Optimization Theory PDF

OPTIMIZATION THEORY
ASSIGNMENT OF AL-MATHS
(OPTIMIZATION Theory)
BSC (HONS) 2018 - 2022
SEMSTER 4
SUBMITTED TO: MAAM RIDA SAYYED
SUBMITTED BY: HIRA NAEEM
ROLL NUMBER: 1518-BH-STAT-18
SECTION : B2
pg. 1
OPTIMIZATION THEORY
CONTENT
TRANSPORTATION MODEL IN LINEAR PROGRAMMING
BRIEF HISTORY OF TRANSPORTATION MODEL
CLASSIFYING BY THEIR OBJECTIVE
WHAT IS TRANSPORTATION MODEL?
MATHEMATICAL FORMULATION
TYPES OF TRANSPORTATION MIDEL
(A) BALANCED TRANSPORTATION MODEL (B) UNBALANCED TRANSPORTATION PROBLEM
HOW TO BALANCE TRANSPORTATION PROBLEM?
AIM OF TRANSPORTATION MODEL
SIMPLEX NETWORK REPRESENTATION
CHARACTERISTICS OF TRANSPORTATION MODEL
APPLICATIONS OF TRANSPORTATION MODEL
PHASES OF SOLUTION OF TRANSPORTATION MODEL
(A) INITIAL BASIC FEASIBLE SOLUTION. (B) OBTAIN OPTIMAL BASIC SOLUTION
HOW TO SOLVE THE TRANSPORTATION MODEL?
PHASE 1
(A) NORTH WEST CORNER METHOD
WHAT IS NORTH WEST CORNER METHOD?
STEPS TO SOLVE NORTH WEST CORNER METHOD
EXAMPLES
pg. 2
OPTIMIZATION THEORY
(A) BALANCED NORTH WEST CORNER Method (B) UNBALANCED NORTHWEST CORNER
METHOD
ADVANTAGES OF NORTH WEST CORNER
DISADVANTAGES OF NORTH WEST CORNER
(B) LEAST COST METHOD

WHAT IS LEAST COST METHOD?
STEPS TO SOLVE LEAST COST METHOD
EXAMPLES
(A) BALANCED LEAST COST METHOD. (B) UNBALANCED LEAST COST METHOD
WHERE IT IS USED?
LIVE EXAMPLES
ADVANTAGES OF LEAST COST METHOD
DISADVANTAGES OF LEAST COST METHOD
(C) VOGEL'S APPROXIMATION METHOD

WHAT IS VOGEL'S METHOD?
WHY VOGEL METHOD IS THE BEST?
WHAT IS PENALTY IN VOGEL METHOD?
ALGORITHM
EXAMPLES
(A) BALANCED VOGELS METHOD (B) UNBALANCED VOGELS METHOD
ADVANTAGES
DISADVANTAGES
pg. 3
OPTIMIZATION THEORY
PHASE 2
MODI'S APPROACH
INTRODUCTION
ALGORITHM
EXAMPLE
DIFFERENT CASES IN TRANSPORTATION MODEL
CONCLUSION
ASSIGNMENT MODEL
WHAT IS ASSIGNMENT MODEL?
EXAMPLES OF ASSIGNMENT MODEL
TYPES OF ASSIGNMENT MODEL
OBJECTIVE OF ASSIGNMENT MODEL
APPLICATIONS OF ASSIGNMENT MODEL
APPROACH OF ASSIGNMENT MODEL
METHOD ADAPTION TO SOLVE ASSIGNMENT MODEL
HOW TO SOLVE ASSIGNMENT MODEL?
EXAMPLES
(A) BOUNDED ASSIGNMENT MODEL (B) UNBOUNDED ASSIGNMENT MODEL
MAXIMIZATION CASE IN ASSIGNMENT MODEL
MULTIPLE OPTIMAL SOLUTIONS IN ASSIGNMENT MODEL
pg. 4
OPTIMIZATION THEORY
TRANSPORTATION MODEL IN LINEAR PROGRAMMING
BRIEF HISTORY OF TRANSPORTATION MODEL

The optimal scheduling is as old as transportation systems, established in some European and
American cities during the 19th century using horse-drawn coaches.
From the very first moment, the managers of those businesses faced the problem of scheduling
their services, because a better planning of coaches, drivers and horses could bring great profit.
Usually, the scheduling problems in transportation are considered as problems of multi-

objective combinatorial optimization:
– Multi-objective: the quality of the solutions depends on many different objectives or criteria.
– Combinatorial: the quantity of possible solutions is normally considered finite (although very
large).
– Optimization: the best possible solution is sought.
The theoretical basis of the multi-objective combinatorial optimization is the theory of the
economic equilibrium, commonly attributed to the famous work “The Wealth of Nations” by
Adam Smith, written in 1776.
The works of Edgeworth and Pareto at the end of the 19th century about the theory of utility,
welfare and equilibrium are regarded as the origin of the meaning given to optimization
nowadays. The Pareto optimality is described as a situation in which consumers and producers
cannot increase their satisfaction without decreasing the satisfaction of the other part.
Another essential milestone in the origins of the multi-objective optimization is the creation of
the game theory and the notion of strategy. Already in the 20th century, John von Neumann
and Oskar Morgernstern mentioned in their work “Theory of Games and Economic Behavior”
that they had faced an optimization problem in economics which was “a curious and puzzling
mix of various problems in conflict with each other” and which could not be solved using the
classical mathematical methods for optimization.
Last, the concept of vector maximum problem introduced by Kuhn and Tucker (1951) meant
the beginning of the multi-objective optimization as a new mathematical discipline.
pg. 5
OPTIMIZATION THEORY
New challenges
Nowadays, multi-objective optimization is applied to a great deal of domains, such as
● Biology, for many analysis of DNA sequences;

● Inorganic chemistry, in the synthesis of compounds which must have specific properties;
● In engineering, to analyze and enhance systems like water pipes and electrical networks,
and of course, in the optimal scheduling of transportation systems: in this field, GOAL
SYSTEMS is a world leader, always researching and innovating in order to obtain the
most satisfaction of users and employees with the minimal costs for the clients.
CLASSIFYING THE TRANSPORTATION MODEL BY THEIR OBJECTIVE

MINIMIZING OBJECTIVE
Transportation Problems whose main objective is to MINIMIZE THE COST of shipping goods are
called Minimization Transportation Model.
MAXIMIZATION OBJECTIVE
Transportation Problems whose main objective is to MAXIMIZE THE PROFIT of shipping goods
are called Maximization Transportation Model.
WHAT IS TRANSPORTATION MODEL?

