Introduction To Operation Research

CONTENTS
Unit Contents Page No.
1 OVERVIEW OF OPERATIONS RESEARCH 1-10
2 LINEAR PROGRAMMING PROBLEM (LPP) 11-33
3 TRANSPORTATION PROBLEM 34-95
4 ASSIGNMENT PROBLEM 96-114
5 NETWORK ANALYSIS 115-135

UNIT - I
NOTES
OVERVIEW OF OPERATIONS
RESEARCH
CHAPTER OBJECTIVES
• To familiarize the students with the history of operations research.
• To familiarize the students with the use of operations research techniques
in business domain.
OVERVIEW OF THE CHAPTER

This chapter focuses on the history of the operations research. This chapter
also focuses on meaning and significance of operations research. It also includes
the scope and limitations of operations research. This chapter also elaborates the
applications of operations research in business and management. It reveals the
latest applications operations research.
KEY WORDS
History, scope, significance, applications.
1.1 INTRODUCTION
The British/Europeans refer to "operational research", the Americans to

"operations research" - but both are often shortened to just "OR" (which is the
term we will use). Another term which is used for this field is "management
science" ("MS"). The Americans sometimes combine the terms OR and MS
together and say "OR/MS" or "ORMS". Yet other terms sometimes used are
"industrial engineering"("IE"), "decision science" ("DS"), and “problem solving”.
In recent years there has been a move towards a standardization upon a single
term for the field, namely the term "OR".
The formal activities of Operations Research (OR) were initiated in England
during World War II when a team of British scientists set out to make decisions
regarding the best utilization of war material. Following the end of the war, the
ideas advanced in military operations were adapted to improve efficiency and
productivity in the civilian sector. Today, OR is a dominant decision making tool.
Operations OVERVIEW OF
OPERATIONS
The activities carried out in an organization.
RESEARCH 1
Research
The process of observation and testing characterized by the scientific
method. Situation, problem statement, model construction, validation,
NOTES experimentation, candidate solutions.
Meaning of Operations Research

Defining OR is difficult task as its boundaries and content are not yet fixed.
It can be regarded as use of mathematical and quantitative techniques to
substantiate the decision being taken. Further, it is multidisciplinary which takes
tools from subjects like mathematics, statistics, engineering, economics,
psychology etc. and uses them to score the consequences of possible alternative
actions. Today it has become professional discipline that deals with the
application of scientific methods to decision-making.
Definition of Operations Research (OR)

“OR is concerned with scientifically deciding how to best design and
operate man-machine system usually requiring the allocation of scare resources.”
Operations Research Society, America
“OR is essentially a collection of mathematical techniques and tools which
in conjunction with system approach, are applied to solve practical decision
problems of an economic or engineering nature’’.
Daellenbach and George
“OR utilizes the planned approach (updated scientific method) and an
interdisciplinary team in order to represent complex functional relationships as
mathematical models for the purpose of providing a quantitative analysis’’.
Thieraub and Klekamp
“OR is a scientific knowledge through interdisciplinary team effort for the
purpose of determining the best utilization of limited resources.”
H.A. Taha
“OR is a scientific approach to problem solving for executive management”.
H.M. Wagner
1.2 ORIGIN AND DEVELOPMENT OF OPERATIONS

RESEARCH (OR)
Operations Research is a ‘war baby’. It is because, the first problem

attempted to solve in a systematic way was concerned with how to set the time
OVERVIEW OF fuse bomb to be dropped from an aircraft on to a submarine. In fact, the main
OPERATIONS
2 RESEARCH origin of Operations Research was during the Second World War. At the time of
Second World War, the military management in England invited a team of
scientists to study the strategic and tactical problems related to air and land
defense of the country. The problem attained importance because at that time the
resources available with England was very limited and the objective was to win NOTES
the war with available meager resources. The resources such as food, medicines,
ammunition, manpower etc., were required to manage war and for the use of the
population of the country. It was necessary to decide upon the most effective
utilization of the available resources to achieve the objective. It was also
necessary to utilize the military resources cautiously. Hence, the Generals of
military, invited a team of experts in various walks of life such as scientists,
doctors, mathematicians, business people, professors, engineers etc., and the
problem of resource utilization is given to them to discuss and come out with a
feasible solution. These specialists had a brain storming session and came out
with a method of solving the problem, which they coined the name “Linear
Programming”. This method worked out well in solving the war problem. As
the name indicates, the word Operations is used to refer to the problems of
military and the word Research is use for inventing new method. As this method
of solving the problem was invented during the war period, the subject is given
the name ‘OPERATIONS RESEARCH’ and abbreviated as ‘O.R.’ After the
World War there was a scarcity of industrial material and industrial productivity
reached the lowest level. Industrial recession was there and to solve the industrial
problem the method linear programming was used to get optimal solution. From
then on words, lot of work done in the field and today the subject of O.R. have
numerous methods to solve different types of problems. After seeing the success
of British military, the United States military management started applying the
techniques to various activities to solve military, civil and industrial problems.
They have given various names to this discipline. Some of them are Operational
Analysis, Operations Evaluation, Operations Research, System Analysis, System
Evaluation, Systems Research, Quantitative methods, Optimization Techniques
and Management Science etc. But most widely used one is Operations Research.
In industrial world, most important problem for which these techniques used is
how to optimize the profit or how to reduce the costs. The introduction of Linear
Programming and Simplex method of solution developed by American
Mathematician George B. Dontzig in 1947 given an opening to go for new
techniques and applications through the efforts and co-operation of interested
individuals in academic field and industrial field. Today the scenario is totally
different. A large number of Operations Research consultants are available to
deal with different types of problems. In India also, we have O.R. Society of
India (1959) to help in solving various problems. Today the Operations Research
techniques are taught at High School levels. To quote some Indian industries,
which uses Operations Research for problem solving are: M/S Delhi Cloth Mills, OVERVIEW OF
Indian Railways, Indian Airline, Hindustan Lever, Tata Iron and Steel Company, OPERATIONS
RESEARCH 3
Fertilizers Corporation of India and Defense Organizations. In all the above
organizations, Operations Research people act as staff to support line managers
in taking decisions. In one word we can say that Operations Research play a vital
NOTES role in every organization, especially in decision-making process.
1.3 SIGNIFICANCE OF OPERATIONS RESEARCH
The significant features of operations research include the followings:

(i) Decision-making. Every industrial organization faces multifaceted
problems to identify best possible solution to their problems. OR aims
to help the executives to obtain optimal solution with the use of OR
techniques. It also helps the decision maker to improve his creative
and judicious capabilities, analyze and understand the problem
situation leading to better control, better co-ordination, better systems
and finally better decisions.
(ii) Scientific Approach. OR applies scientific methods, techniques and
tools for the purpose of analysis and solution of the complex problems.
In this approach there is no place for guess work and the person bias
of the decision maker.
(iii) Inter-disciplinary Team Approach. Basically the industrial problems
are of complex nature and therefore require a team effort to handle it.
This team comprises of scientist/mathematician and technocrats. Who
jointly use the OR tools to obtain an optimal solution of the problem
(iv) System Approach. The main aim of the system approach is to trace
for each proposal all significant and indirect effects on all sub-system
on a system and to evaluate each action in terms of effects for the
system as a whole. The interrelationship and interaction of each sub-
system can be handled with the help of mathematical/analytical models
of OR to obtain acceptable solution.
(v) Use of Computers. The models of OR need lot of computation and
therefore, the use of computers becomes necessary. With the use of
computers, it is possible to handle complex problems requiring large
amount of calculations.
1.4 SCOPE OF OPERATIONS RESEARCH
The scope of OR is not only confined to any specific agency like defence
OVERVIEW OF services but today it iswidely used in all industrial organizations. It can be used
OPERATIONS to find the best solution to any problem be it simple or complex. It is useful in
4 RESEARCH
every field of human activities, where optimization of resources is required in
the best way. Thus, it attempts to resolve the conflicts of interest among the
components of organization in a way that is best for the organization as a whole.
The main fields where OR is extensively used are given below, however, this list NOTES
is not exhaustive but only illustrative.
(i) National Planning and Budgeting
OR is used for the preparation of Five Year Plans, annual budgets,
forecasting of income and expenditure, scheduling of major projects
of national importance, estimation of GNP, GDP, population,
employment and generation of agriculture yields etc.
(ii) Defence Services

Basically formulation of OR started from USA army, so it has wide
application in the areas such as:development of new technology,
optimization of cost and time, tender evaluation, setting and layoutsof
defence projects, assessment of “Threat analysis”, strategy of battle,
effective maintenance and replacement of equipment, inventory
control, transportation and supply depots etc.
(iii) Industrial Establishment and Private Sector Units

OR can be effectively used in plant location and setting finance
planning, product and process planning, facility planning and
construction, production planning and control, purchasing,
maintenance management and personnel management etc. to name a
few.
(iv) R & D and Engineering

Research and development being the heart of technological growth,
OR has wide scope for and can be applied in technology forecasting
and evaluation, technology and project management, preparation of
tender and negotiation, value engineering, work/method study and so
on.
(v) Business Management and Competition

OR can help in taking business decisions under risk and uncertainty,
capital investment and returns, business strategy formation, optimum
advertisement outlay, optimum sales force and their distribution,
market survey and analysis and market research techniques etc.
(vi) Agriculture and Irrigation

In the area of agriculture and irrigation also OR can be useful for
project management, construction of major dams at minimum cost,
optimum allocation of supply and collection points for fertilizer/seeds OVERVIEW OF
and agriculture outputs and optimum mix of fertilizers for better yield. OPERATIONS
RESEARCH 5
(vii) Education and Training
OR can be used for obtaining optimum number of schools with their
locations, optimum mix of Students/teacher student ratio, optimum
NOTES financial outlay and other relevant information in training of graduates
to meet out the national requirements.
(viii) Transportation
Transportation models of OR can be applied to real life problems to
forecast public transport requirements, optimum routing, forecasting
of income and expenses, project management for railways, railway
network distribution, etc. In the same way it can be useful in the field
of communication.
(ix) Home Management and Budgeting

OR can be effectively used for control of expenses to maximize
savings, time management, work study methods for all related works.
Investment of surplus budget, appropriate insurance of life and
properties and estimate of depreciation and optimum premium of
insurance etc.
1.5 ADVANTAGES AND LIMITATIONS OF OPERATIONS

RESEARCH
I) ADVANTAGES
Following are the advantages of Operations Research
1. Effective Decisions
Operations Research (OR) helps the managers to take better and
quicker decisions. It increases the number of alternatives. It helps the
managers to evaluate the risk and results of all the alternative
decisions. So, OR makes the decisions more effective.
2. Better Coordination
Operations Research (OR) helps to coordinate all the decisions of the
organisation. It coordinates all the decisions taken by the different
levels of management and the various departments of the organisation.
For e.g. It coordinates the decisions taken by the production
department with the decisions taken by the marketing department.
3. Facilitates Control
Operations Research (OR) helps the manager to control his
subordinates. It helps the manager to decide which work is most
OVERVIEW OF important. The manager does the most important work himself, and
OPERATIONS he delegates the less important work to his subordinates.
6 RESEARCH
Operations Research (OR) helps a manager to fix standards for all the
work. It helps him to measure the performance of the subordinates. It
helps the manager to find out and correct the deviations (difference)
in the performance. So, OR facilitates control. NOTES
4. Improves Productivity
Operations Research (OR) helps to improve the productivity of the
organisation. It helps to decide about the selection, location and size
of the factories, warehouses, etc. It helps in inventory control. It helps
in production planning and control. It also helps in manpower
planning. OR is used in expansion, modernisation, installation of
technology, etc. OR uses many different mathematical and statistical
techniques to improve productivity. Simulation is used by many
organisations to improve their productivity. That is, they try out many
production improvement techniques on a small scale. If these
techniques are successful then they are used on a large scale.
II) LIMITATIONS OF OPERATIONS RESEARCH

OR has some limitations however, these are related to the problem of model
building and the time and money factors involved in application rather than its
practical utility. Some of them are as follows:
(i) Magnitude of Computation. Operations research models try to find
out optimal solution taking into account all the factors. These factors
are enormous and expressing them in quantity and establishing
relationships among these require voluminous calculations which can
be handled by computers.
(ii) Non-Quantifiable Factors. OR provides solution only when all
elements related to a problem can be quantified. All relevant variables
do not lend themselves to quantification. Factors which cannot be
quantified, find no place in OR study. Models in OR do not take into
account qualitative factors or emotional factors which may be quite
important.
(iii) Distance between User and Analyst. OR being specialist’s job
requires a mathematician or statistician, who might not be aware of
the business problems. Similarly, a manager fails to understand the
complex working of OR. Thus there is a gap between the two.
Management itself may offer a lot of resistance due to conventional
thinking.
(iv) Time and Money Costs. When basic data are subjected to frequent
changes, incorporating them into the OR models is a costly
proposition. Moreover, a fairly good solution at present may be more
desirable than a perfect OR solution available after sometime. The
computational time increases depending upon the size of the problem OVERVIEW OF
and accuracy of results desired. OPERATIONS
RESEARCH 7
(v) Implementation. Implementation of any decision is a delicate task. It
must take into account the complexities of human relations and
behavior. Sometimes, resistance is offered due to psychological factors
NOTES which may not have any bearing on the problem as well as its solution.
1.6 APPLICATIONS OF OPERATIONS RESEARCH
Today, almost all fields of business and government utilizing the benefits
of Operations Research. There are voluminous of applications of Operations
Research. Although it is not feasible to cover all applications of O.R. in brief.
The following are the abbreviated set of typical operations research applications
to show how widely these techniques are used today:
1. Accounting:
• Assigning audit teams effectively Credit policy analysis
• Cash flow planning
• Developing standard costs
• Establishing costs for byproducts
• Planning of delinquent account strategy
2. Construction:
• Project scheduling, monitoring and control
• Determination of proper work force
• Deployment of work force
• Allocation of resources to projects.
3. Facilities Planning:
• Factory location and size decision
• Estimation of number of facilities required
• Hospital planning
• Quantitative Techniques for Managers
• International logistic system design
• Transportation loading and unloading
• Warehouse location decision
4. Finance:
• Building cash management models
• Allocating capital among various alternatives
• Building financial planning models
OVERVIEW OF
OPERATIONS • Investment analysis
8 RESEARCH
• Portfolio analysis
• Dividend policy making
4. Manufacturing: NOTES
• Inventory control
• Marketing balance projection
• Production scheduling
• Production smoothing
5. Marketing:
• Advertising budget allocation
• Product introduction timing
• Selection of Product mix
• Deciding most effective packaging alternative
6. Organizational Behavior / Human Resources:

• Personnel planning
• Recruitment of employees
• Skill balancing
• Training program scheduling
• Designing organizational structure more effectively
7. Purchasing:
• Optimal buying
• Optimal reordering
• Materials transfer
8. Research and Development:

• R & D Projects control
• R & D Budget allocation
• Planning of Product introduction
1.7 LATEST APPLICATIONS OF OPERATIONS RESEARCH
Following are the latest applications of Operations Research.

