 300 desks. The
Evansville factory has 100 units remaining, so we move to
the right to the next column of the second row.
3. Assign 100 units from Evansville to Boston. The
Evansville supply has now been exhausted, but Boston’s
warehouse is still short by 100 desks. At this point, we
move down vertically in the Boston column to the next
row.
 4. Assign 100 units from Fort Lauderdale to Boston. This
shipment will fulfill Boston’s demand for a total of 200
units. We note, though, that the Fort Lauderdale factory
still has 200 units available that have not been shipped.
5. Assign 200 units from Fort Lauderdale to Cleveland. This
final move exhausts Cleveland’s demand and Fort
Lauderdale’s supply. This always happens with a
balanced problem. The initial shipment schedule is now
complete.

We can easily compute the cost of this shipping assignment:

This solution is feasible since demand and supply
constraints are all satisfied. It was also very quick and
easy to reach.