Introduction
Consider a commodity which is produced at various centers called SOURCES and is demanded at
various other DESTINATIONS. The production capacity of each source (availability) and the
requirement of each destination are known and fixed.
The cost of transporting one unit of the commodity from each source to each destination is also
known. The commodity is to be transported from various sources to different destinations in such
a way that the requirement of each destination is satisfied and at the same time the total cost of
transportation in minimized.
This optimum allocation of the commodity from various sources to different destinations is
called TRANSPORTATION PROBLEM.
pg. 6
OPTIMIZATION THEORY
Transportation models deals with the transportation of a product manufactured at different

plants or factories (supply origins) to a number of different warehouses (demand destinations).
A typical transportation problem contains
Inputs:
Sources with availability
Destinations with requirements
Unit cost of transportation from various sources to destinations
Objective:
To determine schedule of transportation to minimize total transportation cost.
pg. 7
OPTIMIZATION THEORY
TYPES OF TRANSPORTATION MODEL

(A) BALANCED TRANSPORTATION MODEL
When the total number of Supply is as same as Total number of Demand, then it is known as
Balanced Transportation Model.
(B) UNBALANCED TRANSPORTATION MODEL
When the Total number of Supply is not as same as Total number of Deamad, then it is known
as Unbalanced Transportation Model.
HOW TO BALANCE THE TRANSPORTATION MODEL?

DUMMY COLUMN
When supply is more than demand, then we add the dummy column of demand by taking the
cost zero in each entry is called Dummy Column.
Supply will remain same.
DUMMY ROW
When Demand is more than Supply, then we add the dummy row of supply by taking the cost
zero in each entry is called Dummy Row.
AIM OF TRANSPORTATION MODEL

To Find out the optimum transportation schedule by keeping in mind that the cost must have to
be minimized.
SIMPLEX NETWORK REPRESENTATION

Because of the special structure, the usual simplex method is not suitable for solving the
transportation problems. It requires special methods of solution.
pg. 8
OPTIMIZATION THEORY
To describe the model following notations are to be used:
m Total number of sources/origins.
n Total number of destinations.

Sm Amount of supply at source i.
dn Amount of demand at destination j.
cij Unit transportation cost from source i to destination j.
xij Amount to be shipped from source i to destination j.
CHARACTERISTICS OF TRANSPORTATION MODEL

• A product is to be 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, and 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 constraintsare equalities in a balanced transportation model where supply equals demand.
• Constraints contain inequalities in unbalanced models where supply is not equal to demand.
pg. 9
OPTIMIZATION THEORY
APPLICATIONS OF TRANSPORTATION MODEL

MILITARY DISTRIBUTION SYSTEM
Military applications include the problem of selecting an air weapon system against enemy so
as to keep them pinned down and at the same time minimising the amount of aviation gasoline
used.
A variation of the transportation problem that maximises the total tonnage of bombs dropped
on a set of targets and the problem of community defence against disaster, the solution of
which yields the number of defence units that should be used in a given attack in order to
provide the required level of protection at the lowest possible cost.
MININMIZING SHIPPING COST
By minimizing the shipping cost from factories to warehouse or farm, warehouses to retail
outlets. The objective of transportation is to minimize the costs of transporting goods and
maximizing the profits of the company.
DETERMINING LOW COST LOCATION
By determining the low cost location of a new factory, warehouse or sales office. The
transportation problems can be categorized according to their demand for the goods and their
supply to the final destinations.
AGRICULTURE APPLICATIONS
The study of farm economics deals with inter-regional competition and optimum allocation of
crop production. Efficient production patterns can be specified by a linear programming model
under regional land resources and national demand constraints.
Linear programming can be applied in agricultural planning, e.g. allocation of limited resources
such as acreage, labour, water supply and working capital, etc. in a way so as to maximise net
revenue.
FINDING THE MINIMUM COST PRODUCTION SCHEDULE
Finding the minimum cost production schedule to satisfies the firms demand and production
limitation.
pg. 10
OPTIMIZATION THEORY
PHASES OF TRANSPORTATION MODEL

There are two phases to solve transportation model.
PHASE 1 (OBTAIN INITIAL FEASIBLE SOLUTION)
There are some methods to obtain the basic initial feasible solution.
a) The North west corner rule
b) Lowest cost entry method
c )Vogel’s approximation method
PHASE 2 (OBTAIN OPTIMAL BASIC SOLUTION)
There are some methods to check the optimal solution.
a) Stepping stone method
b) Modified distribution (MODI) method.
HOW TO SOLVE TRANSPORTATION MODEL?

Steps in Solving the Transportation Problem are
1. Define the objective function to be minimized with the constraints imposed on the problem.
2. Set up a transportation table with m rows representing the sources and n columns
representing the destination
3. Develop an initial feasible solution to the problem by any of these methods
a) The North west corner rule
b) Lowest cost entry method
c) Vogel’s approximation method
4. Examine whether the initial solution is feasible or not.( the solution is said to be feasible if
the solution has allocations in ( m+n-1) cells with independent positions.
5. Test wither the solution obtained in the above step is optimum or not using
a) Stepping stone method
pg. 11
OPTIMIZATION THEORY
b) Modified distribution (MODI) method.
6. If the solution is not optimum, modify the shipping schedule. Repeat the above until an
optimum solution is obtained.
(PHASE 1)
(A) NORTH WEST CORNER METHOD