1. Capital budgeting.
2. Asset allocation.
3. Portfolio selection. OVERVIEW OF
OPERATIONS
4. Fraud prevention, RESEARCH 9
5. Anti-Money Laundering.
6. Benchmarking.
7. Marketing channel optimization,
NOTES
8. Customer segmentation.
9. Direct marketing campaigns,
10. Predicting customer response,
11. Campaign optimization.
12. Supply Chain Planning.
13. Distribution, Routing, Scheduling,
14. Traffic flow optimization.
15. Resource allocation,
16. Staff allocation.
17. Inventory planning.
18. Retail planning,
19. Merchandize optimization.
20. Product mix and blending,
21. Industrial waste reduction.
EXERCISE
1. Trace the history of Operations Research.
2. Give a brief account of history of Operations Research.
3. "Operations Research is a bunch of mathematical techniques to break
industrial problems”. Critically comment.
4. Briefly explain the significance of Operations Research.
5. Discuss the scope of Operations Research.
6. State and explain the limitations of Operations Research
7. Discuss applications of Operations Research with suitable examples.
*****
OVERVIEW OF
OPERATIONS
10 RESEARCH
UNIT - II NOTES
LINEAR PROGRAMMING
PROBLEM (LPP)
CHAPTER OBJECTIVES
1. To familiarize the students with the components of LPP.
2. To familiarize the students with the formulation of LPP.
3. To develop the quantitative skills of the students to make them skilled
at using graphical method of solving LPP.

This chapter puts lights on Linear programming Problem, its formulation,
Graphical Solution of LPP including its procedure. Applications and Limitations
of LPP are discussed in this chapter.
KEY WORDS
Linear programming Problem, Formulation, Graphical Solution
INTRODUCTION
Linear programming (LP) is one of the simplest ways to perform
optimization. It helps you solve some very complex optimization problems by
making a few simplifying assumptions. As an analyst you are bound to come
across applications and problems to be solved by Linear Programming
2.1 DEFINITIONS OF LPP
Linear programming is a mathematical method that is used to determine the

best possible outcome or solution from a given set of parameters or list of
requirements, which are represented in the form of linear relationships. It is most
often used in computer modeling or simulation in order to find the best solution
in allocating finite resources such as money, energy, manpower, machine
resources, time, space and many other variables. In most cases, the "best
outcome" needed from linear programming is maximum profit or lowest
cost.Because of its nature, linear programming is also called linear optimization.
LINEAR
Linear programming can be defined as: “A mathematical method to allocate
PROGRAMMING
scarce resources to competing activities in an optimal manner when the problem PROBLEM (LPP) 11
can be expressed using a linear objective function and linear inequality
constraints.”
A linear program consists of a set of variables, a linear objective function
NOTES indicating the contribution of each variable to the desired outcome, and a set of
linear constraints describing the limits on the values of the variables. The
“answer” to a linear program is a set of values for the problem variables that
results in the best — largest or smallest — value of the objective function and
yet is consistent with all the constraints. Formulation is the process of translating
a real-world problem into a linear program. Once a problem has been formulated
as a linear program, a computer program can be used to solve the problem. In
this regard, solving a linear program is relatively easy. The hardest part about
applying linear programming is formulating the problem and interpreting the
solution.
2.2 COMPONENTS OF LPP
1. Linear Equations
All of the equations and inequalities in a linear program must, by definition,
be linear. A linear function has the following form: a0 + a1 x1 + a2 x2 + a3 x3
+. . + anxn = 0----(where 1,2,3,---n as subscript.)
In general, the a’s are called the coefficients of the equation; they are also
sometimes called parameters. The important thing to know about the coefficients
is that they are fixed values, based on the underlying nature of the problem being
solved. The x’s are called the variables of the equation; they are allowed to take
on a range of values within the limits defined by the constraints. Note that it is
not necessary to always use x’s to represent variables; any label could be used,
and more descriptive labels are often more useful.
Linear equations and inequalities are often written using summation
notation, which makes it possible to write an equation in a much more compact
form. The linear equation above, for example, can be written as follows:
Note that the letter i is an index, or counter, that starts in this case at 1 and
runs to n. There is a term in the sum for each value of the index. Just as a variable
does not have to be specified with a letter x, the index does not have to be a letter
i. Summation notation will be used a lot in the rest of this chapter and in all of
the remaining chapters. You will need to become adept at interpreting it.
2. The Decision Variables

The variables in a linear program are a set of quantities that need to be
determined in order to solve the problem; i.e., the problem is solved when the
LINEAR best values of the variables have been identified. The variables are sometimes
PROGRAMMING called decision variables because the problem is to decide what value each
12 PROBLEM (LPP)
variable should take. Typically, the variables represent the amount of a resource
to use or the level of some activity. For example, a variable might represent the
number of acres to cut from a particular part of the forest during a given period.
Frequently, defining the variables of the problem is one of the hardest and/or NOTES
most crucial steps in formulating a problem as a linear program. Sometimes
creative variable definition can be used to dramatically reduce the size of the
problem or make an otherwise non-linear problem linear.
As mentioned earlier, a variety of symbols, with subscripts and superscripts
as needed, can be used to represent the variables of an LP. As a general rule, it
is better to use variable names that help you remember what the variable
represents in the real world. For this general introduction, the variables will be
represented — very abstractly — as x1, x2, . . ., xn . (where 1, 2,….,n as
subscript.) (Note that there are n variables in this list.)
3. The Objective Function

The objective of a linear programming problem will be to maximize or to
minimize some numerical value. This value may be the expected net present
value of a project or a forest property; or it may be the cost of a project; it could
also be the amount of wood produced, the expected number of visitor-days at a
park, the number of endangered species that will be saved, or the amount of a
particular type of habitat to be maintained. Linear programming is an extremely
general technique, and its applications are limited mainly by our imaginations
and our ingenuity. The objective function indicates how much each variable
contributes to the value to be optimized in the problem. The objective function
takes the following general form:
Where,
ci = the objective function coefficient corresponding to the ith variable, and
Xi = the ith decision variable.
The coefficients of the objective function indicate the contribution to the
value of the objective function of one unit of the corresponding variable. For
example, if the objective function is to maximize the present value of a project,
and Xi is the ith possible activity in the project, then ci (the objective function
coefficient corresponding to Xi ) gives the net present value generated by one
unit of activity i. As another example, if the problem is to minimize the cost of
achieving some goal, Xi might be the amount of resource i used in achieving the
goal. In this case, ci would be the cost of using one unit of resource i.
4. The Constraints
The constraints indicate limitations on the resources, which are to be
LINEAR
allocated among various decision variables. These resources may be production
PROGRAMMING
capacity, manpower, time, space or machinery. These must be capable of being PROBLEM (LPP) 13
expressed as linear equation (i.e. =) on inequalities (i.e. > or<; type) in terms of
decision variables. Thus, constraints of a linear programming problem are linear
equalities or inequalities arising out of practical limitations.
NOTES
5. The Non-Negativity Constraints
For technical reasons beyond the scope of this book, the variables of linear
programs must always take non-negative values (i.e., they must be greater than
or equal to zero). In most cases, where, for example, the variables might
represent the levels of a set of activities or the amounts of some resource used,
this non-negativity requirement will be reasonable – even necessary. In the rare
case where you actually want to allow a variable to take on a negative value there
are certain formulation “tricks” that can be employed. These “tricks” also are
beyond the scope of this class, however, and all of the variables we will use will
only need to take on non-negative values. In any case, the non-negativity
constraints are part of all LP formulations, and you should always include them
in an LP formulation. They are written as follows:
xi ≠ 0 i = 1, 2, . . ., n
where xi = the ith decision variable.
6. Feasible Solution
Any solution to graphical method of L.P.P. which satisfies the non-
negativity restrictions of the problem is called a feasible solution to a general
L.P.P.
7. Optimum solution
Any feasible solution to graphical method of L.P.P. which optimizes
(maximizes/ minimizes) the objective function of L.P.P. is called an optimum
solution to the L.L.P.
2.3 FORMULATION OF LPP
It consists the following steps

Step 1. Identify decision variables
Step 2. Write objective function
Step 3. Formulate constraints
For the formulation of LPP consider the following example of furniture
dealer.
Example 1.
LINEAR
PROGRAMMING A furniture dealer deals in only two items–tables and chairs. He has Rs
14 PROBLEM (LPP) 50,000 to invest and has storage space of at most 60 pieces. A table costs Rs 2500
and a chair Rs 500. He estimates that from the sale of one table, he can make a
profit of Rs 250 and that from the sale of one chair a profit of Rs 75. He wants
to know how many tables and chairs he should buy from the available money so
as to maximize his total profit, assuming that he can sell all the items which he NOTES
buys.
In this example, we observe the following
(i) The dealer can invest his money in buying tables or chairs or
combination thereof. Further he would earn different profits by
following different investment strategies.
(ii) There are certain overriding conditions or constraints viz., his
investment is limited to a maximum of Rs 50,000 and so is his storage
space which is for a maximum of 60 pieces.
Situation 1:
Suppose he decides to buy tables only and no chairs, so he can buy 50000
÷ 2500, i.e., 20 tables. His profit in this case will be Rs (250 × 20), i.e., Rs 5000.
Situation 2:
Suppose he chooses to buy chairs only and no tables. With his capital of Rs
50,000, he can buy 50000 ÷ 500, i.e. 100 chairs.
But he can store only 60 pieces. Therefore, he is forced to buy only 60 chairs
which will give him a total profit of Rs (60 × 75), i.e., Rs 4500.
There are many other possibilities, for instance, he may choose to buy 10
tables and 50 chairs, as he can store only 60 pieces. Total profit in this case would
be Rs (10 × 250 + 50 × 75), i.e., Rs 6250 and so on.
We, thus, find that the dealer can invest his money in different ways and he
would earn different profits by following different investment strategies. Now
the problem is: How should he invest his money in order to get maximum profit?
To answer this question, let us try to formulate the problem mathematically.
Mathematical formulation of the problem

Let x be the number of tables and y be the number of chairs that the dealer
buys. Obviously, x and y must be non-negative,
i.e., x, ≥ 0 ... (1) (Non-negative constraint)
y≥0… (2) (Non-negative constraint)
The dealer is constrained by the maximum amount he can invest (Here it
is Rs 50,000) and by the maximum number of items he can store (Here it is 60).
Stated mathematically,
2500x + 500y ≤ 50000
LINEAR
or 5x + y ≤ 100 ... (3) (investment constraint) PROGRAMMING
PROBLEM (LPP) 15
and x + y ≤ 60 ... (4)(storage constraint)
The dealer wants to invest in such a way so as to maximize his profit, say,
Z which stated as a function of x and y is given by
NOTES
Z = 250x + 75y... (5) (objective function)
Mathematically, the given problems now reduce to:
Maximize Z = 250x + 75y
subject to the constraints:
5x + y ≤ 100
x + y ≤ 60
x ≥ 0, y ≥ 0
So, we have to maximize the linear function Z subject to certain conditions
determined by a set of linear inequalities with variables as non-negative.
We have to consider the following conditions

• Objective function: Z = ax + by, where a, b are constants, which has to
be maximized or minimized is called a linear objective function.
In the above example, Z = 250x + 75y is a linear objective function.
• Decision Variables: Variables x and y are called decision variables.
• Constraints: The linear inequalities or equations or restrictions on the
variables of a linear programming problem are called constraints. The
conditions x ≥ 0, y ≥ 0 are called non-negative restrictions.
In the above example, the set of inequalities (1) to (4) are constraints.
Example 2
A firm produces three products. These products are processed on three
different machines. The time required to manufacture one unit of each of the
three products and the daily capacity of the three machines are given in the table
below:
LINEAR It is required to determine the daily number of units to be manufactured for

PROGRAMMING each product. The profit per unit for product 1, 2 and 3 is Rs. 4, Rs.3 and Rs.6
16 PROBLEM (LPP) respectively. It is assumed that all the amounts produced are consumed in the
market. Formulate the mathematical (L.P.) model that will maximize the daily
profit.
Formulation of Linear Programming Model NOTES

