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Transportation Model

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 Transportation Model
The transportation model is a special class of linear programming that deals with shipping a commodity
from sources (e.g. factories) to destinations (e.g. ware houses)

Objective: The objective is to determine the shipping schedule that minimizes the total shipping cost
while satisfying supply and demand limits. The model assumes that the shipping cost is proportional to
the number of units shipped on a given route.

Definition of the Transportation Model:

Sources Destination
C11: X11
A1 1 1 B1

Units of supply A2 2 2 B2 Units of

demand

Am 3 3 B3
Cmn: Xmn

There are m sources and n destinations, each represented by a node. The arcs represent the routes linking
the sources and the destinations. Arc (i,j) joining source I to destination j carries two pieces of
information : the transportation cost per unit, C i, j and the amount shipped X i, j . The amount of supply
at source i is ai , and the amount of demand at destination j is bj.

The objective of the model is to determine the unknowns X i, j that will minimize the total transportation
cost while satisfying all the supply and demand restrictions.

Formulation of the transportation model: A dairy firm has three plants located through out a state.
Daily milk production at each plant is as follows:
Plant 1-------- 6 million litres
Plant 2-------- 1 million litres
Plant 3-------- 10 million litres

Each day the firm must fulfill the needs of its four distribution centers. Minimum requirements at each
center is as follows:
Distribution Center 1---------- 7 million litres
Distribution Center 2---------- 5 million litres
Distribution Center 3---------- 3 million litres
Distribution Center 4---------- 2 million litres
Cost of shipping one million litres of milk from each plant to each distribution center is given in the
following table in hundreds of rupees.
Distribution Centers
1 2 3 4
1 2 3 11 7
Plants 2 1 0 6 1
3 5 8 15 9

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 Transportation Model
The diary firm wishes to decide as to how much should be the shipment from which plant to which
distribution center so that the cost of shipment may be minimum.
Formulation: Step1: Key decisions is to find the variables which are in the position of X11, X12, X13, X14 ,
X21, X22, X23, X24 , X31, X32, X33, X34. These variables represent the quantities of milk to be
shipped from different plants to different distribution centers and can be represented in the
form of a matrix show below.

1 2 3 4
1 X11 X12 X13 X14
2 X21 X22 X23 X24
3 X31 X32 X33 X34

Step 2: Feasible alternatives are sets of values of X i, j , Where X i, j > 0

Step 3: Objective is to minimize the cost of transportation
i.e. minimize 2X11 + 3X12 + 11 X13 +7X14 +X21 + 0X22 +6X23 +X24 +5X31
+8X32+15X33 +9X34
Step4: The supply constraints are X11 + X12 + X13 +X14 =6
X21 + X22 + X23 +X24 =1
X31 + X32+ X33 + X34 =10
The demand constraints are X11 +X21 +X31 =7
X12 +X22 +X32 =5
X13 +X23+X33 =3
X14+X24 +X34 =2
Thus we have m x n = 3 x 4 =12 Variables and m + n = 7 constraints
Also, the transportation algorithm is based on the assumption that the model is balanced,
meaning that the total demand equals the total supply. If the model is unbalanced, we
can always augment it with a dummy source or a dummy destination to restore balance.
Solution of Transportation model: Problems in Operations Research by Hira and Gupta. Page 407

Solution of Transportation Model:

Transportation Model can be solved by three methods

1. North-West Corner Rule
2. Least Cost Method/ Minimum Cost Method
3. Vogel’s Approximation Method (VAM) method.

Consider the following transportation model:

Example 1:

Distribution Centers
1 2 3 4 Total Supply
1 2 3 11 7 6
Plants 2 1 0 6 1 1
3 5 8 15 9 10

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 Transportation Model
Total 7 5 3 2 17
Demand

Solution:

1. By using North-West Corner Rule

Distribution Centers
1 2 3 4 Total Supply
1 2 3 11 7 6X
(6)
2 1 0 6 1 1X
Plants
(1)
3 5 8 15 9 10/5/2 X
(5) (3) (2)
Total 7/1 5 3 2 17
Demand X X X X

Total Cost: (2 x 6) + (1 x 1) + (8 x 5) + (15 x 3) + (9 x 2) = 116

Test of feasibility: The solution is not feasible, as it does not satisfy the formula
m+n–1
Where, m = number of rows
n = number of columns
So, for this problem, we have number of rows is 3, number of columns is 4.
Hence m + n -1 = 3 + 4 -1 = 6. But total allotment for this problem is 5. So, the
solution is not feasible. It is to be mentioned that for feasibility total allotment
should be equal to m + n -1.

2. By using Least Cost method / Minimum cost method

Distribution Centers
1 2 3 4 Total Supply
1 2 3 11 7 6X
(6)
2 1 0 6 1 1X
Plants
(1)
3 5 8 15 9 10/9/5/3 X
(1) (4) (3) (2)
Total 7/1 5/4 3 2 17
Demand X X X X

Total Cost = (2 x 6) + (0 x 1) + (5 x 1) + (8 x 4) + (15 x 3) + (9 x 2) = 112

The solution is feasible as the total number of allotment is = m + n -1

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 Transportation Model

3. By using Vogel’s Approximation Method (VAM Method)

Table: 1
Distribution Centers
1 2 3 4 Total Supply
1 2 3 11 7 6
(1)
2 1 0 6 1 1X
Plants
(1) (1)
3 5 8 15 9 10
(3)
Total 7 5 3 2/1 17
Demand
(1) (3) (5) (6)

Table: 2
1 2 3 4 Total Supply
1 2 3 11 7 6/1
(5) (1)
Plants
3 5 8 15 9 10
(3)
Total 7 5 3 1 16
Demand X
(3) (5) (4) (2)

Table: 3
1 3 4 Total Supply
1 2 11 7 1X
(1) (5)
Plants
3 5 15 9 10
(3)
Total 7/6 3 1 11
Demand
(3) (4) (2)

Table: 4
1 3 4 Total Supply
3 5 15 9 10/4/1 X
(6) (3) (1)

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 Transportation Model
Total 6 3 1 10
Demand X (3) X

Solution table:
Distribution Centers
1 2 3 4 Total Supply
1 2 3 11 7 6
(1) (5)
2 1 0 6 1 1
Plants
(1)
3 5 8 15 9 10
(6) (3) (1)
Total 7 5 3 2 17
Demand

Total Cost: (2 x 1) + (3 x 5) + (1 x 1) + (5 x 6) + (15 x 3) + (9 x 1)= 102

The solution is also feasible as the total number of allotment is = m + n -1

Optimality Test: U-V method / MODI / Unit Cost Penalty Method

Table 1: Select the cost cells on which we have allotment from the solution table.
Identify rows as U1, U2 & U3.
Also identify columns as V1, V2, and V3 & V4

V1 V2 V3 V4 Total Supply
U1 2 3 6

U2 1 1
Plants
U3 5 15 9 10

Total 7 5 3 2 17
Demand

Equations: U1 + V1 = 2 Let
U1 + V2 = 3 V1 = 0, So that from first Equation U1 + V1 = 2
U2 + V4 = 1 we have U1 = 2
U3 + V1 = 5 similarly by putting the value of U1= 2 in equation
U3 + V3 = 15 U1 + V2 = 3, we have V2 = 1
U3 + V4 = 9 Using the same process we have
U1= 2 V1= 0
U2= -3 V2= 1
U3= 5 V3= 10

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