WHAT IS NORTH WEST CORNER METHOD?
The North-West Corner Rule is a method adopted to compute the initial feasible solution of the
transportation problem. The name North-west corner is given to this method because the basic
variables are selected from the extreme left corner.
ALGORITHM
North-West Corner Method (NWCM) Steps (Rule)
Step-1:
Select the upper left corner cell of the transportation matrix and allocate min(s1, d1).
Step-2:
a. Subtract this value from supply and demand of respective row and column.
b. If the supply is 0, then cross (strike) that row and move down to the next cell.
c. If the demand is 0, then cross (strike) that column and move right to the next cell.
d. If supply and demand both are 0, then cross (strike) both row & column and move diagonally
to the next cell.
Step-3:
Repeact this steps until all supply and demand values are 0.
pg. 12
OPTIMIZATION THEORY
EXAMPLES
1.FIND THE SOLUTION USING NORTH WEST CORNER METHOD.
SOLUTION:
TOTAL number of supply constraints : 3
TOTAL number of demand constraints : 4
Problem Table is
The rim values for S1=7 and D1=5 are compared.
The smaller of the two i.e. min(7,5) = 5 is assigned to S1 D1
This meets the complete demand of D1 and leaves 7 - 5 = 2 units with S1
pg. 13
OPTIMIZATION THEORY
This exhausts the capacity of S1 and leaves 8 - 2 = 6 units with D2
This meets the complete demand of D2 and leaves 9 - 6 = 3 units with S2
pg. 14
OPTIMIZATION THEORY
This meets the complete demand of D3 and leaves 18 - 4 = 14 units with S3.
The smaller of the two i.e. min(14,14) = 14 is assigned to S3 D4.
pg. 15
OPTIMIZATION THEORY
Initial feasible solution is
The minimum total transportation cost
=19×5+30×2+30×6+40×3+70×4+20×14
=1015
Here, the number of allocated cells = 6 is equal to m + n - 1 = 3 + 4 - 1 = 6
This solution is non-degenerate.
pg. 16
OPTIMIZATION THEORY
Unbalanced supply and demand

If the total supply is not equal to the total demand then the problem is called unbalanced
transportation problem.
It's solution :
1. If the total supply is more than the total demand, then we add a new column, with
transportation cost 0
2. If the total demand is more than the total supply, then we add a new row, with
transportation cost 0.
2. Find Solution of UNBALANCED TRASPOTATION MODEL USING North-West

Corner method.
Solution:
Problem Table is
pg. 17
OPTIMIZATION THEORY
Here Total Demand = 215 is less than Total Supply = 235.
So We add a dummy demand constraint with 0 unit cost and with allocation 20.
Now, The modified table is
This exhausts the capacity of S1 and leaves 102 - 4 = 98 units with D2.
pg. 18
OPTIMIZATION THEORY
The rim values for S3=20 and Ddummy=20 are compared.
pg. 19
OPTIMIZATION THEORY
The smaller of the two i.e. min(20,20) = 20 is assigned to S3 Ddummy.
=4×72+8×4+24×82+16×16+24×41+0×20. =3528
∴ This solution is non-degenerate.
ADVANTAGES OF NORTH WEST CORNER

It is simple and reliable.
Easy to compute understand and interpret.
DISADVANTAGES OF NORTH WEST CORNER SOLUTION

This method does not take into considerations the shipping cost, consequently the initial
solution obtained by this method require improvement.
pg. 20
OPTIMIZATION THEORY
(B) LEAST COST METHOD
WHAT IS LEAST COST METHOD?

The Least Cost Method is another method used to obtain the initial feasible solution for the
transportation problem. Here, the allocation begins with the cell which has the minimum cost.
The lower cost cells are chosen over the higher-cost cell with the objective to have the least
cost of transportation.
Algorithm
Least Cost Method (LCM) Steps (Rule) are
Step-1:
Select the cell having minimum unit cost cij and allocate as much as possible, i.e. min(si,dj).
Step-2:
a. Subtract this min value from supply si and demand dj.
b. If the supply si is 0, then cross (strike) that row and If the demand dj is 0 then cross (strike)
that column.
c. If min unit cost cell is not unique, then select the cell where maximum allocation can be
possible
Step-3:
Repeact this steps for all uncrossed (unstriked) rows and columns until all supply and demand
values are 0.
LIVE EXAMPLES OF LEAST COST METHOD

There are some examples where we can see the least cost method practically.
★ Factories
★ Warehouses
★ Stalkholders
★ To Achieve unique Mission And Goals of agencies.
pg. 21
OPTIMIZATION THEORY
EXAMPLES:
1. Find Solution using Least Cost method.
Solution:
Problem Table is
The smallest transportation cost is 8 in cell S3D2
The allocation to this cell is min(18,8) = 8.
This satisfies the entire demand of D2 and leaves 18 - 8 = 10 units with S3
pg. 22
OPTIMIZATION THEORY
This satisfies the entire demand of D4 and leaves 10 - 7 = 3 units with S3.
pg. 23
OPTIMIZATION THEORY
The allocation to this cell is min(2,2) = 2
pg. 24
OPTIMIZATION THEORY
=10×7 +70×2 +40×7 +40×3 +8×8 +20×7
=814
2.Find Solution using Least Cost method.
Solution:
Problem Table is
pg. 25
OPTIMIZATION THEORY
pg. 26
OPTIMIZATION THEORY
pg. 27
OPTIMIZATION THEORY
=11×200+13×50+18×175+14×125+13×150+10×250
=12200
pg. 28
OPTIMIZATION THEORY
3. Unbalanced supply and demand example
Find Solution using Least Cost method.
Solution:
Problem Table is
Here Total Demand = 215 is less than Total Supply = 235.
So We add a dummy demand constraint with 0 unit cost and with allocation 20.
pg. 29
OPTIMIZATION THEORY
The smallest transportation cost is 0 in cell S1Ddummy
This satisfies the entire demand of Ddummy and leaves 76 - 20 = 56 units with S1
pg. 30
OPTIMIZATION THEORY
pg. 31
OPTIMIZATION THEORY
=4×56+0×20+24×41+16×41+8×16+16×61
=2968
ADVANTAGES OF LEAST COST METHOD

• Unlike north west corner method, Least Cost Method gives us the accurate results because; it
includes the transportation cost while making the allocation.
• Least Cost Method is a method which is very simple to use.
• Least Cost Method is very easy to understand.
• Under the method of Least Count, it is very easy to easy and simple to calculate the optimum
solution.
pg. 32
OPTIMIZATION THEORY
DISADVANTAGES OF LEAST COST METHOD

• In order to obtain the optimum solution certain rules should be followed. But Least Cost
Method does not follow those step by step rules to find out the optimum solution.
• Least Cost Method does not follow any systematic rule when there is a tie in the minimum
cost.
• Least Cost Method allows selection through personnel observation which might create
misunderstanding in obtaining the optimum solution.
WHERE THE LEAST COST METHOD USED?

