Assignment on

“Transportation model”
Course Title: Supply Chain Management
Course Code: AGBM 327

Submitted to:
Fazlul Hoque
Assistant Professor, Dept. of Agribusiness and Marketing
Sher-e-Bangla Agricultural University

Submitted by:
Md. Aulad Hossain (19-09844)
Faculty: Agribusiness Management
Department: Agricultural Economics
Level: 3, Semester: Ⅰ

Submission Date: 20 July, 2021

 Questions

1. Arong has three milk processing plants such as Savar, Gazipur, NarayanGanj, and has 3
retail centers such as Dhanmondi, Uttara, Jatra Bari. The processing capacity of Savar,
Gazipur, Narayanganj plants are 4000L, 6000L, and 4500L respectively while the
requirement of milk of Dhanmondi, Uttara, Jatrabari respectively 5000L, 3500L, and
5500L. Cost of transportation from Savar to Dhanmondi, Uttara, Jatrabari are Tk 5, Tk 6,
and Tk 8 respectively. The Cost of transportation from Gazipur to Dhanmondi, Uttara,
Jatrabari are Tk 6, Tk 4, and Tk 9 respectively. The cost of transportation from Narayanganj
to Dhanmondi, Uttara, Jatrabari are Tk 7, Tk 8, and Tk 4 respectively.

Determine the best transportation schedule and find initial solution

2. Arong has three milk processing plants such as Savar, Gazipur, NarayanGanj, and has 3
retail centres such as Dhanmondi, Uttara, Jatra Bari. The processing capacity of Savar,
Gazipur, Narayanganj plants are 4000L, 6000L, and 4500L respectively while the
requirement of milk of Dhanmondi, Uttara, Jatrabari respectively 5000L, 4000L, and
5500L. Cost of transportation from Savar to Dhanmondi, Uttara, Jatrabari are Tk 5, Tk 6,
and Tk 8 respectively. The Cost of transportation from Gazipur to Dhanmondi, Uttara,
Jatrabari are Tk 6, Tk 4, and Tk 9 respectively. The cost of transportation from Narayanganj
to Dhanmondi, Uttara, Jatrabari are Tk 7, Tk 8, and Tk 4 respectively.

Determine the best transportation schedule and find out the optimal solution.

3. Arong has three milk processing plants such as Savar, Gazipur, NarayanGanj, and has 3
retail centres such as Dhanmondi, Uttara, Jatra Bari. The processing capacity of Savar,
Gazipur, Narayanganj plants are 4000L, 6000L, and 4500L respectively while the
requirement of milk of Dhanmondi, Uttara, Jatrabari respectively 5000L, 4000L, and
6500L. Cost of transportation from Savar to Dhanmondi, Uttara, Jatrabari are Tk 5, Tk 6,
and Tk 8 respectively. The Cost of transportation from Gazipur to Dhanmondi, Uttara,
Jatrabari are Tk 6, Tk 4, and Tk 9 respectively. The cost of transportation from Narayanganj
to Dhanmondi, Uttara, Jatrabari are Tk 7, Tk 8, and Tk 4 respectively.
Determine the best transportation schedule and find initial solution
 ANSWER
Answer to the Q. No – (1)
The transportation problem deals with the distribution of goods from several points of supply (source) to

a number of points of demand (destinations) where the typical objective is to minimize the total

transportation and production cost. In order to solve the transportation and assignment problems, special

purpose algorithms have been developed that are efficient, and they involves finding an initial solution

and developing improved solutions until an optimal solution is reached. One of the most common

techniques for developing initial solutions is northwest corner method. So, let’s find the best transportation

schedule.

To
Retail Centre at Retail Centre at Retail Centre at Plant Capacity
From Dhanmondi Uttara Jatrabari

Plant Savar 4000 ৳5 ৳6 ৳8 4000

Plant 1000 ৳6 3500 ৳4 1500 ৳9 6000

Gazipur

Plant ৳7 ৳8 4000 ৳4 4500

NarayanGanj
14500
Retail Center 5000 3500 5500
Requirements 14000

Table-1: Transportation Schedule

As we can see from Table-1 for the problem “1”, Demand is less than supply. In order to find an Initial

Solution, we will need a dummy retail store and that will represent a fake retail store requiring 500L of

milk. The initial solution is depicted in the Table-2

To
Retail Centre at Retail Centre at Retail Centre Dummy Plant
From Dhanmondi Uttara at Jatrabari Retail Store Capacity