Step 1: From the study of the situation find the key-decision to be made. In
the given situation key decision is to decide the extent of products 1, 2 and 3, as
the extents are permitted to vary.
Step 2: Assume symbols for variable quantities noticed in step 1. Let the
extents (amounts) of products 1, 2 and 3 manufactured daily be x1, x2 and x3
units respectively.
Step 3: Express the feasible alternatives mathematically in terms of
variable. Feasible alternatives are those which are physically, economically and
financially possible. In the given situation feasible alternatives are sets of values
of x1, x2 and x3 units respectively.
Where, X1, X2 and X3 ≥ 0.
since negative production has no meaning and is not feasible.
Step 4: Mention the objective function quantitatively and express it as a
linear function of variables. In the present situation, objective is to maximize the
profit.
i.e., Maximize Z = 4X1+ 3X2 + 6X3
Step 5: Put into words the influencing factors or constraints. These occur
generally because of constraints on availability (resources) or requirements
(demands). Express these constraints also as linear equations/inequalities in terms
of variables. Here, constraints are on the machine capacities and can be
mathematically expressed as,
Example 3
A factory manufactures two products Table (A) and Chairs (B). For
manufacturing one unit of A, 15 machine hours and 25 labour hours are required.
For manufacturing product B, 25 machine hours and 15 labour hours are required.
In a month, 300 machine hours and 240 labour hours are available. Profit per LINEAR
unit for A is Rs. 50 and for B is Rs. 40. Formulate as LPP to maximize the profit. PROGRAMMING
PROBLEM (LPP) 17
NOTES
Solution: Formulation of LPP:

1. The objective is to maximize the total profit by selling units of
Table(X) and Chair(Y) which are produced under the given production
machine and labour constraints.
2. Decision Variables:
Let X1 be the total units of table to be manufactured.
and X2 be the total units of chair to be manufactured.
3. Objective function: Total Profit (Z = 50X1 + 40X2) must be
maximized. Thus,
Maximize P= 50X1 + 40X2 is the objective function.
4. Constraints:
(i) Machine Constraints: Total hours available for machine (i.e.
15X1+ 25X2 must be less than or equal to the time available i.e.
300 hours. Thus,
15X1+ 25X2 ≤ 300
(ii) Labour Constraints: Total hours available for labour (i.e. 25X1+
15X2must be less than or equal to the time available i.e. 240
hours. Thus,
25X1+ 15X2 ≤ 240
Thus the LPP format is,
LINEAR
PROGRAMMING
18 PROBLEM (LPP)
2.4 SOLUTION OF LPP: GRAPHICAL SOLUTION OF LPP
NOTES
Procedure of solving LPP by Graphical Method
The steps involved in Graphical method of solving a LPP
Graphical Solution for the problem of Maximization
Example 4
We will now solve this problem graphically. Let us graph the constraints
stated as linear inequalities: 5x + y ≤ 100 ... (1)
x + y ≤ 60 ... (2)
x ≥ 0 ... (3)
y ≥ 0 ... (4)
Step I: Convert the given inequalities into equalities:
5x + y = 100 ...(1)
x + y = 60 ...(2)
x = 0 ... (3) LINEAR
PROGRAMMING
y = 0 ... (4)
PROBLEM (LPP) 19
Step II: To find the coordinates of each line equation.
Consider
5x + y = 100 ...(1)
NOTES
Let us consider y = 0
5x = 100
x = 100 / 5
x = 20
Now, let us consider x = 0
y = 100
Therefore, the coordinates of the line 5x + y = 100 are (20, 100)
Consider
x + y = 60 ...(2)
x = 60
y = 60
Step III: To plot a graph.
LINEAR
PROGRAMMING
20 PROBLEM (LPP)
Step IV: To find the common feasible region.
The graph of this system (shaded region) consists of the points common to
all half planes determined by the inequalities. Each point in this region represents
a feasible choice open to the dealer for investing in tables and chairs. The region, NOTES
therefore, is called the feasible region for the problem. Every point of this region
is called a feasible solution to the problem. Thus, we have, Feasible region The
common region determined by all the constraints including non-negative
constraints x, y ≥ 0 of a linear programming problem is called the feasible region
(or solution region) for the problem. In above figure the region OAED (shaded)
is the feasible region for the problem. The region other than feasible region is
called an infeasible region.
Feasible solutions point within and on the boundary of the feasible region
represent feasible solutions of the constraints. In the fig, every point within and
on the boundary of the feasible region OAED represents feasible solution to the
problem. For example, the point (10, 50) is a feasible solution of the problem
and so are the points(0, 60), (20, 0) etc.
Any point outside the feasible region is called an infeasible solution. For
example, the point (60, 0) and the point (0, 100) are infeasible solutions ofthe
problem.
Therefore, the common feasible region is OAED
Step V: Optimum solution
Any point in the feasible region that gives the optimal value (maximum or
minimum) of the objective function is called an optimal solution. Now, we see
that every point in the feasible region OAED satisfies all the constraints as given
in (1) to (4), and since there are infinitely many points, it is not evident how we
should go about finding a point that gives a maximum value of the objective
function Z = 250x + 75y. To handle this situation, we use the following theorems
LINEAR
which are fundamental in solving linear programming problems.
PROGRAMMING
PROBLEM (LPP) 21
NOTES
The maximum profit to the dealer i.e. Rs 6250 results from the investment
strategy (10, 50), i.e. buying 10 tables and 50 chairs.
Theorem 1: Let R be the feasible region (convex polygon) for a linear
programming problem and let Z = ax + by be the objective function. When Z has
an optimal value (maximum or minimum), where the variables x and y are subject
to constraints described by linear inequalities, this optimal value must occur at a
corner point* (vertex) of the feasible region.
Theorem 2:Let R be the feasible region for a linear programming problem,
and let Z = ax + by be the objective function. If R is bounded**, then the
objective function Z has both a maximum and a minimum value on R and each
of these occurs at a corner point (vertex) of R.
Remark: If R is unbounded, then a maximum or a minimum value of the
objective function may not exist. However, if it exists, it must occur at a corner
point of R. (By Theorem 1). In the above example, the corner points (vertices)
of the bounded (feasible) region are: O, A, B and C and it is easy to find their
coordinates as (0, 0), (20, 0), (10, 50) and (0, 60) respectively.
Example 5:
stated as linear inequalities:
5x + 10y ≤ 2500 ... (1)
2x + 10y ≤ 1000 ...(2)
LINEAR x + 2y ≤ 4000 ...(3)
PROGRAMMING x, y ≥ 0 ... (4)
22 PROBLEM (LPP)
Step I: Convert the given inequalities into equalities
5x + 10y = 2500 ... (1)
2x + 10y =1000 ...(2)
NOTES
x + 2y = 4000 ...(3)
x, y = 0 ... (4)

Consider
5x + 10y = 2500...(1)
5x = 2500
x = 2500 / 5
x = 500
10y = 2500
y = 2500 / 10
y = 250
Therefore, the coordinates of the line 5x + 10y = 2500 are (500, 250)
Consider
2x + 10y =1000 ...(2)
2x = 1000
x = 1000 / 2
x = 500
10y = 1000
y = 1000 / 10
y = 100
Therefore, the coordinates of the line 2x + 10y =1000 are (500, 100)
Consider
x + 2y = 4000 ... (3)
x = 4000 LINEAR
PROGRAMMING
Now, let us consider x = 0 PROBLEM (LPP) 23
2y = 4000
y = 4000 / 2
y = 2000
NOTES
Therefore, the coordinates of the line x + 2y = 4000 are (4000, 2000)

The common feasible region is OACD
LINEAR
PROGRAMMING
24 PROBLEM (LPP)
Here are multiple solutions but the coordinates of the line are same.
NOTES
Example 6
stated as linear inequalities:
2x + 10y ≤ 500 ... (1)
4x + 5y ≤ 200 ...(2)
3x + y ≤ 300 ...(3)
x, y ≥ 0 ... (4)
Step I: Convert the given inequalities into equalities

2x + 10y = 500 ... (1)
4x + 5y =200 ...(2)
3x + y = 300 ...(3)
x, y ≥ 0 ... (4)

Consider
2x + 10y = 500 ...... (1)
2x = 500
x = 500 / 2
LINEAR
x = 250 PROGRAMMING
PROBLEM (LPP) 25
10y = 500
y = 500 / 10
NOTES
y = 50
Therefore, the coordinates of the line 2x + 10y = 500are (250, 50)
Consider
4x + 5y =200 ...(2)
4x = 200
x = 200 / 4
x = 50
5y = 200
y = 200 / 5
y = 20
Therefore, the coordinates of the line 4x + 5y =200 are (50, 20)
Consider
3x + y = 300 ... (3)
3x = 300
x = 300 / 3
x = 100
y = 300
LINEAR
PROGRAMMING
26 PROBLEM (LPP)
NOTES

The common feasible region is OCD
Here are multiple solutions but the coordinates of the line are same.
Example on Minimization
Example 7: Solve the following LPP graphically:
LINEAR
Minimize Z = 200 x + 500 y
PROGRAMMING
PROBLEM (LPP) 27
x + 2y ≥ 10
3x + 4y ≤ 24
NOTES
x ≥ 0, y ≥ 0
Solution:
We will now solve this problem graphically.
Given:
Minimize Z = 200 x + 500 y ... (1)
x + 2y ≥ 10 … (2)
3x + 4y ≤ 24 … (3)
x ≥ 0, y ≥ 0 …(4)
Let us graph the constraints stated as linear inequalities