Least cost method is used in various fields of life.
★ Financial Analysis
★ Economic Analysis
★ Risk Assessment
★ Transportation
★ Environment
COMPARISON BETWEEN NORTH WEST METHOD AND LEAST COST METHOD

The Least Cost Method is considered to produce more optimal results than the North-west
Corner because it considers the shipping cost while making the allocation, whereas the
North-West corner method only considers the availability and supply requirement and
allocation begin with the extreme left corner, irrespective of the shipping cost.
(C) VOGEL'S APPROXIMATION METHOD
INTRODUCTION
The Vogel's Approximation Method or VAM is an iterative procedure calculated to find out the
initial feasible solution of the transportation problem.
Like Least cost Method, here also the shipping cost is taken into consideration, but in a relative
sense.
pg. 33
OPTIMIZATION THEORY
WHY VOGELS APPPOXIMATION METHOD IS BEST?

Even though VAM takes many more calculations to find an initial solution as compared to the
other two methods, it almost produces a much better initial solution.
Hence VAM tends to minimize the total number of computations needed to reach an optimal
solution.
WHAT IS PENALTY IN VOGEL APPROXIMATION METHOD?

This video explains Vogel's Approximation Method or unit cost penalty method for finding
initial basic feasible solution in transportation problem.
Penalty=second min. Cost - min. Cost.
In case, the lowest and second lowest in a row/ column are equal, the penalty will be taken
zero.
ALGORITHM
Vogel's Approximation Method (VAM) Steps (Rule)
Step-1:
Find the cells having smallest and next to smallest cost in each row and write the difference
(called penalty) along the side of the table in row penalty.
Step-2:
Find the cells having smallest and next to smallest cost in each column and write the difference
(called penalty) along the side of the table in each column penalty.
Step-3:
Select the row or column with the maximum penalty and find cell that has least cost in selected
row or column. Allocate as much as possible in this cell.
If there is a tie in the values of penalties then select the cell where maximum allocation can be
possible
Step-4:
Adjust the supply & demand and cross out (strike out) the satisfied row or column.
Step-5: Repeact this steps until all supply and demand values are 0.
pg. 34
OPTIMIZATION THEORY
EXAMPLES
1. Find Solution using Voggel's Approximation method.
Solution:
Problem Table is
The maximum penalty, 22, occurs in column D2.
The minimum cij in this column is c32 = 8.
The maximum allocation in this cell is min(18,8) = 8.
It satisfy demand of D2 and adjust the supply of S3 from 18 to 10 (18 - 8 = 10).
pg. 35
OPTIMIZATION THEORY
It satisfy demand of D1 and adjust the supply of S1 from 7 to 2 (7 - 5 = 2)
The maximum penalty, 50, occurs in row S3.
The minimum cij in this row is c34 = 20.
It satisfy supply of S3 and adjust the demand of D4 from 14 to 4 (14 - 10 = 4).
pg. 36
OPTIMIZATION THEORY
It satisfy demand of D4 and adjust the supply of S2 from 9 to 7 (9-2=7)
pg. 37
OPTIMIZATION THEORY
It satisfy supply of S2 and demand of D3.
=19×5+10×2+40×7+60×2+8×8+20×10
=779
pg. 38
OPTIMIZATION THEORY
Example-2
Find Solution using Vogel's Approximation method.
Solution:
Problem Table is
pg. 39
OPTIMIZATION THEORY
It satisfy supply of S1 and adjust the demand of D2 from 225 to 175 (225 - 50 = 175)
It satisfy demand of D2 and adjust the supply of S2 from 300 to 125 (300 - 175 = 125)
pg. 40
OPTIMIZATION THEORY
It satisfy supply of S2 and adjust the demand of D4 from 250 to 125 (250 - 125 = 125
pg. 41
OPTIMIZATION THEORY
=11×200+13×50+18×175+10×125+13×275+10×125
=12075
Unbalanced supply and demand example
Find Solution using Voggel's Approximation method.
pg. 42
OPTIMIZATION THEORY
Solution:
Problem Table is
Here Total Demand = 215 is less than Total Supply = 235. So We add a dummy demand
constraint with 0 unit cost and with allocation 20.
pg. 43
OPTIMIZATION THEORY
It satisfy demand of Ddummy and adjust the supply of S2 from 82 to 62 (82 - 20 = 62)
pg. 44
OPTIMIZATION THEORY
maximum penalty, 8, occurs in row S2.
pg. 45
OPTIMIZATION THEORY
=8×76+24×21+16×41+0×20+8×72+16×5
=2424
∴ This solution is non-degenerate
Advantage of Vogel Approximation Method

a. This method is very systematic.
b. This method takes lesser time in solving transportation problem.
c. Less computation are involved in this methods.
pg. 46
OPTIMIZATION THEORY
Disadvantage of Vogel Approximation Methods

a. This methods provides approximate solution to the given problem.
b. This methods is tedious when the given matrix is large one.
Conclusion
The goal of the Vogel approximation method was to reduce the operating costs of transport
in a selected company.
(PHASE 2)
MODI METHOD
The modified distribution method, is also known as MODI method or (u - v) method provides a
minimum cost solution to the transportation problems.
MODI is an efficient method of checking the optimality of the initial feasible solution. MODI
method is an improvement over stepping stone method.
Algorithm
MODI Method Steps (Rule)
Step-1:
Find an initial basic feasible solution using any one of the three methods NWCM, LCM or VAM.
Step-2:
Find ui and vj for rows and columns. To start
a. assign 0 to ui or vj where maximum number of allocation in a row or column respectively.
b. Calculate other ui's and vj's using cij=ui+vj, for all occupied cells.
Step-3:
For all unoccupied cells, calculate dij=cij-(ui+vj), .
pg. 47
OPTIMIZATION THEORY
Step-4:
Check the sign of dij
a. If dij>0, then current basic feasible solution is optimal and stop this procedure.
b. If dij=0 then alternative soluion exists, with different set allocation and same transportation
cost. Now stop this procedure.
c. If dij<0, then the given solution is not an optimal solution and further improvement in the
solution is possible.
Step-5:
Select the unoccupied cell with the largest negative value of dij, and included in the next
solution.
Step-6:
Draw a closed path (or loop) from the unoccupied cell (selected in the previous step). The right
angle turn in this path is allowed only at occupied cells and at the original unoccupied cell. Mark
(+) and (-) sign alternatively at each corner, starting from the original unoccupied cell.
Step-7:
1. Select the minimum value from cells marked with (-) sign of the closed path.
2. Assign this value to selected unoccupied cell (So unoccupied cell becomes occupied cell).
3. Add this value to the other occupied cells marked with (+) sign.
4. Subtract this value to the other occupied cells marked with (-) sign.
Step-8:
Repeat Step-2 to step-7 until optimal solution is obtained. This procedure stops when all dij≥0
for unoccupied cells.
Example
Find Solution using Voggel's Approximation method, also find optimal solution
using modi method.
pg. 48
OPTIMIZATION THEORY
Solution:
By Applying vogels approximation method,
=19×5+10×2+40×7+60×2+8×8+20×10
=779
∴ This solution is non-degenerate
Optimality test using modi method...
Allocation Table is
pg. 49
OPTIMIZATION THEORY
Iteration-1 of optimality test

