342 CHAPTER 9 • TRANSPORTATION AND ASSIGNMENT MODELS

9.1 Introduction
In this chapter we explore three special types of linear programming problems—the transporta-
tion problem (first introduced in Chapter 8), the assignment problem, and the transshipment
problem. All these may be modeled as network flow problems, with the use of nodes (points)
and arcs (lines). Additional network models will be discussed in Chapter 11.
This first part of this chapter will explain these problems, provide network representations
for them, and provide linear programming models for them. The solutions will be found using
standard linear programming software. The transportation and assignment problems have a spe-
cial structure that enables them to be solved with very efficient algorithms. The latter part of the
chapter will present the special algorithms for solving them.

9.2 The Transportation Problem

The transportation problem deals with the distribution of goods from several points of supply
(origins or sources) to a number of points of demand (destinations). Usually we are given a ca-
pacity (supply) of goods at each source, a requirement (demand) for goods at each destination,
and the shipping cost per unit from each source to each destination. An example is shown in
Figure 9.1. The objective of such a problem is to schedule shipments so that total transportation
costs are minimized. At times, production costs are included also.
Transportation models can also be used when a firm is trying to decide where to locate a
new facility. Before opening a new warehouse, factory, or sales office, it is good practice to con-
sider a number of alternative sites. Good financial decisions concerning the facility location also
attempt to minimize total transportation and production costs for the entire system.

Linear Program for the Transportation Example

The Executive Furniture Corporation is faced with the transportation problem shown in Figure 9.1.
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

FIGURE 9.1
Network Representation Source Destination
of a Transportation Supply Demand
problem, with Costs,
Demands, and Supplies $5
Des Moines Albuquerque
100 300
(Source 1) (Destination 1)
$4
$3

$8
Evansville $4 Boston
300 200
(Source 2) (Destination 2)
$3

$9

$7
Fort Lauderdale Cleveland
300 200
(Source 3) $5 (Destination 3)

The number of variables and
constraints for a typical
transportation problem can be
found from the number of
sources and destinations.
9.2 THE TRANSPORTATION PROBLEM 343
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. Let
Xij = number of units shipped from source i to destination j
where
i = 1, 2, 3, with 1 = Des Moines, 2 = Evansville, and 3 = Fort Lauderdale
j = 1, 2, 3, with 1 = Albuquerque, 2 = Boston, and 3 = Cleveland
The LP formulation is
Minimize total cost = 5X11 + 4X12 + 3X13 + 8X21 + 4X22
+ 3X23 + 9X31 + 7X32 + 5X33
subject to
X11 + X12 + X13 … 100 (Des Moines supply)
X21 + X22 + X23 … 300 (Evansville supply)
X31 + X32 + X33 … 300 (Fort Lauderdale supply)
X11 + X21 + X31 = 300 (Albuquerque demand)
X12 + X22 + X32 = 200 (Boston demand)
X13 + X23 + X33 = 200 (Cleveland demand)
Xij Ú 0 for all i and j
The solution to this LP problem could be found using Solver in Excel 2010 by putting these con-
straints into a spreadsheet, as discussed in Chapter 7. However, the special structure of this prob-
lem allows for an easier and more intuitive format, as shown in Program 9.1. Solver is still used,
but since all the constraint coefficients are 1 or 0, the left-hand side of each constraint is simply
the sum of the variables from a particular source or to a particular destination. In Program 9.1
these are cells E10:E12 and B13:D13.
A General LP Model for Transportation Problems
In this example, there were 3 sources and 3 destinations. The LP had 3 * 3 = 9 variables and
3 + 3 = 6 constraints. In general, for a transportation problem with m sources and n destina-
tion, the number of variables is mn, and the number of constraints is m + n. For example, if
there are 5 (i.e., m = 5) constraints and 8 (i.e., n = 8) variables, the linear program would have
5(8) = 40 variables and 5 + 8 = 13 constraints.
The use of the double subscripts on the variables makes the general form of the linear pro-
gram for a transportation problem with m sources and n destinations easy to express. Let
xij = number of units shipped from source i to destination j
cij = cost one unit from source i to destination j
si = supply at source i
dj = demand at destination j
The linear programming model is
n m
Minimize cost = g g cijxij
j=1 i=1
subject to
n
g xij … si i = 1, 2,..., m
j=1
m
g xij = dj j = 1, 2,..., n
i=1
xij Ú 0 for all i and j
344 CHAPTER 9 • TRANSPORTATION AND ASSIGNMENT MODELS