The shaded region in Fig. is the feasible region ABC determined by the
system of constraints (2) to (4), which is bounded.
The coordinates of corner points
LINEAR
PROGRAMMING
28 PROBLEM (LPP)
Minimum value i.e. 2300.
A, B and C are (0,5), (4,3) and (0,6) respectively. Now we evaluate Z =
200x + 500y at these points.
NOTES
Hence, minimum value of Z is 2300 attained at the point (4, 3)
2.5 APPLICATIONS AND LIMITATIONS OF LPP
A) APPLICATIONS OF LPP
1. Food and Agriculture
Farmers apply linear programming techniques to their work. By
determining what crops they should grow, the quantity of it and how
to use it efficiently, farmers can increase their revenue.
In nutrition, linear programming provides a powerful tool to aid in
planning for dietary needs. In order to provide healthy, low-cost food
baskets for needy families, nutritionists can use linear programming.
Constraints may include dietary guidelines, nutrient guidance, cultural
acceptability or some combination thereof. Mathematical modeling
provides assistance to calculate the foods needed to provide nutrition
at low cost, in order to prevent no communicable disease. Unprocessed
food data and prices are needed for such calculations, all while
respecting the cultural aspects of the food types. The objective function
is the total cost of the food basket. Linear programming also allows
time variations for the frequency of making such food baskets.
2. Applications in Engineering
Engineers also use linear programming to help solve design and
manufacturing problems. For example, in airfoil meshes, engineers
seek aerodynamic shape optimization. This allows for the reduction
of the drag coefficient of the airfoil. Constraints may include lift
coefficient, relative maximum thickness, nose radius and trailing edge
angle. Shape optimization seeks to make a shock-free airfoil with a
feasible shape. Linear programming therefore provides engineers with
an essential tool in shape optimization.
3. Transportation Optimization
Transportation systems rely upon linear programming for cost and time
efficiency. Bus and train routes must factor in scheduling, travel time
and passengers. Airlines use linear programming to optimize their
profits according to different seat prices and customer demand.
Airlines also use linear programming for pilot scheduling and routes. LINEAR
Optimization via linear programming increases airlines' efficiency and PROGRAMMING
decreases expenses. PROBLEM (LPP) 29
4. Efficient Manufacturing
Manufacturing requires transforming raw materials into products that
maximize company revenue. Each step of the manufacturing process
NOTES must work efficiently to reach that goal. For example, raw materials
must past through various machines for set amounts of time in an
assembly line. To maximize profit, a company can use a linear
expression of how much raw material to use. Constraints include the
time spent on each machine. Any machines creating bottlenecks must
be addressed. The amount of products made may be affected, in order
to maximize profit based on the raw materials and the time needed.
5. Energy Industry
Modern energy grid systems incorporate not only traditional electrical
systems, but also renewables such as wind and solar photovoltaics. In
order to optimize the electric load requirements, generators,
transmission and distribution lines, and storage must be taken into
account. At the same time, costs must remain sustainable for profits.
Linear programming provides a method to optimize the electric power
system design. It allows for matching the electric load in the shortest
total distance between generation of the electricity and its demand over
time. Linear programming can be used to optimize load-matching or
to optimize cost, providing a valuable tool to the energy industry.
B) LIMITATIONS OF LPP
1. Linearity of relations
A primary requirement of linear programming is that the objective
function and every constraint must be linear. However, in real life
situations, several business and industrial problems are nonlinear in
nature.
2. Single objective
Linear programming takes into account a single objective only, i.e.,
profit maximization or cost minimization. However, in today's
dynamic business environment, there is no single universal objective
for all organizations.
3. Certainty
Linear Programming assumes that the values of co-efficient of decision
variables are known with certainty. Due to this restrictive assumption,
linear programming cannot be applied to a wide variety of problems
where values of the coefficients are probabilistic.
4. Constant parameters
LINEAR Parameters appearing in LP are assumed to be constant, but in practical
PROGRAMMING situations it is not so.
30 PROBLEM (LPP)
5. Divisibility
In linear programming, the decision variables are allowed to take non-
negative integer as well as fractional values. However, we quite often
face situations where the planning models contain integer valued NOTES
variables. For instance, trucks in a fleet, generators in a powerhouse,
pieces of equipment, investment alternatives and there are myriad of
other examples. Rounding off the solution to the nearest integer will
not yield an optimal solution. In such cases, linear programming
techniques cannot be used.
EXERCISE
Q.1 Explain the Linear Programming Problem giving two examples.
Q.2 Define and explain the terms: a) Objective function, b) Decision
Variables.
Q.3 Describe the major applications of Linear Programming in business
and industry, pointing out limitations, if any.
Q4 Use the graphical method to solve each of the following LP problems.
A) A company manufactures two electrical products: air conditioners
and large fans. The assembly process for each is similar in that both
require a certain amount of wiring and drilling. Each air conditioner
takes 3 hours of wiring and 2 hours of drilling. Each fan must go
through 2 hours of wiring and 1 hour of drilling. During the next
production period, 240 hours of wiring time are available and up to
140 hours of drilling time may be used. Each air conditioner sold yields
a prot of Rs.25. Each fan assembled may be sold for a prot of Rs.15.
Formulate and solve this linear programming mix situation to nd the
best combination of air conditioners and fans that yields the highest
prot.
B) A manufacturer of lightweight mountain tents makes a standard model
and an expedition model for national distribution. Each standard tent
requires 1 labour hour from the cutting department and 3 labour hours
from the assembly department. Each expedition tent requires 2 labour
hours from the cutting department and 4 labour hours from the
assembly department. The maximum labour hours available per day
in the cutting department and the assembly department are 32 and 84
respectively. If the company makes a prot ofRs. 50 on each standard
tent andRs. 80 on each expedition tent, use the graphical method to
determine how many tents of each type should be manufactured each
day to maximize the total daily prot?
C) A manufacturing plant makes two types of inatable boats, a two-
person boat and a four-person boat. Each two-person boat requires 0.9 LINEAR
labour hours from the cutting department and 0.8 labour hours from PROGRAMMING
PROBLEM (LPP) 31
the assembly department. Each four-person boat requires 1.8 labour
hours from the cutting department and 1.2 labour hours from the
assembly department. The maximum labour hours available per month
NOTES in the cutting department and the assembly department are 864 and
672 respectively. The company makes a prot of Rs.25 on each two-
person boat andRs. 40 on each four-person boat. Use the graphical
method to nd the maximum prot.
D) Harsh Engineering produces chairs and tables. Each table takes
four hours of labour from the carpentry department and two hours of
labour from the nishing department. Each chair requires three hours
of carpentry and one hour of nishing. During the current week, 240
hours of carpentry time are available and 100 hours of nishing time.
Each table produced gives a prot of Rs.70 and each chair a prot of
Rs.50. How many chairs and tables should be made in order to
maximize prot?
E) A company manufactures two products X and Y. Each product has
to be processed in three departments: welding, assembly and painting.
Each unit of X spends 2 hours in the welding department, 3 hours in
assembly and 1 hour in painting. The corresponding times for a unit
of Y are 3,2 and 1 respectively. The man-hours available in a month
are 1500 for the welding department, 1500 in assembly and 550 in
painting. The contribution to prots and xed overheads are Rs. 100
for product X and Rs.120 for product Y. Formulate the appropriate
linear programming problem and solve it graphically to obtain the
optimal solution for the maximum contribution.
F) Suppose a manufacturer of printed circuits has a stock of 200 resistors,
120 transistors and 150 capacitors and is required to produce two types
of circuits. Type A requires 20 resistors, 10 transistors and 10
capacitors. Type B requires 10 resistors, 20 transistors and 30
capacitors. If the prot on type A circuits is Rs. 5 and that on type B
circuits isRs. 12, how many of each circuit should be produced in order
to maximize prot?
G) A small company builds two types of garden chairs. Type A requires
2 hours of machine time and 5 hours of craftsman time. Type B
requires 3 hours of machine time and 5 hours of craftsman time. Each
day there are 30 hours of machine time available and 60 hours of
craftsman time. The prot on each type A chair isRs. 60 and on each
type B chair is Rs. 84. Formulate the appropriate linear programming
problem and solve it graphically to obtain the optimal solution that
maximizes prot.
H) Sheetal sales produces two gift packages of fruit. Package A
LINEAR contains 20 peaches, 15 apples and 10 pears. Package B contains 10
PROGRAMMING peaches, 30 apples and 12 pears.Sheetal sales has 40 000 peaches, 60
32 PROBLEM (LPP)
000 apples and 27 000 pears available for packaging. The prot on
package A isRs. 2.00 and the prot on B is Rs.2.50. Assuming that all
fruit packaged can be sold, what number of packages of types A and
B should be prepared to maximize the prot? NOTES
I) A factory manufactures two products, each requiring the use of three
machines. The rst machine can be used at most 70 hours; the second
machine at most 40 hours; and the third machine at most 90 hours.
The rst product requires 2 hours on Machine 1, 1 hour on Machine
2, and 1 hour on Machine 3; the second product requires 1 hour each
on machines 1and 2 and 3 hours on Machine 3. If the prot inRs. 40
per unit for the rst product andRs. 60 per unit for the second product,
how many units of each product should be manufactured to maximize
prot?
J) A farmer can buy two types of plant food, mix A and mix B. Each
cubic metre of mix A contains 20 kg of phosphoric acid, 30 kg of
nitrogen, and 5 kg of potash. Each cubic metre of mix B contains 10
kg of phosphoric acid, 30 kg of nitrogen and 10 kg of potash. The
minimum monthly requirements are 460 kg of phosphoric acid, 960
kg of nitrogen, and 220 kg of potash. If mix A costs Rs.30 per cubic
metre and mix B costs Rs.35 per cubic metre, how many cubic metres
of each mix should the farmer blend to meet the minimum monthly
requirements at a minimal cost? What is the cost?
K) A laboratory technician in a medical research centre is asked to
formulate a diet from two commercially packaged foods, food A and
food B, for a group of animals. Each kg of food A contains 8 units of
fat, 16 units of carbohydrates, and 2 units of protein. Each Kg of food
B contains 4 units of fat, 32 units of carbohydrate and 8 units of
protein. The minimum daily requirements are 176 units of fat, 1024
units of carbohydrate, and 384 units of protein. If food A costs 5Rs per
Kg and food B costs 5Rs per Kg, how many kilograms of each food
should be used to meet the minimum daily requirements at the least
cost? What is the cost of this amount?
*****
LINEAR
PROGRAMMING
PROBLEM (LPP) 33
UNIT - III
NOTES
TRANSPORTATION PROBLEM
CHAPTER OBJECTIVES
1. To equip students with fundamentals of Transportation Problem.
2. To acquaint the students with initial basic feasible solution of
Transportation Problem.
3. To enable the students to understand optimal solution of Transportation
Problem.
CHAPTER CONTENTS
a) Introduction and Formulation of TP.
b) Initial Basic Feasible Solution (North West Corner Rule)
c) Matrix Minimum Method
d) Vogel’s Approximation Method - VAM)
e) Checking for Optimality, Moving towards optimality, finding optimal
solution
f) Special cases- TP for maximization
g) Uunbalanced TP, restricted TP, Multiple /Optimal Solutions, Business
Applications

This chapter deals with In detail study of Transportation Problem and its
various concepts. It includes Meaning of terms initial basic feasible solution,
optimal solution etc. Special cases in Transportation Problem are also discussed
in this topic.
KEY WORDS
Transportation Problem, initial basic feasible solution, optimal solution.
3.1 INTRODUCTION
3.1.1 Meaning
The transportation problem is a special type of linear programming problem,
where the objective is to minimize the cost of distributing a product from a
TRANSPORTATION
34 PROBLEM number of sources to a number of destinations.
3.1.2 Definition
The transportation problem (TP) is concerned with shipping a commodity
between a set of sources (e.g. manufacturers) and a set of destinations (e.g.
retailers). Each source has a capacity dictating the amount it supplies. Each NOTES
destination has a demand dictating the amount it receives.
Because of the special structure of the Transportation Problem the Simplex

Method of solving is unsuitable for the Transportation Problem. The model
assumes that the distributing cost on a given rout is directly proportional to the
number of units distributed on that route. Generally, the transportation model can
be extended to areas other than the direct transportation of a commodity,
including among others, inventory control, employment scheduling, and
personnel assignment.
Suppose a manufacturing company owns three factories (sources) and
distribute his products to five different retail agencies (destinations). The
following table shows the capacities of the three factories, the quantity of
products required by the various retail agencies and the cost of shipping one unit
of the product from each of the three factories to each of the five retail agencies.
Usually the above table is referred as Transportation Table, which provides

the basic information regarding the transportation problem. The quantities inside
the table are known as transportation cost per unit of product. The capacity of
the factories 1, 2, 3 is 50, 100 and 150 respectively. The requirement of the retail
agency 1, 2, 3, 4, 5 is 100,60,50,50, and 40 respectively.In this case, the
transportation cost of one unit from factory 1 to retail agency 1 is 1,from factory
1 to retail agency 2 is 9,from factory 1 to retail agency 3 is 13, and so on.
A transportation problem can be formulated as linear programming problem
TRANSPORTATION
using variables with two subscripts. PROBLEM 35
Let
x11=Amount to be transported from factory 1 to retail agency 1
x12= Amount to be transported from factory 1 to retail agency 2
NOTES
……..
……..
……..
……..
x35= Amount to be transported from factory 3 to retail agency 5.
Let the transportation cost per unit be represented by C11, C 12, …..C35 that
is C11=1, C12=9, and so on.
Let the capacities of the three factories be represented by a1=50, a2=100,
a3=150.
Let the requirement of the retail agencies are b1=100, b2=60, b3=50, b4=50,
and b5=40. Thus, the problem can be formulated as
Minimize
C11x11+C12x12+……………+C35x35
Subject to:
x11 + x12 + x13 + x14 + x15 = a1
x21 + x22 + x23 + x24 + x25 = a2
x31 + x32 + x33 + x34 + x35 = a3
x11 + x21 + x31 = b1
x12 + x22 + x32 = b2
x13 + x23 + x33 = b3
x14 + x24 + x34 = b4
x15 + x25 + x35 = b5
x11, x12, ……, x35 ≥ 0.
Thus, the problem has 8 constraints and 15 variables. So, it is not possible
to solve such a problem using simplex method. This is the reason for the need of
special computational procedure to solve transportation problem.
The applications of Transportation Problem can be summarized as:
1. Minimize Shipping Cost.
2. Determine Low Cost location.
3. Find minimum cost production schedule.
4. Military Distribution System.
TRANSPORTATION
36 PROBLEM (Source: http://www.uobabylon.edu.iq)
3.3 TYPES OF TRANSPORTATION PROBLEMS
NOTES
Transportation problems can be classified into different groups based on
their main objective and origin supply versus destination demand. Transportation
problems whose main objective is to minimize the cost of shipping goods are
called minimizing. An alternative objective is to maximize the profit of shipping
goods, in which case the problems are called maximizing.
In a case where the supply of goods available for shipping at the origins is
equal to the demand for goods at the destinations, the transportation problem is
called balanced. In a case where the quantities are different, the problem is
unbalanced.
When a transportation problem is unbalanced, a dummy variable is used to
even out demand and supply. A dummy variable is simply a fictional warehouse
or store. For example, if total supply at all warehouses is 35 units, but total
demand at all stores is only 30 units, we create a fictional store with an additional
demand of 5 units. The cost of shipping to the fictional store is usually zero. Now,
the transportation problem becomes balanced.
3.4 MATHEMATICAL FORMULATION OF

Mathematically a transportation problem is nothing but a special linear

programming problem in which the objective function is to minimize the cost of
transportation subjected to the demand and supply constraints. The transportation
problem applies to situations where a single commodity is to be transported from
various sources of supply (origins) to various demands (destinations). Let there
be m sources of supply s1, s2, .…..............sm having ai ( i = 1,2,......m) units of
supplies respectively to be transported among n destinations d1, d2………dn
with bj ( j = 1,2…..n) units of requirements respectively.
Let cij be the cost for shipping one unit of the commodity from source i, to
destination j for each route. If xij represents the units shipped per route from
source i, to destination j, then the problem is to determine the transportation
schedule which minimizes the total transportation cost of satisfying supply and
demand conditions.
The transportation problem can be stated mathematically as a linear
programming problem as below:
TRANSPORTATION
PROBLEM 37
NOTES
(Source: https://books.google.co.in)
3.5 TRANSPORTATION ALGORITHM
The steps of the transportation algorithm are exact parallels of the simplex
algorithm, they are:
Step 1: Determine a starting basic feasible solution, using any one of the
following three methods
1. North West Corner Method
2. Least Cost Method
3. Vogel Approximation Method
Step 2: Determine the optimal solution using the following method:
MODI (Modified Distribution Method) or UV Method.
3.6 INITIAL BASIC FEASIBLE SOLUTION OF A

The computation of an initial feasible solution is illustrated in this section

with the help of the example1.1 discussed in the previous section. The problem
in the example 1.1 has 8 constraints and 15 variables we can eliminate one of
the constraints since a1 + a2 + a3 = b1 + b2 + b3 + b4 +b5. Thus now the problem
contains 7 constraints and 15 variables.
Note that any initial (basic) feasible solution has at most 7 non-zero Xij.
TRANSPORTATION Generally, any basic feasible solution with m sources (such as factories) and n
38 PROBLEM destination (such as retail agency) has at most m + n -1 non-zero Xij.
The special structure of the transportation problem allows securing a non
artificial basic feasible solution using one the following three methods.
1. North West Corner Method
NOTES
2. Least Cost Method
3. Vogel Approximation Method
The difference among these three methods is the quality of the initial basic
feasible solution they produce, in the sense that a better that a better initial
solution yields a smaller objective value. Generally the Vogel Approximation
Method produces the best initial basic feasible solution, and the North West
Corner Method produces the worst, but the North West Corner Method involves
least computations.
3.6.1 North West Corner Method:

The method starts at the North West (upper left) corner cell of the tableau
(variable x11).
Step -1: Allocate as much as possible to the selected cell, and adjust the
associated amounts of capacity (supply) and requirement (demand) by subtracting
the allocated amount.
Step -2: Cross out the row (column) with zero supply or demand to indicate
that no further assignments can be made in that row (column). If both the row
and column becomes zero simultaneously, cross out one of them only, and leave
a zero supply or demand in the uncrossed out row (column).
Step -3: If exactly one row (column) is left uncrossed out, then stop.
Otherwise, move to the cell to the right if a column has just been crossed or the
one below if a row has been crossed out. Go to step -1.
The concept of North-West Corner can be well understood through a
transportation problem given below:
In the table, three sources A, B and C with the production capacity of 50

units, 40 units, 60 units of product respectively is given. Every day the demand
of three retailers D, E, F is to be furnished with at least 20 units, 95 units and 35 TRANSPORTATION
units of product respectively. The transportation costs are also given in the matrix. PROBLEM 39
The prerequisite condition for solving the transportation problem is that
demand should be equal to the supply. In case the demand is more than supply,
then dummy origin is added to the table. The supply of dummy origin will be
NOTES equal to the difference between the total supply and total demand. The cost
associated with the dummy origin will be zero.
Similarly, in case the supply is more than the demand, then dummy source
is created whose demand will be equivalent to the difference between supply and
demand. Again the cost associated with the dummy source will be zero.
1. Select the north-west or extreme left corner of the matrix, assign as

many units as possible to cell AD, within the supply and demand
constraints. Such as 20 units are assigned to the first cell, that satisfies
the demand of destination D while the supply is in surplus.
2. Now move horizontally and assign 30 units to the cell AE. Since 30
units are available with the source A, the supply gets fully saturated.
3. Now move vertically in the matrix and assign 40 units to Cell BE. The
supply of source B also gets fully saturated.
4. Again move vertically, and assign 25 units to cell CE, the demand of
destination E is fulfilled.
5. Move horizontally in the matrix and assign 35 units to cell CF, both
the demand and supply of origin and destination gets saturated. Now
the total cost can be computed.
The Total cost can be computed by multiplying the units assigned to each
cell with the concerned transportation cost. Therefore,
Total Cost = 20*5+ 30*8+ 40*6+ 25*9+ 35*6 = Rs 1015
( Source: https://businessjargons.com )
Unbalanced supply and demand
If the total supply is not equal to the total demand then the problem is called
TRANSPORTATION
40 PROBLEM unbalanced transportation problem.
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 NOTES
Example 1
Find Solution using North-West Corner method
Solution
TOTAL number of supply constraints : 3
TOTAL number of demand constraints : 3
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.
TRANSPORTATION
PROBLEM 41
Now, the modified table is
NOTES
The rim values for S1=76 and D1=72 are compared.