1. Find ui and vj for all occupied cells(i,j), where cij=ui+vj
1. Substituting, v4=0, we get
2.c14=u1+v4⇒u1=c14-v4⇒u1=10-0⇒u1=10
3.c11=u1+v1⇒v1=c11-u1⇒v1=19-10⇒v1=9
4.c24=u2+v4⇒u2=c24-v4⇒u2=60-0⇒u2=60
5.c23=u2+v3⇒v3=c23-u2⇒v3=40-60⇒v3=-20
6.c34=u3+v4⇒u3=c34-v4⇒u3=20-0⇒u3=20
7.c32=u3+v2⇒v2=c32-u3⇒v2=8-20⇒v2=-12
2.Find dij for all unoccupied cells(i,j), where dij=cij-(ui+vj)
1.d12=c12-(u1+v2)=30-(10-12)=32
2.d13=c13-(u1+v3)=50-(10-20)=60
3.d21=c21-(u2+v1)=70-(60+9)=1
4.d22=c22-(u2+v2)=30-(60-12)=-18
pg. 50
OPTIMIZATION THEORY
5.d31=c31-(u3+v1)=40-(20+9)=11
6.d33=c33-(u3+v3)=70-(20-20)=70
3. Now choose the minimum negative value from all dij (opportunity cost) = d22 = [-18]
and draw a closed path from S2D2.
Closed path is S2D2→S2D4→S3D4→S3D2
Closed path and plus/minus sign allocation...
4.Minimum allocated value among all negative position (-) on closed path = 2
Substract 2 from all (-) and Add it to all (+)
5. Repeat the step 1 to 4, until an optimal solution is obtained.
pg. 51
OPTIMIZATION THEORY
Iteration-2 of optimality test

1. Find ui and vj for all occupied cells(i,j), where cij=ui+vj
1. Substituting, u1=0, we get
2.c11=u1+v1⇒v1=c11-u1⇒v1=19-0⇒v1=19
3.c14=u1+v4⇒v4=c14-u1⇒v4=10-0⇒v4=10
4.c34=u3+v4⇒u3=c34-v4⇒u3=20-10⇒u3=10
5.c32=u3+v2⇒v2=c32-u3⇒v2=8-10⇒v2=-2
6.c22=u2+v2⇒u2=c22-v2⇒u2=30+2⇒u2=32
7.c23=u2+v3⇒v3=c23-u2⇒v3=40-32⇒v3=8
2. Find dij for all unoccupied cells(i,j), where dij=cij-(ui+vj)
1.d12=c12-(u1+v2)=30-(0-2)=32
2.d13=c13-(u1+v3)=50-(0+8)=42
3.d21=c21-(u2+v1)=70-(32+19)=19
4.d24=c24-(u2+v4)=60-(32+10)=18
5.d31=c31-(u3+v1)=40-(10+19)=11
6.d33=c33-(u3+v3)=70-(10+8)=52
pg. 52
OPTIMIZATION THEORY
Since all dij≥0.
So final optimal solution is arrived.
minimum total transportation cost
=19×5+10×2+30×2+40×7+8×6+20×12
=743
DIFFERENT CASES IN TRANSPORTATION MODEL

6. 1 DEGENCY
the basic feasible solution of a transportation problem with m origins and n destinations has
fewer than m + n – 1 positive xij (occupied cells), the problem is said to be a
degenerate transportation problem.
pg. 53
OPTIMIZATION THEORY
Degeneracy can occur at two stages:
1. At the initial solution
2. During the testing of the optimal solution
To resolve degeneracy, we make use of an artificial quantity (ε). The quantity ε is assigned to
that unoccupied cell, which has the minimum transportation cost. For calculation purposes, the
value of ε is assumed to be zero. The quantity ε is so small that it does not affect the supply and
demand constraints.
6.2 Maximization in a Transportation Problem
There are certain types of transportation problems where the objective function is
to be maximized instead of being minimized. These problems can be solved by
converting the maximization problem into a minimization problem. The conversion can be
done by subtracting each of the profit elements associated with the transportation
routes from the largest profit element. The resulting values so obtained represents
opportunity cost because they corresponds to the difference in profit earned by that routs and
the largest profit that could be earned by any of the routs.
6.3 Prohibited Routes
Sometimes there may be situations, where it is not possible to use certain routes in
a transportation problem. For example, road construction, bad road conditions, strike,
unexpected floods, local traffic rules, weight or size condition etc.
We can handle such type of problems in different ways:
•A very large cost represented by M or ∞ is assigned to each of such routes, which are not
available.
•To block the allocation to a cell with a prohibited route, we can cross out that cell.The problem
can then be solved in its usual way.
Conclusion
Understanding of transportation problem methods are help to find an optimum solution for the
transportation flow. Based on calculations and results of different methods and approaches to
the same transportation problem, using different cases when demand was and
wasn’t equal to supply. The researcher is also looking into the forecasting problem
to how forecasting approaches are help to predict transportation activities of the company in
the future.
pg. 54
OPTIMIZATION THEORY
ASSIGNMENT MODEL
INTRODUCTION
Assignment models is one of topics of operations research. It consists of assigning a specific
(person or worker) to a specific (task or job) assuming that there are the number of persons
equal to the number of tasks available.
EXAMPLES
Suppose that a taxi firm has three taxis (the agents) available, and three customers (the tasks)
wishing to be picked up as soon as possible. The firm prides itself on speedy pickups, so for
each taxi the "cost" of picking up a particular customer will depend on the time taken for the
taxi to reach the pickup point. This is a balanced assignment problem. Its solution is whichever
combination of taxis and customers results in the least total cost.
Now, suppose that there are four taxis available, but still only three customers. This is an
unbalanced assignment problem. One way to solve it is to invent a fourth dummy task, perhaps
called "sitting still doing nothing", with a cost of 0 for the taxi assigned to it. This reduces the
problem to a balanced assignment problem, which can then be solved in the usual way and still
give the best solution to the problem.
Similar adjustments can be done in order to allow more tasks than agents, tasks to which
multiple agents must be assigned (for instance, a group of more customers than will fit in one
taxi), or maximizing profit rather than minimizing cost.
Types of assignment problem in Operational Research