PROGRAM 9.1
Executive Furniture
Corporation Solution in
Excel 2010

Solver Parameter Inputs and Selections Key Formulas

Set Objective: B16
By Changing cells: B10:D12
To: Min
Subject to the Constraints:
E10:E12 <= F10:F12 Copy E10 to E11:E12
B13:D13 = B14:D14
Solving Method: Simplex LP
聺 Make Variables Non-Negative

Copy B13 to C13:D13

9.3 The Assignment Problem

An assignment problem is
equivalent to a transportation
problem with each supply and
demand equal to 1.
The assignment problem refers to the class of LP problem that involve determining the most
efficient assignment of people to projects, sales people to territories, auditors to companies for
audits, contracts to bidders, jobs to machines, heavy equipment (such as cranes) to construction
jobs, and so on. The objective is most often to minimize total costs or total time of performing
the tasks at hand. One important characteristic of assignment problems is that only one job or
worker is assigned to one machine or project.
Figure 9.2 provides a network representation of an assignment problem. Notice that this
network is very similar to the network for the transportation problem. In fact, an assignment
problem may be viewed as a special type of transportation problem in which the supply at each
source and the demand at each destination must equal one. Each person may only be assigned to
one job or project, and each job only needs one person.
 9.3 THE ASSIGNMENT PROBLEM 345

FIGURE 9.2
Example of an Person Project
Assignment Problem in a Supply Demand
Transportation Network
Format $11
Adams Project 1
1 1
(Source 1) (Destination 1)
$14
$6

$8
Brown $10 Project 2
1 1
(Source 2) (Destination 2)
$11

$9

$12
Cooper Project 3
1 1
(Source 3) $7 (Destination 3)

Linear Program for Assignment Example

The network in Figure 9.2 represents a problem faced by the Fix-It Shop, which has just
received three new repair projects that must be completed quickly: (1) a radio, (2) a toaster oven,
and (3) a coffee table. Three repair persons, each with different talents, are available to do the
jobs. The shop owner estimates the cost in wages if the workers are assigned to each of the three
projects. The costs differ due to the talents of each worker on each of the jobs. The owner wishes
to assign the jobs so that total cost is minimized and each job must have one person assigned to
it, and each person can only be assigned to one job.
In formulating this as a linear program, the general LP form of the transportation problem
can be used. In defining the variables, let

Xij = e
1 if person i is assigned to project j
Special variables 0-1 are used
with the assignment model. 0 otherwise
where
i = 1, 2, 3, with 1 = Adams, 2 = Brown, and 3 = Cooper
j = 1, 2, 3, with 1 = Project 1, 2 = Project 2, and 3 = Project 3
The LP formulation is
Minimize total cost = 11X11 + 14X12 + 6X13 + 8X21 + 10X22
+ 11X23 + 9X31 + 12X32 + 7X33
subject to
X11 + X12 + X13 … 1
X21 + X22 + X23 … 1
X31 + X32 + X33 … 1
X11 + X21 + X31 = 1
X12 + X22 + X32 = 1
X13 + X23 + X33 = 1
xij = 0 or 1 for all i and j
The solution is shown in Program 9.2. From this, x13 = 1, so Adams is assigned to project 3;
x22 = 1, so Brown is assigned to project 2; and x31 = 1, so Cooper is assigned to project 1. All
other variables are 0. The total cost is 25.
346 CHAPTER 9 • TRANSPORTATION AND ASSIGNMENT MODELS

PROGRAM 9.2
Fix-It Shop Solution
in Excel 2010

Solver Parameter Inputs and Selections Key Formulas

Set Objective: B16

By Changing cells: B10:D12
To: Min
Subject to the Constraints: Copy E10 to E11:E12
E10:E12 <= F10:F12
B13:D13 = B14:D14
Solving Method: Simplex LP
聺 Make Variables Non-Negative
Copy B13 to C13:D13

In the assignment problem, the variables are required to be either 0 or 1. Due to the special
structure of this problem with the constraint coefficients as 0 or 1 and all the right-hand-side val-
ues equal to 1, the problem can be solved as a linear program. The solution to such a problem (if
one exists) will always have the variables equal to 0 or 1. There are other types of problems
where the use of such 0–1 variables is desired, but the solution to such problems using normal
linear programming methods will not necessarily have only zeros and ones. In such cases, spe-
cial methods must be used to force the variables to be either 0 or 1, and this will be discussed as
a special type of integer programming problem which will be seen in Chapter 10.