The smaller of the two i.e. min(76,72) = 72 is assigned to S1 D1
Table-1

This exhausts the capacity of S1 and leaves 102 - 4 = 98 units with D2
Table-2
TRANSPORTATION
42 PROBLEM
NOTES
Table-3

Table-4

Table-5
TRANSPORTATION
PROBLEM 43
The rim values for S3=20 and Dummy=20 are compared.
The smaller of the two i.e. min(20,20) = 20 is assigned to S3 Dummy
Table-6
NOTES
Initial feasible solution is
The minimum total transportation cost =4×72+8×4+24×82+16×16+24×41+

0×20=3528
Here, the number of allocated cells = 6 is equal to m + n - 1 = 3 + 4 - 1 = 6
This solution is non-degenerate
( Source :https://cbom.atozmath.com )
3.6.2 Least Cost Method (Matrix Minimum Method)

Definition: 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.
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.
TRANSPORTATION
44 PROBLEM
Let’s understand the concept of Least Cost method through a problem given
below:
NOTES
In the given matrix, the supply of each source A, B, C is given Viz. 50units,
40 units, and 60 units respectively. The weekly demand for three retailers D, E,
F i.e. 20 units, 95 units and 35 units is given respectively. The shipping cost is
given for all the routes. The minimum transportation cost can be obtained by
following the steps given below:
1. The minimum cost in the matrix is Rs 3, but there is a tie in the cell
BF, and CD, now the question arises in which cell we shall allocate.
Generally, the cost where maximum quantity can be assigned should
be chosen to obtain the better initial solution. Therefore, 35 units shall
be assigned to the cell BF. With this, the demand for retailer F gets
fulfilled, and only 5 units are left with the source B.
2. Again the minimum cost in the matrix is Rs 3. Therefore, 20 units shall
be assigned to the cell CD. With this, the demand of retailer D gets
fulfilled. Only 40 units are left with the source C.
3. The next minimum cost is Rs 4, but however, the demand for F is
completed, we will move to the next minimum cost which is 5. Again,
the demand of D is completed. The next minimum cost is 6, and there
is a tie between three cells. But however, no units can be assigned to
the cells BD and CF as the demand for both the retailers D and F are 45
saturated. So, we shall assign 5 units to Cell BE. With this, the supply
of source B gets saturated.
4. The next minimum cost is 8, assign 50 units to the cell AE. The supply
NOTES of source A gets saturated.
5. The next minimum cost is Rs 9; we shall assign 40 units to the cell
CE. With his both the demand and supply of all the sources and origins
gets saturated.
The total cost can be calculated by multiplying the assigned quantity with
the concerned cost of the cell. Therefore,
Total Cost = 50*8 + 5*6 + 35*3 +20*3 +40*9 = Rs 955.
Note: The supply and demand should be equal and in case supply are more,
the dummy source is added in the table with demand being equal to the difference
between supply and demand, and the cost remains zero. Similarly, in case the
demand is more than supply, then dummy destination or origin is added to the
table with the supply equal to the difference in quantity demanded and supplied
and the cost being zero.
( Source: https://businessjargons.com )
Example 2
Find Solution of Transportation Problem using Least Cost method
Solution
Problem Table is
TRANSPORTATION
46 PROBLEM
NOTES
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
Table-1

TRANSPORTATION
PROBLEM 47
Table-2
NOTES

Table-3

The allocation to this cell is min (9,7) = 7.
TRANSPORTATION
48 PROBLEM
Table-4
NOTES

Table-5

Table-6
TRANSPORTATION
PROBLEM 49
NOTES

20×7=814
( Source :https://cbom.atozmath.com )
3.6.3 Vogel’s Approximation Method

Definition: 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.The concept of Vogel’s Approximation
Method can be well understood through an illustration given below:
1. First of all the difference between two least cost cells are calculated
for each row and column, which can be seen in the iteration given for
each row and column. Then the largest difference is selected, which is
4 in this case. So, allocate 20 units to cell BD, since the minimum cost
is to be chosen for the allocation. Now, only 20 units are left with the
source B.
TRANSPORTATION
50 PROBLEM
2. Column D is deleted, again the difference between the least cost cells
is calculated for each row and column, as seen in the iteration below.
The largest difference value comes to be 3, so allocate 35 units to cell
AF and 15 units to the cell AE. With this, the Supply and demand of NOTES
source A and origin F gets saturated, so delete both the row A and
Column F.
3. Now, single column E is left, since no difference can be found out, so

allocate 60 units to the cell CE and 20 units to cell BE, as only 20 units
are left with source B. Hence the demand and supply are completely
met.
Now the total cost can be computed, by multiplying the units assigned to
each cell with the cost concerned. Therefore,
Total Cost = 20*3 + 35*1 + 15*4 + 60*4 + 20*8 = Rs 555
Note: Vogel’s Approximation Method is also called as Penalty Method
because the difference costs chosen are nothing but the penalties of not choosing
the least cost routes.
( Source: https://businessjargons.com)
TRANSPORTATION
PROBLEM 51
Example 3
Find Solution using Vogel's Approximation method
NOTES
Solution
Problem Table is
TRANSPORTATION
52 PROBLEM
Now, The modified table is
NOTES
Table-1
The maximum penalty, 16, occurs in row S2.

The minimum cij in this row is c24 = 0.
The maximum allocation in this cell is min(82,20) = 20.
It satisfy demand of Dummy and adjust the supply of S2 from 82 to 62 (82
- 20 = 62).
TRANSPORTATION
PROBLEM 53
Table-2
NOTES

Table-3

.
TRANSPORTATION
54 PROBLEM
Table-4
NOTES

It satisfy supply of S2 and adjust the demand of D2 from 102 to 81 (102 -
21 = 81).
Table-5

TRANSPORTATION
PROBLEM 55
Table-6
NOTES

It satisfy supply of S1 and demand of D2.
The minimum total transportation cost =8×76+24×21+16×41+0×20+8×

72+16×5=2424
TRANSPORTATION
56 PROBLEM ( Source :https://cbom.atozmath.com )
Checking for optimality
Optimality test can be performed if two conditions are satisfied i.e.
1. There are m + n – 1 allocations, whose m is number of rows, n is
NOTES
number of columns.
2. These m + n – 1 allocations should be at independent positions. i.e. it
should not be possible to increase or decrease any allocation without
either changing the position of the allocations or violating the row or
column restrictions. A simple rule for allocations to be in independent
positions is that it is impossible to travel from any allocation, back to
itself by a series of horizontal and vertical steps form one occupied
cell to another, without a direct reversal of route.
This concept is explained through following examples.
3.7 MODIFIED DISTRIBUTION METHOD
Definition: The Modified Distribution Method or MODI is an efficient

method of checking the optimality of the initial feasible solution.
MODI Method Steps

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),
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.
b. 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 TRANSPORTATION
each corner, starting from the original unoccupied cell. PROBLEM 57
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
NOTES 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.
3.8 TERMS IN TRANSPORTATION PROBLEM
a) Feasible Solution
Solution that satisfies the row and column sum restrictions and also
the non-negativity restrictions is a feasible solution.
b) Basic Feasible Solution

A feasible solution of (m X n) transportation problem is said to be basic
feasible solution, when the total number of allocations is equal to (m
+ n – 1).
c) Optimal Solution
A feasible solution is said to be optimal solution when the total
transportation cost will be the minimum cost.
d) Occupied Cell
Occupied cell is a cell in Transportation Matrix where there is an
allocation.
e) Unoccupied Cell
Unoccupied cell is a cell in Transportation Matrix where there is no
allocation.
TRANSPORTATION
58 PROBLEM
Example 4
.
Transportation Problem NOTES
Solution: Vogel’s Approximation Method (VAM) is preferred to find initial

feasible solution.
The advantage of this method is that it gives an initial solution which is
nearer to an optimal solution or the optimal solution itself.
Step 1: The given transportation problem is a balanced one as the sum of
supply equals to sum of demand.
Step 2: The initial basic solution is found by applying the Vogel’s
Approximation method and the result is shown in the following table.
Initial Basic Solution Found by Applying VAM
Step 3: Calculate the Total Transportation Cost.

Initial Transportation cost = (2 × 250) + (3 × 200) + (5 × 250) + (4 × 150)
+ (3 × 50) + (1 × 300)
= 500 + 600 + 1250 + 600 + 150 + 300
= Rs. 3,400 TRANSPORTATION
PROBLEM 59
Step 4: Check for degeneracy. For this, verify the condition,
Number of allocations, N= m + n – 1
6=3+4–1
NOTES
6=6
Since the condition is satisfied, degeneracy does not exist.
Step 5: Test for optimality using modified distribution method. Compute
the values of U i and vj for rows and columns respectively by applying the
formula for occupied cells.cij+ui+vj = 0 Then, the opportunity cost for each
unoccupied cell is calculated using the formula C ij = cij + ui + vj and denoted
at the left hand bottom corner of each unoccupied cell. The computed valued of
uj and vi and are shown in the table below.
Calculation of the Opportunity Cost
Calculate the values of ui and vj, using the formula for occupied cells.
Assume any one of ui and vj value as zero (U3 is taken as 0)
cij + ui + vj = 0
4 + 0 + v2 = 0, v2 = – 4
5 + v2– 3 = 0, u2 = – 2
3 – 2 + v1 = 0, v1 = – 1
2 – 4 + u1 = 0, u1 = 2
Calculate the values of C ij , using the formula for unoccupied cells
C ij = cij + ui + vj
c11 = 4+2 –1 = 5
c13 = 7+2 –3 = 6
c14 = 3+2 –1 = 4
TRANSPORTATION
C22 = 7–2 – 4 = 1
60 PROBLEM
C24 = 8–2 – 1 = 5
C31 = 9 +0 –1 = 8
Since all the opportunity cost, C ij values are positive the solution is
NOTES
optimum.
Total transportation cost = (2 × 25) + (3 × 200) + (5 × 250) + (4 × 150) +
(3 × 50)+ (1 × 300)
= 50 + 600 +1250 + 600 + 150 + 300
= Rs 2,950/-
(Source: https://www.wisdomjobs.com)
3.9 CLOSED LOOP
Steps to draw Closed Loop

1. A closed loop consists of horizontal and vertical lines starting from
and ending on an unoccupied cell.
2. All the vertex or the corner points should be occupied cells except the
starting vertex.
3. For any given Transportation Problem we can form only one loop for
an unoccupied cell.
Showing Closed Loop
Conditions for forming a loop

(i) The start and end points of a loop must be the same.
(ii) The lines connecting the cells must be horizontal and vertical.
(iii) The turns must be taken at occupied cells only.
(iv) Take a shortest path possible (for easy calculations).
TRANSPORTATION
PROBLEM 61
Remarks on forming a loop
(i) Every loop has an even number of cells and at least four cells
(ii) Each row or column should have only one ‘+’ and ‘–’ sign.
NOTES
(iii) Closed loop may or may not be square in shape. It can also be a
rectangle or a stepped shape.
(iv) It doesn’t matter whether the loop is traced in a clockwise or
anticlockwise direction.
Example 5
The concept of MODI can be further comprehended through an illustration
given below:
1. Initial basic feasible solution is given below:
2. Now, calculate the values of ui and vj by using the equation:

ui+vj = Cij
Substituting the value of u1 as 0
U1+V1 = C11, 0+V1 = 6 or V1 = 6
U1 +V2 = C 12, 0+V2 = 4 or V2 = 4
U2+V2 = C22, U2+4 = 8 or U2 = 4
U3+ V2 = C 32, U3+4 = 4 or U3 = 0
U3+V3 = C33, 0+V3 = 2 or V3 =2
TRANSPORTATION
62 PROBLEM
NOTES
Next step is to calculate the opportunity cost of the unoccupied cells (AF,
BD, BF, CD) by using the following formula:
Cij – (ui+Vj)
AF = C 13 – (U1+V3), 1- (0+2) = -1 or 1
BD = C21 – (U2+V1), 3- (4+6) = -7 or 7
BF = C23 – (U2+V3), 7- (4+2) = 1 or -1
CD = C31- (U3+V1), 4- (0+6) = -2 or 2
4. Choose the largest positive opportunity cost, which is 7 and draw a
closed path, as shown in the matrix below. Start from the unoccupied
cell and assign “+” or “–“sign alternatively. Therefore, The most
favored cell is BD, assign as many units as possible.
5. The matrix below shows the maximum allocation to the cell BD, and
that number of units are added to the cell with a positive sign and
subtracted from the cell with a negative sign.
TRANSPORTATION
PROBLEM 63
NOTES
6. Again, repeat the steps from 1 to 4 i.e. find out the opportunity costs
for each unoccupied cell and assign the maximum possible units to the
cell having the largest opportunity cost. This process will go on until
the optimum solution is reached.
The Modified distribution method is an improvement over the stepping
stone method since; it can be applied more efficiently when a large number of
sources and destinations are involved, which becomes quite difficult or tedious
in case of stepping stone method.
Modified distribution method reduces the number of steps involved in the
evaluation of empty cells, thereby minimizes the complexity and gives a
straightforward computational scheme through which the opportunity cost of
each empty cell can be determined.
(Source: https://businessjargons.com, https://theintactone.com)
4. Special cases in Transportation Problem
4.1 UNBALANCED TRANSPORTATION PROBLEM.
When the total supply of all the sources is not equal to the total demand of
all destinations, the problem is an unbalanced transportation problem.
Total supply ≠ Total demand
TRANSPORTATION
64 PROBLEM
Example 6
Find Solution to following Transportation Problem using Vogel's
Approximation method.
NOTES
Solution
Problem Table is
Here Total Demand = 215 is less than Total Supply = 235. So we add a
TRANSPORTATION
PROBLEM 65
Table-1
NOTES
the maximum penalty, 16, occurs in row S2.