The assignment problem is classified into balanced assignment problem and unbalanced
assignment problem.
BALANCED ASSIGNMENT MODEL
If the number of rows is equal to the number of columns, then the problem is termed as a
balanced assignment Problem.
UNBALANCED ASSIGNMENT MODEL
An unbalanced assignment problem. If the problem is unbalanced, like an unbalanced

transportation problem, then necessary number of dummy row(s)/column(s) is added such that
the cost matrix is a square matrix. The values for the entries in the dummy row(s)/column(s)
pg. 55
OPTIMIZATION THEORY
are assumed to be zero. Under such a condition, while implementing the solution, the dummy
row(s) or the dummy column(s) will not have assignment(s).
OBJECTIVE OF ASSIGNMENT MODEL

The objective of assignment problem is to assign a number of jobs to an equal number of
machines so as to minimize the total assignment cost or to minimize the total consumed time
for execution of all the jobs.
APPLICATIONS OF ASSIGNMENT MODEL

1. Assign sales people to sales territories.
2.Assign Vehicles to routes.
3.Assign accountants to client accounts.
4.Assign contracts to bidders through systematic evaluation of bids from competing suppliers.
5.Assign naval vessels to petrol sectors.
6.Assign development engineers to several construction sites.

7. Schedule teachers to classes etc.
8.Men are matched to machines according to pieces produced per hour by each individual on
each machine.
9.Teams are matched to project by the expected cost of each team to accomplish each project.
Approach OF ASSIGNMENT MODEL

Each assignment problem has a table or matrix associated with it. Generally the row contain the
objects or people we wish to assign, and the column comprise the jobs or task we want them
assigned to. Consider a problem of assignment of n resources to m activities so as to minimize
the overall cost or time in such a way that each resource can associate with one and only one
job.
pg. 56
OPTIMIZATION THEORY
The cost matrix (Cij) is given as under :
The cost matrix is same as that of a T.P except that availability at each of the resource and the
requirement at each of the destinations is unity.
Let xij denote the assignment of ith resource to jth activity, such that
METHODS OF ASSIGNMENT PROBLEM:

Food’s technique method or Hungarian Assignment method (Minimization)
The Hungarian method (also known as Flood’s Technique or the Reduced Matrix method) of
assignment provides us with an efficient means of finding the optimal solutions without having
to make a direct comparsion of every option.
It operates on a principle of matrix reduction. This just means that by subtracting and adding
appropriate numbers in the cost table or matrix, we can reduce the problem to a matrix of
opportunity costs (opportunity costs show the relative penalties associated with assigning any
worker to a job as opposed to making the best or least cost assignment).
pg. 57
OPTIMIZATION THEORY
If we can reduce the matrix to the point where there is one zero element in each row and
column, it will then be possible to make optimal assignment, i.e. assignment in which all the
opportunity costs are zero.
Algorithm
Hungarian Method Steps (Rule)
Step-1:
If number of rows is not equal to number of columns, then add dummy rows or columns with
cost 0, to make it a square matrix.
Step-2:
a. Identify the minimum element in each row and subtract it from each element of that row.
b. Identify the minimum element in each column and subtract it from every element of that
column.
Step-3:
Make assignment in the opporunity cost table
a. Identify rows with exactly one unmarked 0. Make an assignmment to this single 0 by make a
square ( [0] ) around it and cross off all other 0 in the same column.
b. Identify columns with exactly one unmarked 0. Make an assignmment to this single 0 by
make a square ( [0] ) around it and cross off all other 0 in the same rows.
c. If a row and/or column has two or more unmarked 0 and one cannot be chosen by
inspection, then choose the cell arbitarily.
d. Continue this process until all 0 in rows/columns are either assigned or cross off( × ).
Step-4:
(a) If the number of assigned cells = the number of rows, then an optimal assignment is found
and In case you have chosen a 0 cell arbitrarily, then there may be an alternate optimal solution
exists.
(b) If optimal solution is not optimal, then goto Step-5.
pg. 58
OPTIMIZATION THEORY
Step-5:
Draw a set of horizontal and vertical lines to cover all the 0
a. Tick(✓) mark all the rows in which no assigned 0.
b. Examine Tick(✓) marked rows, If any 0 cell occurs in that row, then tick(✓) mark that column.
c. Examine Tick(✓) marked columns, If any assigned 0 exists in that columns, then tick(✓) mark
that row.
d. Repeat this process until no more rows or columns can be marked.
e. Draw a straight line for each unmarked rows and marked columns.
f. If the number of lines is equal to the number of rows then the current solution is the optimal,
otherwise goto step-6
Step-6:
Develop the new revised opportunity cost table
a. Select the minimum element, say k, from the cells not covered by any line,
b. Subtract k from each element not covered by a line.
c. Add k to each intersection element of two lines.
Step-7:
Repeat stpes 3 to 6 until an optimal solution is arrived.
Examples
1.Find Solution of Assignment problem using Hungarian method (MIN case)
Solution:
pg. 59
OPTIMIZATION THEORY
The number of rows = 5 and columns = 5
Here given problem is balanced.
Step-1: Find out the each row minimum element and subtract it from that row
Step-2: Find out the each column minimum element and subtract it from that column
Step-3: Make assignment in the opporunity cost table
pg. 60
OPTIMIZATION THEORY
(1) Rowwise cell (A,II) is assigned
(2) Rowwise cell (B,I) is assigned, so columnwise cell (D,I) crossed off.
(3) Rowwise cell (D,IV) is assigned, so columnwise cell (C,IV),(E,IV) crossed off.
(4) Columnwise cell (C,III) is assigned, so rowwise cell (C,V) crossed off.
Rowwise & columnwise assignment shown in table
Step-4: Number of assignments = 4, number of rows = 5
Which is not equal, so solution is not optimal.
Step-5: Cover the 0 with minimum number of lines
(1) Mark(✓) row E since it has no assignment
(2) Mark(✓) column IV since row E has 0 in this column
(3) Mark(✓) row D since column IV has an assignment in this row D.
(4) Mark(✓) column I since row D has 0 in this column
(5) Mark(✓) row B since column I has an assignment in this row B.
(6) Since no other rows or columns can be marked, therefore draw straight lines through the
unmarked rows A,C and marked columns I,IV
Tick mark not allocated rows and allocated columns
pg. 61
OPTIMIZATION THEORY
Step-6: Develop the new revised table by selecting the smallest element, among the cells not
covered by any line (say k = 2)
Subtract k = 2 from every element in the cell not covered by a line.
Add k = 2 to every elment in the intersection cell of two lines.
Repeat stpes 3 to 6 until an optimal solution is obtained.
(1) Rowwise cell (A,II) is assigned.
(2) Rowwise cell (B,I) is assigned, so columnwise cell (D,I) crossed off.
(3) Rowwise cell (E,IV) is assigned, so columnwise cell (D,IV) crossed off.
(4) Columnwise cell (C,V) is assigned, so rowwise cell (C,III) crossed off.
(5) Rowwise cell (D,III) is assigned. Rowwise & columnwise assignment shown in table
pg. 62
OPTIMIZATION THEORY
Which is equal, so solution is optimal. Optimal assignments are
Optimal solution is
2. Example-2
pg. 63
OPTIMIZATION THEORY
Find Solution of Assignment problem using Hungarian method (MIN case).
Solution:
Step-1: Find out the each row minimum element and subtract it from that row.
pg. 64
OPTIMIZATION THEORY
Step-2: Find out the each column minimum element and subtract it from that column.
(1) Rowwise cell (A,II) is assigned
(2) Rowwise cell (B,III) is assigned
(3) Rowwise cell (C,I) is assigned.
Which is equal, so solution is optimal
pg. 65
OPTIMIZATION THEORY
Optimal assignments are
Unbalanced Assignment Problem