9.4 The Transshipment Problem

In a transportation problem, if the items being transported must go through an intermediate point
(called a transshipment point) before reaching a final destination, the problem is called a
transshipment problem. For example, a company might be manufacturing a product at several
factories to be shipped to a set of regional distribution centers. From these centers, the items are
 9.4 THE TRANSSHIPMENT PROBLEM 347

FIGURE 9.3
Transshipment Point Destination
Network Representation
Supply Source Demand
of Transshipment
Example New York City
450
(Node 5)
Toronto Chicago
800
(Node 1) (Node 3)

Philadelphia
350
(Node 6)

Detroit Buffalo
700
(Node 2) (Node 4)

St. Louis
300
(Node 7)

A transportation problem with shipped to retail outlets that are the final destinations. Figure 9.3 provides a network representa-
intermediate points is a tion of a transshipment problem. In this example, there are two sources, two transshipment
transshipment problem. points, and three final destinations.

Linear Program for Transshipment Example

Frosty Machines manufactures snow blowers in factories located in Toronto and Detroit. These
are shipped to regional distribution centers in Chicago and Buffalo, where they are delivered to
the supply houses in New York, Philadelphia, and St. Louis, as illustrated in Figure 9.3.
The available supplies at the factories, the demands at the final destination, and shipping
costs are shown in the Table 9.1. Notice that snow blowers may not be shipped directly from
Toronto or Detroit to any of the final destinations but must first go to either Chicago or Buffalo.
This is why Chicago and Buffalo are listed not only as destinations but also as sources.
Frosty would like to minimize the transportation costs associated with shipping suffi-
cient snow blowers to meet the demands at the three destinations while not exceeding the
supply at each factory. Thus, we have supply and demand constraints similar to the trans-
portation problem, but we also have one constraint for each transshipment point indicating
that anything shipped from these to a final destination must have been shipped into that
transshipment point from one of the sources. The verbal statement of this problem would be
as follows:

TABLE 9.1 Frosty Machine Transshipment Data

TO
NEW YORK
FROM CHICAGO BUFFALO CITY PHILADELPHIA ST. LOUIS SUPPLY

Toronto $4 $7 — — — 800
Detroit $5 $7 — — — 700
Chicago — — $6 $4 $5 —
Buffalo — — $2 $3 $4 —
Demand — — 450 350 300
348 CHAPTER 9 • TRANSPORTATION AND ASSIGNMENT MODELS

Minimize cost
subject to
1. The number of units shipped from Toronto is not more than 800
2. The number of units shipped from Detroit is not more than 700
3. The number of units shipped to New York is 450
4. The number of units shipped to Philadelphia is 350
5. The number of units shipped to St. Louis is 300
6. The number of units shipped out of Chicago is equal to the number of units shipped into
Chicago
7. The number of units shipped out of Buffalo is equal to the number of units shipped into
Buffalo

Special transshipment
constraints are used in the linear
program.
The decision variables should represent the number of units shipped from each source to each
transshipment point and the number of units shipped from each transshipment point to each fi-
nal destination, as these are the decisions management must make. The decision variables are
xij = number of units shipped from location (node) i to location (node) j
where
i = 1, 2, 3, 4
j = 3, 4, 5, 6, 7
The numbers are the nodes shown in Figure 9.3, and there is one variable for each arc (route) in
the figure.
The LP model is
Minimize total cost = 4X13 + 7X14 + 5X23 + 7X24 + 6X35 + 4X36
+ 5X37 + 2X45 + 3X46 + 4X47
subject to
X13 + X14 … 800 (Supply at Toronto [node 1])
X23 + X24 … 700 (Supply at Detroit [node 2])
X35 + X45 = 450 (Demand at New York City [node 5])
X36 + X46 = 350 (Demand at Philadelphia [node 6])
X37 + X47 = 300 (Demand at St. Louis [node 7])
X13 + X23 = X35 + X36 + X37 (Shipping through Chicago [node 3])
X14 + X24 = X45 + X46 + X47 (Shipping through Buffalo [node 4])
xij Ú 0 for all i and j
The solution found using Solver in Excel 2010 is shown in Program 9.3. The total cost is $9,550
by shipping 650 units from Toronto to Chicago, 150 unit from Toronto to Buffalo, 300 units
from Detroit to Buffalo, 350 units from Chicago to Philadelphia, 300 from Chicago to St. Louis,
and 450 units from Buffalo to New York City.
While all of these linear programs can be solved using computer software for linear pro-
gramming, some very fast and easy-to-use special-purpose algorithms exist for the transporta-
tion and assignment problems. The rest of this chapter is devoted to these special-purpose
algorithms.

9.5 The Transportation Algorithm

The transportation algorithm is an iterative procedure in which a solution to a transportation
problem is found and evaluated using a special procedure to determine whether the solution is
optimal. If it is optimal, the process stops. If it is not optimal, a new solution is generated. This
new solution is at least as good as the previous one, and it is usually better. This new solution is
then evaluated, and if it is not optimal, another solution is generated. The process continues un-
til the optimal solution is found.