- 20 = 62).
Table-2

TRANSPORTATION
66 PROBLEM
Table-3
NOTES

It satisfy demand of D3 and adjust the supply of S2 from 62 to 21 (62 - 41
= 21).
Table-4

21 = 81).
TRANSPORTATION
PROBLEM 67
Table-5
NOTES

Table-6

TRANSPORTATION
68 PROBLEM
NOTES

16×5=2424
(Source: https://cbom.atozmath.com)
4.2 DEMAND LESS THAN SUPPLY
In real-life, supply and demand requirements will rarely be equal. This is

because of variation in production from the supplier end, and variations in
forecast from the customer end. Supply variations may be because of shortage
of raw materials, labour problems, Transportation Model improper planning and
scheduling. Demand variations may be because of change in customer
preference, change in prices and introduction of new products by competitors.
These unbalanced problems can be easily solved by introducing dummy
sources and dummy destinations. If the total supply is greater than the total
demand, a dummy destination (dummy column) with demand equal to the supply
surplus is added. If the total demand is greater than the total supply, a dummy
source (dummy row) with supply equal to the demand surplus is added. The unit
transportation cost for the dummy column and dummy row are assigned zero
values, because no shipment is actually made in case of a dummy source and
TRANSPORTATION
dummy destination.
PROBLEM 69
Example 7
Check whether the given transportation problem shown in Table is a
balanced one. If not, convert the unbalanced problem into a balanced
NOTES transportation problem.
Transportation Model with Supply Exceeding Demand
Solution: For the given problem, the total supply is not equal to the total
demand.
The given problem is an unbalanced transportation problem. To convert the

unbalanced transportation problem into a balanced problem, add a dummy
destination (dummy column). i.e., the demand of the dummy destination is equal
to,
Thus, a dummy destination is added to the table, with a demand of 100 units.
The modified table is shown in Table which has been converted into a balanced
transportation table. The unit costs of transportation of dummy destinations are
assigned as zero.
TRANSPORTATION
70 PROBLEM
Dummy Destination Added
NOTES
Similarly,
4.3 DEMAND GREATER THAN SUPPLY
Example 8
Convert the transportation problem shown in Table into a balanced problem.
Demand Exceeding Supply
Solution: The given problem is,
The given problem is an unbalanced one. To convert it into a balanced

transportation problem, include a dummy source (dummy row) as shown in Table
TRANSPORTATION
PROBLEM 71
Balanced TP Model
NOTES
4.4 DEGENERACY IN TRANSPORTATION PROBLEM
In a standard transportation problem with m sources of supply and n demand

destinations, the test of optimality of any feasible solution requires allocations
in m + n – 1 independent cells. If the number of allocations is short of the required
number, then the solution is said to be degenerate.If number of allocations, N =
m + n – 1, then degeneracy does not exist and if number of allocations, N less
than m + n – 1, then degeneracy will exist.
4.4.1 Resolving degeneracy

In order to resolve degeneracy, the conventional method is to allocate an
infinitesimally small amount e to one of the independent cells i.e., allocate a
small positive quantity e to one or more unoccupied cell that have lowest
transportation costs, so as to make m + n – 1 allocations (i.e., to satisfy the
condition N = m + n – 1).
In other words, the allocation of e should avoid a closed loop and should
not have a path. Once this is done, the test of optimality is applied and, if
necessary, the solution is improved in the normal was until optimality is reached.
The following table shows independent allocations.
Independent Allocations
4.4.1.1. Resolution of Degeneracy During the Initial Stage

To resolve degeneracy, we proceed by allocating a small quantity close to
zero to one or more (if needed) unoccupied cells so as to get m + n – 1. The cell
containing this extremely small quantity is considered to be an occupied cell.
This extremely small quantity is denoted by a Greek letter e (epsilon) or A
(delta). In a minimization problem it is better to allocate Δ to unoccupied cells
that have lowest transportation cost, whereas in maximization problem it should
be allocated to a cell that has a high payoff value. The quantity Δ is considered
so small that if it is transferred to an occupied cell it does not change the quantity
of allocation.
(1) Δ < xij for all xij > O
TRANSPORTATION (2) xij + Δ = xij – Δ, xij > O
72 PROBLEM
(3) Δ + O = Δ
(4) It there are more than one Δ’s in the solution, Δ < Δ’ whenever Δ is
above Δ’
NOTES
Example 9
A company wants to ship 22 loads of his product shown below. The matrix
gives the kilometers from sources of supply to the destination.
Shipping cost is Rs. 10/Load per km. what shipping schedule should be
used to minimize total transportation cost?
Solution
Since total destination requirement of 25 units more than the total resources
capacity of 22 by J units. This excess requirement is handled by adding dumny
plant Sexcees with a capacity equal to 3 unit. We use zero transportation cost to
the dummy plant.
Then modified total is shown below:
TRANSPORTATION
PROBLEM 73
To obtain initial solution
We use Vogel’s approximation method and get a following solution:
NOTES
This solution includes occupied cells but in a rule there will be m + n – 1 =

5 + – 4 = 8 occupied cell.
... The initial solution is degenerate.
In order to remove degeneracy we assign Δ to unoccupied cell (S2, D5)
which has minimum cost among unoccupied cells as shown in table 2.
To check optionality
We use MODI method and therefore first we have to find ui, vj & Δij with
following relation.
cij = ui + vj for occupied cell
Δij = cij – (ui + vj) for unoccupied cell.
TRANSPORTATION
74 PROBLEM
Here some Δij is not greater or equal to zero. This is not an optimal solution.
Then we have to improve this solution for this we have to choose (Sexcess D3)
cell because it has largest negative cost it must enter the bases
Then we choose a closed path for cell (Sexcess D3) which is (Sexcess, NOTES
D3)→(Sexcess,D4)→(S2D4)→(S2,D5) →(S1D5)→(S1D3)→ (D4Sexcess)and,
min. (Δ,3,5) = Δ
The new solution is shown in following table 4
To click its optimality again we have to calculate ci, vj and Δij.
Here again some Δij, is not greater or equal to zero. Then this is not an
optimal solution. Then again we choose (S3D4) cell which is largest negative, it
must enter the basis and choose a closed path as (S3
D4)→(S3D5)→(S1D5)→(S1D3)→(SexcessD3)→(SexcessD4)→(S3D4). Here
min (3, 5) = 3 and find a solution which is shown in following Table 6.
TRANSPORTATION
PROBLEM 75
NOTES
Again we check optimality & calculate ui vj & Δij as follows:

Again (S3D3) < 0 therefore this is not optimal solution again we choose
(S3D3) cell enter into basis and mark a closed path as
(S3D3)→(S3D5)→(S1D5)→(S1,D3)→(S3D3) and modified this table as shown
below.
TRANSPORTATION
76 PROBLEM
Repeating the procedure for optimality check for the above we come to the
conclusion that all Δij ≤ 0, and this is an optimal solution which is shown as
follows:
NOTES
The minimum total transportation cost associated with this solution is

= (4×4)+(4×4)+(2×6)+ (3×0)+(3×6)+(1×6)+(8×3)]x10
= (16+16+12+0+18+6 +24)10
= Rs. 920
(Source: https://www.engineeringenotes.com)
4.4.1.2. Degeneracy at Subsequent Interactions:

To resolve degeneracy which occurs during optimality test, the quantity
may be allocated to one or more cells which have become unoccupied recently
to have m + n -1 member of occupied cells in the new solution.
Example 10
Goods have to be transported from sources S1, S2 and S3 to destinations
D1, D2 and D3. The transportation cost per unit capacities of the sources and
requirements of the destination are given in the following table.
Determine a transportation schedule so that cost is minimized
Solution
To find initial Basic feasible solution. Using north- west corner method.
The non-degenerate initial basic feasible solution is given in Table. TRANSPORTATION
PROBLEM 77
NOTES
Here total occupied cell = m + n – 1

= 3 + 3-1
=5
Therefore there is no degeneracy. To test the optimality. We use MODI
method, for this first we calculate µi, vj & Δij.
Since the unoccupied cell (S3, D1) has the largest negative opportunity cost
of the therefore cell (S3, D1) is entered into the basis. Then we have chosen
closed path
(S3,D1)→(S3D2)→ (S2D2)→(S2D1)→(S3D3)
Here maximum allocation to negative cell is 300.
TRANSPORTATION
78 PROBLEM
Therefore modified solution is given below
NOTES
But in this solution degeneracy occur because total no of positive allocation

become 4 which is less than the required no m + n – 1 = 3 + 3 – 1 =5
Hence this is degenerate solution, to remove degeneracy a quantity Δ
assigned is to one of the cells that has become unoccupied so that m + n-1
occupied cell assign Δ to either (S1,D1) or (S3, D2) and proceed with the usual
solution procedure.
Again proceed with the usual solution procedure. The optimal solution is
given as follows:
TRANSPORTATION
PROBLEM 79
Total Cost = (70*8) + (50*6) + (80*10) +( 80*3)
= Rs. 1900
NOTES
Example 11
Determine the optimum basic feasible solution to the following
transportation problem:
Solution
Step 1
To find initial basic feasible solution using least cost method:
Here the lowest cost (Rs. 20 appears in cell (P1, W1). Because production
at company P1 and warehouse requirement of W1 are 50 and 100 units
respectively.
We assign x11 = 50
This allocation meets the requirements of warehouse W1 and still have a
Demand of 50 units. Consequently we delete the first row adjust the demand at
company P2, & P3, and reduce the capacity of company P2 to zero as shown in
following table:
Because the capacity of plant P3 is 150 & Demand of warehouse W3 is 22.

We allocate x33 = 22 and cross out third row.
TRANSPORTATION
80 PROBLEM
NOTES
Because there are 1 row and 3 column not yet crossed out, we go back to
step 1. The smallest entry in the remaining cost matrix is 40 which has in
warehouse W4 and W5.
Then we assign x34 = 40 and x40 = 40 and crossed again third row.
Similarly we apply this process. Then the complete initial basic feasible
solution is shown below:
Step (2)
To find optimality
TRANSPORTATION
PROBLEM 81
Using MODI
Method determine the row no. ui (i = 1,2,3) and column no. vj(1,2,3, 4, 5)
using relation cij = ui + vj for all the basic cell.
NOTES
Starting with u1, = 0
Here for seven occupied cell which can be described as:
TRANSPORTATION
82 PROBLEM
NOTES
Here since one of the opportunity cost (Δij) are still negative the solution
can further be improved by entering variable (P3, W1) it is negative then we
construct a closed path we find that 20 units should be shipped from (P3,
W2)or(P2, W1)to (P3, W1). This yield the new solution as shown in the next
table.
Then again we repeat process to find ui & vj & Δij. This has been shown in
table (2) again some Δij are still negative the solution can further be improved
by introducing the cell (P2 W5) are dropping the cell W{) as shown in table (3).
TRANSPORTATION
PROBLEM 83
NOTES
In table (3) some of the Δij again negative the solution can further be
improved by introducing the cell (P1, W2) and dropping the cell (P3, W5) from
the basic as shown in table (4) next.
Now since all current opportunity cost (Δij) are non – negative, an optimal
solution is arrived at and the optimal allocation is given by according to which
the optimal transportation cost is
Transportation cost = (40×20) + (10×28) + (60×36) + (40×25) + (60×35) +

(50×22) + (40 x 45) = Rs. 9240.
TRANSPORTATION
84 PROBLEM
4.5 RESTRICTED TRANSPORTATION PROBLEM
NOTES
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, etc. Such restrictions (or
prohibitions) can be handled in the transportation problem by assigning a very
high cost (say M or [infinity]) to the prohibited routes to ensure that routes will
not be included in the optimal solution and then the problem is solved in the usual
manner.
Example 12
Solve the following transportation problem:
An initial solution is obtained by the matrix minimum method and is shown

in the final table.
Transportation Cost = (16 X 50) + (12 X 150) + (14 X 40) +( 8 X 120) +

TRANSPORTATION
(26 X 90) = 6460 PROBLEM 85
The minimum transportation cost is Rs. 6460.
(Source: Repository.uobabylon.edu.iq)
NOTES
4.6 MULTIPLE SOLUTIONS TO TP
It is possible for a transportation problem to have multiple optimal solutions.