Example
Find Solution of Assignment problem using Hungarian method (MIN case)
Solution:
pg. 66
OPTIMIZATION THEORY
Here given problem is unbalanced and add 1 new column to convert it into a balance.
pg. 67
OPTIMIZATION THEORY
(1) Rowwise cell (C,J5) is assigned, so columnwise cell (A,J5),(B,J5),(D,J5),(E,J5) crossed off.
(2) Columnwise cell (B,I) is assigned
(3) Columnwise cell (D,II) is assigned, so rowwise cell (D,III) crossed off.
(4) Columnwise cell (A,IV) is assigned
(2) Mark(✓) column J5 since row E has 0 in this column
(3) Mark(✓) row C since column J5 has an assignment in this row C.
unmarked rows B,D and marked columns IV,J5
pg. 68
OPTIMIZATION THEORY
Tick mark not allocated rows and allocated columns.
(1) Rowwise cell (A,IV) is assigned, so columnwise cell (E,IV) crossed off.
(2) Rowwise cell (B,I) is assigned
(3) Rowwise cell (C,J5) is assigned, so columnwise cell (E,J5) crossed off.
pg. 69
OPTIMIZATION THEORY
Rowwise and column wise assignment is shown
(2) Mark(✓) column IV since row E has 0 in this column
(3) Mark(✓) column J5 since row E has 0 in this column
(4) Mark(✓) row A since column IV has an assignment in this row A.
(5) Mark(✓) row C since column J5 has an assignment in this row C.
unmarked rows B,D and marked columns IV,J5
pg. 70
OPTIMIZATION THEORY
(1) Rowwise cell (B,I) is assigned, so columnwise cell (C,I) crossed off.
(2) Rowwise cell (C,J5) is assigned, so columnwise cell (E,J5) crossed off.
(3) Rowwise cell (E,IV) is assigned, so columnwise cell (A,IV) crossed off.
(5) Columnwise cell (A,III) is assigned
pg. 71
OPTIMIZATION THEORY
Optimal solution is
pg. 72
OPTIMIZATION THEORY
Maximization case in Assignment Problem

Maximization case in Assignment Problem
There may be situation when the assignment problem calls for maximization of profit.
Such problem can be solved by converting the given maximization problem into minimization
problem by substracting all the elements of the given matrix from the highest element.
Example
4.Find Solution of Assignment problem using Hungarian method (MAX case).
Solution:
Here the problem is of Maximazition type and convert it into minimization by substracting it
from maximum value 42.
pg. 73
OPTIMIZATION THEORY
(1) Rowwise cell (A,I) is assigned, so columnwise cell (B,I),(C,I),(D,I) crossed off.
(2) Columnwise cell (D,II) is assigned, so rowwise cell (D,III),(D,IV) crossed off.
Rowwise & columnwise assignment shown in table.
pg. 74
OPTIMIZATION THEORY
(1) Mark(✓) row B since it has no assignment
(2) Mark(✓) row C since it has no assignment
(3) Mark(✓) column I since row B has 0 in this column
(4) Mark(✓) row A since column I has an assignment in this row A.
unmarked rows D and marked columns
pg. 75
OPTIMIZATION THEORY
(1) Rowwise cell (A,I) is assigned, so columnwise cell (B,I),(C,I) crossed off.
(2) Rowwise cell (B,II) is assigned, so columnwise cell (C,II),(D,II) crossed off.
(3) Columnwise cell (D,III) is assigned, so rowwise cell (D,IV) crossed off.
(2) Mark(✓) column I since row C has 0 in this column
(3) Mark(✓) column II since row C has 0 in this column
pg. 76
OPTIMIZATION THEORY
(5) Mark(✓) row B since column II has an assignment in this row B.
unmarked rows D and marked columns I,II
Tick mark not allocated rows and allocated columns
pg. 77
OPTIMIZATION THEORY
(2) Columnwise cell (D,IV) is assigned, so rowwise cell (D,III) crossed off.
(3) Rowwise cell (B,II) is assigned, so columnwise cell (C,II) crossed off., so rowwise cell (B,III)
crossed off.
(4) Rowwise cell (C,III) is assigned
Optimal solution is
pg. 78
OPTIMIZATION THEORY
5. Multiple optimal solutions in Assignment Problem