Plant Savar 4000 ৳5 ৳6 ৳8 ৳0 4000

Plant 1000 ৳6 3500 ৳4 1500 ৳9 ৳0 6000

Gazipur

Plant ৳7 ৳8 4000 ৳4 500 ৳0 4500

NarayanGanj
14500
Retail Center 5000 3500 5500 500
Requirements 14500

Table-2: Initial Solution of Problem 1

Total Cost of Transportation = 5 × 4000 + 6 × 1000 + 4 × 3500 + 9 × 1500 + 4 × 4000

= ৳69500

So the total cost of transportation for Arong is 69500 taka.

 Answer to the Q. No – (2)

Finding the Initial Solution of problem 2 using northwest corner method_

To
Retail Centre at Retail Centre at Retail Centre at Plant Capacity
From Dhanmondi (D) Uttara (U) Jatrabari (J)

Plant Savar 4000 ৳5 ৳6 ৳8 4000

(S)

Plant Gazipur 1000 ৳6 4000 ৳4 1000 ৳9 6000

(G)

Plant ৳7 ৳8 4500 ৳4 4500

NarayanGanj
(N)
14500
Retail Center 5000 4000 5500
Requirements 14500

Table-3: Initial Solution of Problem 2

Total Cost of Transportation = 5 × 4000 + 6 × 1000 + 4 × 4000 + 9 × 1000 + 4 × 4500

= ৳69000

Here,

Number of Row (N.R.) =3

Number of Column (N.C.) =3

Occupied Square (O.S.) = 5

 Condition of improved solution is

N.R. + N.C – 1 ≥ 𝑂𝑂.S.

≫3+3−1 =5

So the improved solution is possible to determine the optimum solution. Let’s look at different

example.

Evaluating the unused Savar-Uttara shipping route (S to U = ISU)

= 6-5+6-4 = +3; which will increase the total cost.

Here the closed path is SU - SD + GD – GU.

Again,

Evaluating the unused Savar-Jatrabari shipping route (S to J = ISJ)

= 8-5+6-9 = 0; where total cost will be same as current route.

Here the closed path is SJ - SD + GD – GJ.

Again,

Evaluating the unused NarayanGanj - Uttara shipping route (N to U = INU)

= 8-4+9-4 = +9; which will increase the total cost.

Here the closed path is NU – GU + GJ – NJ

Lastly,

Evaluating the unused NarayanGanj - Dhanmondi shipping route (N to D = IND)

= 7-6+9-4 = +6; which will increase the total cost.

Here the closed path is ND – GD + GJ – NJ

It is clear from the above calculation that, it is not possible to find a better alternative solution for

transportation which minimize the total cost. So, there is no optimum solution for this problem.
 Answer to the Q. No – (3)
Finding the best transportation schedule of problem 3 using northwest corner method_

To
Retail Centre at Retail Centre at Retail Centre at Plant Capacity
From Dhanmondi Uttara Jatrabari

Plant Savar 4000 ৳5 ৳6 ৳8 4000

Plant Gazipur 1000 ৳6 4000 ৳4 1000 ৳9 6000

Plant ৳7 ৳8 4500 ৳4 4500

NarayanGanj

14500
Retail Center 5000 4000 6500
Requirements 15500

Table-4: Transportation Schedule

As we can see from Table-4 for the problem “3”, Demand is greater than supply. In order to find an

Initial Solution, we will need a dummy plant and that will represent a fake plant with the capacity of

supplying 1000L of milk. The initial solution is depicted in the Table-5.

 To
Retail Centre at Retail Centre at Retail Centre at Plant Capacity
From Dhanmondi Uttara Jatrabari

Plant Savar 4000 ৳5 ৳6 ৳8 4000

Plant Gazipur 1000 ৳6 4000 ৳4 1000 ৳9 6000

Plant ৳7 ৳8 4500 ৳4 4500

NarayanGanj

Dummy Plant ৳0 ৳0 1000 ৳0 1000

15500
Retail Center 5000 4000 6500
Requirements 15500

Table-5: Initial Solution of Problem 3

Total Cost of Transportation = 5 × 4000 + 6 × 1000 + 4 × 4000 + 9 × 1000 + 4 × 4500

= ৳69000

So the total cost of transportation for Arong is 69000 taka.