This happens when one or more of the improvement indices zero in the optimal
solution. This means that it is possible to design alternative shipping routes with
the same total shipping cost The alternate optimal solution can be found by
shipping the most to this unused square using a stepping-stone path. In the real
world, alternate optimal solutions provide management with greater flexibility
in selecting and using resources
Example 13
Find Solution using Vogel's Approximation method, also find optimal
solution using MODI method,
Solution
Problem Table is
TRANSPORTATION
86 PROBLEM
NOTES
Table-1

- 20 = 62).
TRANSPORTATION
PROBLEM 87
Table-2
NOTES

Table-3

The maximum allocation in this cell is min (62,41) = 41.
It satisfy demand of D3 and adjust the supply of S2 from 62 to 21 (62 - 41
= 21).
TRANSPORTATION
88 PROBLEM
Table-4
NOTES

The maximum allocation in this cell is min (21,102) = 21.
21 = 81).
Table-5

TRANSPORTATION
PROBLEM 89
Table-6
NOTES

The minimum total transportation cost =8×76+24×21+16×41+0×20+8×72

+16×5=2424
TRANSPORTATION ∴ This solution is non-degenerate
90 PROBLEM
Optimality test using MODI method.
Allocation Table is
NOTES

Optimality test using MODI method.
Iteration-1 of optimality test
1. Find ui and vj for all occupied cells(i,j), where cij=ui+vj
TRANSPORTATION
PROBLEM 91
NOTES
Since all dij≥0. So final optimal solution is arrived.

16×5=2424
Alternate solution is available with unoccupied cell S2D1:d21 = [0], but
with the same optimal value.
(Source: https://cbom.atozmath.com )
TRANSPORTATION
92 PROBLEM
QUESTIONS
1. Find the optimum Transportation schedule using VAM method and
minimum total cost of Transportation.
NOTES
2. Solve the transportation problem using VAM.
3. Solve the following transportation problem:
4. A Company has 3 production facilities S1, S2 and S3 with production

capacity of 7, 9 and 18 units (in 100's) per week of a product,
respectively. These units are tobe shipped to 4 warehouses D1, D2, D3
and D4 with requirement of 5,6,7 and 14 units (in 100's) per week,
respectively. The transportation costs (in rupees) per unit between
factories to warehouses are given in the table below.
TRANSPORTATION
PROBLEM 93
NOTES
Find initial basic feasible solution for given problem by using

(a) North-West corner method
(b) Least cost method
(c) Vogel's approximation method
(d) obtain an optimal solution by MODI method if the object is to
minimize the total transportation cost.
5. A company has factories at F1, F2 and F3 which supply to warehouses
at W1, W2 and W3. Weekly factory capacities are 200, 160 and 90
units, respectively. Weekly warehouse requiremnet are 180, 120 and
150 units, respectively. Unit shipping costs (in rupess) are as follows:
Determine the optimal distribution for this company to minimize total

shipping cost.
6. Find an initial basic feasible solution for given transportation problem
by using
TRANSPORTATION
94 PROBLEM
(a) North-West corner method
(b) Least cost method
(c) Vogel's approximation method
NOTES
Also test it for optimality.

Also test it for optimality.
*****
TRANSPORTATION
PROBLEM 95
UNIT - IV
NOTES
ASSIGNMENT PROBLEM
CHAPTER OBJECTIVES
1. To know the Assignment Problem Concept.
2. To understand Hungarian Method.
3. To Know Business applications of Assignment Problem.

This chapter throws light on Assignment Problem. Hungarian Method for
solving Assignment Problem is also discussed in this chapter. Special cases in
Assignment Problem are also discussed along with business applications of
Assignment Problem.
KEY WORDS
Assignment Problem, Hungarian Method, Special Cases
4.1 INTRODUCTION
4.1.1 Assignment Problem- Meaning

The assignment problem is a particular class of transportation linear
programming problems with the supplies and demands equal to integers (often
1). Since all supplies, demands, and bounds on variables are integers, the
assignment problem relies on an interesting property of transportation problems
that the optimal solution will be entirely integers.
4.1.2 Definition
Suppose there are n jobs to be performed and n persons are available for
doing these jobs. Assume that each person can do each job at a term, though with
varying degree of efficiency, let cij be the cost if the i-th person is assigned to
the j-th job. The problem is to find an assignment (which job should be assigned
to which person one on-one basis) So that the total cost of performing all jobs is
minimum, problem of this kind are known as assignment problem.
ASSIGNMENT
96 PROBLEM
4.1.3 Assignment problem- Business Applications
A few applications of mathematical model of assignment problem are:
i. Assignment of employees to machines.
NOTES
ii. Assignment of operators to jobs.
iii. Effectiveness of teachers and subjects.
iv. Allocation of machines for optimum utilization of space.
v. Salesmen to different sales areas.
vi. Clerks to various counters.
In all the cases, the objective is to minimize the total time and cost or
otherwise maximize the sales and returns.
The business applications of Assignment Problem can be described with
the help of following examples.
• The problem instance has a number of agents and a number of tasks. Any
agent can be assigned to perform any task, incurring some cost that may
vary depending on the agent-task assignment. It is required to perform
all tasks by assigning exactly one agent to each task and exactly one task
to each agent in such a way that the total cost of the assignment is
minimized. If the numbers of agents and tasks are equal, and the total
cost of the assignment for all tasks is equal to the sum of the costs for
each agent (or the sum of the costs for each task, which is the same thing
in this case), then the problem is called the linear assignment problem.
Commonly, when speaking of the assignment problem without any
additional qualification, then the linear assignment problem is meant.
• 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. The solution to the assignment problem will be
whichever combination of taxis and customers results in the least total
cost. However, the assignment problem can be made rather more flexible
than it first appears. In the above example, suppose that there are four
taxis available, but still only three customers. Then a fourth dummy task
can be invented, perhaps called "sitting still doing nothing", with a cost
of 0 for the taxi assigned to it. The assignment problem 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.
ASSIGNMENT
PROBLEM 97
4.2 STRUCTURE OF ASSIGNMENT PROBLEM
NOTES
Assignment problem is a special type of transportation problem in which
1. Number of supply and demand nodes are equal.
2. Supply from every supply node is one.
3. Every demand node has a demand of one.
4. Solution is required to be all integers.
The goal of a general assignment problem is to find an optimal assignment
of machines (laborers) to jobs without assigning an agent more than once and
ensuring that all jobs are completed. The objective might be to minimize the total
time to complete a set of jobs, or to maximize skill ratings, maximize the total
satisfaction of the group or to minimize the cost of the assignments. This is
subjected to the following requirements:
1. Each machine is assigned not more than one job.
2. Each job is assigned to exactly one machine.
The structure of assignment problem of assigning operators to jobs is shown
in Table.
Structure of Assignment Problem
Let n be the number of jobs and number of operators.

tij be the processing time of job i taken by operator j.
(Source: http://eacharya.inflibnet.ac.in)
4.3 HUNGARIAN METHOD
An assignment problem can be easily solved by applying Hungarian method

which consists of two phases. In the first phase, row reductions and column
reductions are carried out. In the second phase, the solution is optimized on
ASSIGNMENT
98 PROBLEM iterative basis.
Phase 1
Step 1: Consider the given matrix.
Step 2: In a given problem, if the number of rows is not equal to the number
NOTES
of columns and vice versa, then add a dummy row or a dummy column. The
assignment costs for dummy cells are always assigned as zero.
Step 3: Reduce the matrix by selecting the smallest element in each row
and subtract with other elements in that row.
Phase 2
Step 4: Reduce the new matrix column-wise using the same method as
given in step 2.
Step 5: Draw minimum number of lines to cover all zeros.
Step 6: If Number of lines drawn = order of matrix, then optimally is
reached, so proceed to step 7: If optimally is not reached, then go to step 6.
Step8: Select the smallest element of the whole matrix, which is not covered
by lines. Subtract this smallest element with all other remaining elements that
are not covered by lines and add the element at the intersection of lines. Leave
the elements covered by single line as it is. Now go to step 4.
Step 7: Take any row or column which has a single zero and assign by
squaring it. Strike off the remaining zeros, if any, in that row and column (X).
Repeat the process until all the assignments have been made.
Step 8: Write down the assignment results and find the minimum cost/time.
Note: While assigning, if there is no single zero exists in the row or column,
choose any one zero and assign it. Strike off the remaining zeros in that column
or row, and repeat the same for other assignments also. If there is no single zero
allocation, it means multiple numbers of solutions exist. But the cost will remain
the same for different sets of allocations.
Example 1
Three jobs A B C are to be assigned to three machines x Y Z. The processing
costs are as given in the matrix shown below. Find the allocation which will
minimize the overall processing cost.
ASSIGNMENT
PROBLEM 99
Solution
Step 1: create zero in each row or column by subtracting by selecting least
number in each row and column
NOTES
Row Minimization
Column Minimization
Now, Draw horizontal and vertical lines as shown below:
Here, number of horizontal lines is one and vertical line is one. The order
of matrix is 3×3, therefore, N≠ n. Now, in the uncrossed cell the least cost is
selected and subtracted for the remaining uncrossed cell by the least value
and for the intersection of the horizontal line and vertical line the least value
should be added and the resultant matrix is as below:
The above matrix has two horizontal line and one vertical line which
satisfies our condition N= n
ASSIGNMENT
100 PROBLEM
NOTES
Therefore minimum cost is Rs.49

(Source: www.getmyuni.com)
Example 2
Using the following cost matrix, determine a) optimal job assignment b)
the cost of assignments
Row Minimization
Column minimization
ASSIGNMENT
PROBLEM 101
Draw the horizontal and vertical lines
NOTES
Here, N≠n, 4≠ 5
Then, we have to select the least value in the uncrossed cell i.e 2 the result
table.
N=n satisfies our condition, so optimal assignment can be done
Therefore the minimum cost is Rs.21

(Source: www.getmyuni.com)
ASSIGNMENT
102 PROBLEM
4.4 SPECIAL CASES IN ASSIGNMENT PROBLEM
NOTES
4.4.1 Unbalanced Assignment problem
Whenever the cost matrix of an assignment problem is not a square matrix,
that is, whenever the number of sources is not equal to the number of destinations,
the assignment problem is called an unbalanced assignment problem. In such
problems, dummy rows (or columns) are added in the matrix so as to complete
it to form a square matrix. The dummy rows or columns will contain all costs
elements as zeroes. The Hungarian method may be used to solve the problem.
Example 3
A company has five machines that are used for four jobs. Each job can be
assigned to one and only one machine. The cost of each job on each machine is
given in the following Table.
Assignment Problem
Solution: Convert the 4 × 5 matrix into a square matrix by adding a dummy

row D5.
Dummy Row D5 Added
ASSIGNMENT
PROBLEM 103
Row-wise Reduction of the Matrix
NOTES
Column-wise reduction is not necessary since all columns contain a single

zero. Now, draw minimum number of lines to cover all the zeros, as shown in
Table.
All Zeros in the Matrix Covered
Number of lines drawn ≠ Order of matrix. Hence not optimal.

Select the least uncovered element, i.e., 1, subtract it from other uncovered
elements, add to the elements at intersection of lines and leave the elements that
are covered with single line unchanged as shown in Table.
Subtracted or Added to Elements
ASSIGNMENT
104 PROBLEM
Again Added or Subtracted 1 from Elements
NOTES
Number of lines drawn = Order of matrix. Hence optimality is reached.

Now assign the jobs to machines, as shown in Table.
Assigning Jobs to Machines
ASSIGNMENT
PROBLEM 105
4.4.2 Restricted Route Assignment Problem
It is sometimes possible that a particular person is incapable of doing certain
work or a specific job cannot be performed on a particular machine. The solution
NOTES of the assignment problem should take into account these restrictions so that the
restricted (infeasible) assignment can be avoided. This can be achieved by
assigning a very high cost (say ∞ or M)to the cells where assignments are
prohibited, thereby restricting the entry of this pair of job-machine or resource-
activity into the final solution.
Example 5
In a plant layout, four different machines M1, M2, M3 and M4 are to be
erected in a machine shop. There are five vacant areas A, B, C, D and E. Because
of limited space, Machine M2 cannot be erected at area C and Machine M4
cannot be erected at area A. The cost of erection of machines is given in the Table.
Assignment Problem
Find the optimal assignment plan.

Solution: As the given matrix is not balanced, add a dummy row D5 with
zero cost values. Assign a high cost H for (M2, C) and (M4, A). While selecting
the lowest cost element neglect the high cost assigned H, as shown in Table
below.
Dummy Row D5 Added
ASSIGNMENT
106 PROBLEM Row-wise reduction of the matrix is shown in Table.
Matrix Reduced Row-wise
NOTES
Note: Column-wise reduction is not necessary, as each column has at least

one single zero. Now, draw minimum number of lines to cover all the zeros, see
Table.
Lines Drawn to Cover all Zeros
Number of lines drawn ≠ Order of matrix. Hence not Optimal. Select the
smallest uncovered element, in this case 1. Subtract 1 from all other uncovered
element and add 1 with the elements at the intersection. The element covered by
single line remains unchanged. These changes are shown in Table. Now try to
draw minimum number of lines to cover all the zeros.
Added or Subtracted 1 from Elements
ASSIGNMENT
PROBLEM 107
Now number of lines drawn = Order of matrix, hence optimality is reached.
Optimal assignment of machines to areas are shown in Table.
Optimal Assignment
NOTES
Hence, the optimal solution is:
4.4.3 Maximization 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 subtracting all the elements of the given matrix
from the highest element.
Example 6 : A marketing manager has five salesmen and sales districts.
Considering the capabilities of the salesmen and the nature of districts, the
marketing manager estimates that sales per month (in hundred rupees) for each
salesman in each district would be as follows. Find the assignment of salesmen
to districts that will result in maximum sales.
ASSIGNMENT
108 PROBLEM
Maximization Problem
NOTES
Solution: The given maximization problem is converted into minimization

problem by subtracting from the highest sales value (i.e., 41) with all elements
of the given table.
Conversion to Minimization Problem
Reduce the matrix row-wise

Matrix Reduced Row-wise
ASSIGNMENT
PROBLEM 109
Reduce the matrix column-wise and draw minimum number of lines to
cover all the zeros in the matrix, as shown in Table.
Matrix Reduced Column-wise and Zeros Covered
NOTES

Select the least uncovered element, i.e., 4 and subtract it from other
uncovered elements, add it to the elements at intersection of line and leave the
elements that are covered with single line unchanged, Table.
Added & subtracted the least Uncovered Element
Now, number of lines drawn = Order of matrix, hence optimality is reached.