Multiple optimal solutions in Assignment Problem
While making an assignment in reducted matrix, it is possible to have two or more ways to
assign 0's. In such case there may be an alternate optimal solution exists with same optimal
value.
Example
Find Solution of Assignment problem using Hungarian method (MAX case).
Solution:
pg. 79
OPTIMIZATION THEORY
Here the problem is of Maximazition type and convert it into minimization by substracting it
from maximum value 42
pg. 80
OPTIMIZATION THEORY
(1) Rowwise cell (A,I) is assigned, so columnwise cell (B,I),(C,I),(D,I) crossed off.
(2) Columnwise cell (D,II) is assigned, so rowwise cell (D,III),(D,IV) crossed off.
pg. 81
OPTIMIZATION THEORY
(1) Mark(✓) row B since it has no assignment
(3) Mark(✓) column I since row B has 0 in this column
unmarked rows D and marked columns
pg. 82
OPTIMIZATION THEORY
(2) Rowwise cell (B,II) is assigned, so columnwise cell (C,II),(D,II) crossed off.
(3) Columnwise cell (D,III) is assigned, so rowwise cell (D,IV) crossed off.
(2) Mark(✓) column I since row C has 0 in this column
(3) Mark(✓) column II since row C has 0 in this column
(5) Mark(✓) row B since column II has an assignment in this row B.
unmarked rows D and marked columns I,II
pg. 83
OPTIMIZATION THEORY
(2) Columnwise cell (D,IV) is assigned, so rowwise cell (D,III) crossed off.
(3) Rowwise cell (B,II) is assigned, so columnwise cell (C,II) crossed off., so rowwise cell (B,III)
crossed off.
(4) Rowwise cell (C,III) is assigned
pg. 84
OPTIMIZATION THEORY
Optimal assignments are.
Optimal solution is.
pg. 85
OPTIMIZATION THEORY
CONCLUSION:
The assignment problem is a combinatorial optimization problem that is flexible as it can be
used as an approach to model any real-world problem.
Moreover, it is very important to choose the right approaches in solving the problem so as to
obtain an optimal or near optimal solution depending on the complexity of the problem.
pg. 86

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OPTIMIZATION THEORY

BSC (HONS) 2018 - 2022

SUBMITTED TO: MAAM RIDA SAYYED

SUBMITTED BY: HIRA NAEEM

ROLL NUMBER: 1518-BH-STAT-18

TRANSPORTATION MODEL IN LINEAR PROGRAMMING

BRIEF HISTORY OF TRANSPORTATION MODEL

CLASSIFYING BY THEIR OBJECTIVE

WHAT IS TRANSPORTATION MODEL?

TYPES OF TRANSPORTATION MIDEL

(A) BALANCED TRANSPORTATION MODEL (B) UNBALANCED TRANSPORTATION PROBLEM

HOW TO BALANCE TRANSPORTATION PROBLEM?

AIM OF TRANSPORTATION MODEL

SIMPLEX NETWORK REPRESENTATION

CHARACTERISTICS OF TRANSPORTATION MODEL

APPLICATIONS OF TRANSPORTATION MODEL

PHASES OF SOLUTION OF TRANSPORTATION MODEL

HOW TO SOLVE THE TRANSPORTATION MODEL?

(A) NORTH WEST CORNER METHOD

WHAT IS NORTH WEST CORNER METHOD?

STEPS TO SOLVE NORTH WEST CORNER METHOD

ADVANTAGES OF NORTH WEST CORNER

DISADVANTAGES OF NORTH WEST CORNER

(B) LEAST COST METHOD

STEPS TO SOLVE LEAST COST METHOD

ADVANTAGES OF LEAST COST METHOD

DISADVANTAGES OF LEAST COST METHOD

(C) VOGEL'S APPROXIMATION METHOD

WHY VOGEL METHOD IS THE BEST?

WHAT IS PENALTY IN VOGEL METHOD?

(A) BALANCED VOGELS METHOD (B) UNBALANCED VOGELS METHOD

DIFFERENT CASES IN TRANSPORTATION MODEL

WHAT IS ASSIGNMENT MODEL?

EXAMPLES OF ASSIGNMENT MODEL

TYPES OF ASSIGNMENT MODEL

OBJECTIVE OF ASSIGNMENT MODEL

APPLICATIONS OF ASSIGNMENT MODEL

APPROACH OF ASSIGNMENT MODEL

METHOD ADAPTION TO SOLVE ASSIGNMENT MODEL

HOW TO SOLVE ASSIGNMENT MODEL?

(A) BOUNDED ASSIGNMENT MODEL (B) UNBOUNDED ASSIGNMENT MODEL

MAXIMIZATION CASE IN ASSIGNMENT MODEL

MULTIPLE OPTIMAL SOLUTIONS IN ASSIGNMENT MODEL

TRANSPORTATION MODEL IN LINEAR PROGRAMMING

BRIEF HISTORY OF TRANSPORTATION MODEL

Usually, the scheduling problems in transportation are considered as problems of multi-

– Optimization: the best possible solution is sought.

Nowadays, multi-objective optimization is applied to a great deal of domains, such as

● Biology, for many analysis of DNA sequences;

CLASSIFYING THE TRANSPORTATION MODEL BY THEIR OBJECTIVE

WHAT IS TRANSPORTATION MODEL?

Transportation models deals with the transportation of a product manufactured at different

A typical transportation problem contains

Sources with availability

Destinations with requirements

Unit cost of transportation from various sources to destinations

To determine schedule of transportation to minimize total transportation cost.