There are two alternative assignments due to presence of zero elements in cells
(4, C), (4, D), (5, C) and (5, D).
ASSIGNMENT
110 PROBLEM
Two Alternative Assignments
NOTES
Therefore,
(Source: https://www.coursehero.com)
4.4.4 Multiple Solutions

While making assignment in the reduced assignment matrix, it is possible
to have two or more ways to strike off certain number of zeroes. Such a situation
indicates multiple solutions with the same optimal value of the objective function.
If the problem has only one solution then the solution is said to be Unique
solution.
Example 7
The Spicy Spoon restaurant has four payment counters. There are four
persons available for service. The cost of assigning each person to each counter
is given in the following table.
ASSIGNMENT
PROBLEM 111
Solution
After applying steps 1 to 3 of the Hungarian Method, we obtain the
following matrix.
NOTES
Now by applying the usual procedure, we get the following matrix.
The resulting matrix suggest the alternative optimal solutions as shown in

the following tables.
ASSIGNMENT
112 PROBLEM
The persons B & C may be assigned either to job 2 or 3. The two alternative
assignments are:
A1 + B2 + C3 + D4
NOTES
1 + 18 + 23 + 31 = 73
A1 + B3 + C2+ D4
1 + 23 + 18 + 31 = 73
(Source: www.mywbut.com)
QUESTIONS
Q.1 What is Assignment Problem?
Q.2 Explain Formulation of Assignment Problem.
Q.3 Discuss the following with respect to Assignment Problem:
a) Hungarian Method
b) Assignment problem for Maximization
Q.4 Discuss Businss Applications of Assignment Problem.
Q.5 The Funny Toys Company has four men available for work on four
separate jobs. Only one man can work on any one job. The cost of
assigning each man to each job is given in the following table. Assign
men to jobs in such a way that the total cost of assignment is minimum.
Q.6 Four jobs (J1, J2, J3, and J4) need to be executed by four workers (W1,
W2, W3, and W4), one job per worker. The matrix below shows the
cost of assigning a certain worker to a certain job. Assign the jobs so
as to minimize the total cost of the assignment.
ASSIGNMENT
PROBLEM 113
NOTES
Q.7 There are four jobs to be assigned to five machines. Only one job can
be assigned to one machine. The amount of time in hours required for
the jobs per machine are given in the following matrix.
Find an optimum assignment of jobs to the machines to minimize the

total processing time and also find out for which machine no job is
assigned. What is the total processing time to complete all the jobs?
*****
ASSIGNMENT
114 PROBLEM
UNIT - V
NOTES
NETWORK ANALYSIS
CHAPTER OBJECTIVES
1. To equip students with fundamentals of Network Analysis
2. To acquaint the students with PERT and CPM Techniques.
3. To enable the students to determine Critical Path.

This chapter deals with understanding Network Analysis. It focuses on
PERT and CPM Techniques. Key terms in Network Analysis and determination
of Critical Path is discussed in this chapter.
KEY WORDS
Network Analysis, PERT, CPM, Critical Path
5.1 INTRODUCTION TO NETWORKS
One of the most challenging jobs that any manager can take on is the
management of a large-scale project that requires coordinating numerous
activities throughout the organi-zation. A myriad of details must be considered
in planning how to coordinate all these activities, in developing a realistic
schedule, and then in monitoring the progress of the project.
Fortunately, two closely related operations research techniques, PERT
(program evaluation and review technique) and CPM (critical path method), are
available to assist the project manager in carrying out these responsibilities. These
techniques make heavy use of networks (as introduced in the preceding chapter)
to help plan and display the coordination of all the activities. They also normally
use a software package to deal with all the data needed to develop schedule
information and then to monitor the progress of the project.
PERT and CPM have been used for a variety of projects, including the
following types:
1. Construction of a new plant
2. Research and development of a new product
3. NASA space exploration projects ASSIGNMENT
PROBLEM 115
4. Movie productions
5. Building a ship
6. Government-sponsored projects for developing a new weapons system
NOTES
7. Relocation of a major facility
8. Maintenance of a nuclear reactor
9. Installation of a management information system
10. Conducting an advertising campaign
A project is defined by a set of activities. Each activity is defined by its
duration (time to complete the activity) and its predecessors (activities that must
be completed before the activity can start). CPM (Critical Path Method) is used
to assist the project manager in scheduling the activities (i.e., when should each
activity start). It assumes that activity durations are known with certainty.
PERT (Program Evaluation and Review Technique) is used to assist in
project scheduling similar to CPM. However, PERT assumes that activity
durations are random variables (i.e., probabilistic)
The first step in CPM/PERT is to construct a project network. In the project
network each activity is represented by an arc connected by two nodes. The first
node represents the start of the activity and the second node represents the end
of it.
The network should reflect activities precedence relations.

Unfortunately, PERT/CPM techniques were credited for the early
completion of the submarine-launched Polaris nuclear missile.
5.2 NETWORK ANALYSIS
The network analysis is a method used to analyze, control and monitoring

of business processes and workflows. Contrary to the work breakdown structure,
a network diagram also considers the chronological order of activities, milestones
and tasks, their durations and dependencies and visualizes them graphically or
as a table, e.g. in a Gantt chart.
The network analysis enables project managers to take various factors into
ASSIGNMENT account when creating a project plan:
116 PROBLEM
• Dependencies between activities
• Buffer times between activities
• Earliest and latest start and end dates
NOTES
• Duration of activities
• Critical Path
The network analysis method is often used in procurement and production
in order to control project processes more efficiently and to complete projects
on schedule and on budget.
5.3 IMPORTANCE OF NETWORK ANALYSIS
A project has divided into many small activities and these activities can be
analyzed with the help of network technique to achieve the objectives of the
project.
• Network analysis helps management to minimize the total cost and total
maintenance time. With the use of network analysis cost of production
can be minimized through reducing the maintenance time.
• Network analysis ensures the effective utilization of limited resources. It
also ensures the optimal use of resources and help to control the idle
resources so that project can be effectively executed within the budgeted
costs and scheduled time.
• Network analysis facilitates co-ordination among the activities as well
the persons responsible for project.
• Time management plays a crucial role in every project. Sometimes
available resources have to be arranged with a view to reduce the total
time for the project rather than reducing the cost of the project. Network
analysis helps the managers to manage activities without any delay.
• Network analysis is great tool which helps in planning, scheduling and
controlling the activities of the project.
• Network analysis also creates inter-relationship as well as inter-
dependence of various activities of project. It helps in integrating the
project planning and this relationship assists in bringing out the
technological inter-dependence of the various activities.
• Network analysis provides the project formulation team an apparent
picture of the work elements and also sequential relationship of the
project.
ASSIGNMENT
PROBLEM 117
5.4 IMPORTANT TERMS IN NETWORK ANALYSIS
NOTES
Activity: An activity is a task, or item of work to be done, that consumes
time, effort, money or other resources. It lies between two events, called the
‘preceding’and succeeding ones. An activity is represented by an arrow with head
indicating the sequence in which the events are to occur.
Types of activity: Activities are of following types

a) Predecessor activity: activity that must be completed immediately prior
to the start of another activity.
b) Successor activity: activity which cannot be started until one or more
of other activities are completed but immediately succeed them are
called successor activity.
c) Float: In project management, float or slack is the amount of time that
a task in a project network can be delayed without causing a delay to:
subsequent tasks (free float) project completion date (total float).
d) Earliest Start Time (ES) = the earliest time that an activity can begin.
Earliest Finish Time (EF) = the earliest time that an activity can be
completed. ...
Lastest Start Time (LS) = the latest time that an activity can begin without
lengthening the minimum project duration.
5.5 CONSTRUCTION OF NETWORKS
Fulkerson's rule of numbering events

An event represents the accomplishment of task. In a network diagram,
beginning and ending of an activity are represented as events.
Step1: Number the start or initial event as 1.
Step2: From event 1, strike off all outgoing activities. This would have
made one or more events as initial events (event which do not have incoming
activities). Number that event as 2.
Step3: Repeat step 2 for event 2, event 3 and till the end event. The end
event must have the highest number.
Example 1
Draw a network for a house construction project. The sequence of activities
ASSIGNMENT with their predecessors is given in the following table, below.
118 PROBLEM
Sequence of Activities for House Construction Project
NOTES
Solution
Network diagram representing house construction project.

The network diagram in the above figure shows the procedure relationship
between the activities. Activity A (preparation of house plan), has a start event 1
as well as an ending event 2. Activity B (Construction of house) begins at event
2 and ends at event 3.
The activity B cannot start until activity A has been completed. Activities
C and D cannot begin until activity B has been completed, but they can be
performed simultaneously. Similarly, activities E and F can start only after
completion of activities C and D respectively. Both activities E and F finish at
the end of event 6.
Example 2
Consider the project given in the following table and construct a network
diagram.
Sequence of Activities for Building Construction Project
ASSIGNMENT
PROBLEM 119
Solution
The activities C and D have a common predecessor A. The network
representation shown in Figure Network representing the Error violates the rule
NOTES that no two activities canbegin and end at the same events. It appears as if activity
B is a predecessor of activity C, which is not the case. To construct the network
in a logical order, it is necessary to introduce a dummy activity as shown in
Figure.
Network representing the Error
Correct representation of Network using Dummy Activity
Example 3
Construct a network for a project whose activities and their predecessor
relationship are given in Table.
Activity Sequence for a Project
Solution
The network diagram for the given problem is shown in Figure with
activities A, B and C starting simultaneously.
ASSIGNMENT
120 PROBLEM
Network Diagram
NOTES
Example 4
Draw a network diagram for a project given in Table.
Project Activity Sequence
Solution
An activity network diagram describing the project is shown in figure
below:
Network Diagram
5.6 CRITICAL PATH METHOD
The critical path for any network is the longest path through the entire
network. Since all activities must be completed to complete the entire project,
the length of the critical path is also the shortest time allowable for completion
of the project. Thus if the project is to be completed in that shortest time, all
activities on the critical path must be started as soon as possible.
ASSIGNMENT
PROBLEM 121
These activities are called critical activities. If the project has to be
completed ahead of the schedule, then the time required for at least one of the
critical activity must be reduced. Further, any delay in completing the critical
NOTES activities will increase the project duration.
The activity, which does not lie on the critical path, is called non-critical
activity. These non-critical activities may have some slack time. The slack is the
amount of time by which the start of an activity may be delayed without affecting
the overall completion time of the project. But a critical activity has no slack. To
reduce the overall project time, it would require more resources (at extra cost) to
reduce the time taken by the critical activities to complete.
5.7 SCHEDULING OF ACTIVITIES: EARLIEST TIME

AND LATEST TIME
Before the critical path in a network is determined, it is necessary to find

the earliest and latest time of each event to know the earliest expected time (TE)
at which the activities originating from the event can be started and to know the
latest allowable time (TL) at which activities terminating at the event can be
completed.
Procedure
Step 1: Begin from the start event and move towards the end event.
Step 2: Put TE = 0 for the start event.
Step 3: Go to the next event (i.e node 2) if there is an incoming activity for
event 2, add calculate TE of previous event (i.e event 1) and activity time.
Step 4: Repeat the same procedure from step 3 till the end event.
5.7.2 Backward Pass Computations (to calculate Latest Time

T Network Model L)
Procedure
Step 1: Begin from end event and move towards the start event. Assume
that the direction of arrows is reversed.
Step 2: Latest Time TL for the last event is the earliest time. TE of the last
event.
Step 3: Go to the next event, if there is an incoming activity, subtract the
ASSIGNMENT
value of TL of previous event from the activity duration time. The arrived value
122 PROBLEM
is TL for that event. If there are more than one incoming activities, take the
minimum TE value.
Step 4: Repeat the same procedure from step 2 till the start event.
NOTES
Head event slack and Tail event slack
The head event slack of an activity in a network is the slack at the head.The
tail event slack of an activity in a network is the slack at the tail.
As discussed earlier, the non – critical activities have some slack or float.
The float of an activity is the amount of time available by which it is possible to
delay its completion time without extending the overall project completion time.
For an activity i = j, let
tij = duration of activity
TE = earliest expected time
TL = latest allowable time
ESij = earliest start time of the activity
EFij = earliest finish time of the activity
LSij = latest start time of the activity
LFij = latest finish time of the activity
5.7.3 Types and computation of Floats

A) Total Float TFij: The total float of an activity is the difference between
the latest start time and the earliest start time of that activity.
TFij = LSij– ESij ....................(1)
or
TFij = (TL– TE) – tij ....................(2)
B) Free Float FFij: The time by which the completion of an activity can
be delayed from its earliest finish time without affecting the earliest
start time of the succeeding activity is called free float.
FFij = (Ej– Ei) – tij ....................(3)
FFij = Total float – Head event slack
C) Independent Float IFij: The amount of time by which the start of an
activity can be delayed without affecting the earliest start time of any
immediately following activities, assuming that the preceding activity
has finished at its latest finish time.
IFij = (Ej– Li) – tij ....................(4)
IFij = Free float – Tail event slack
Where tail event slack = Li– Ei
ASSIGNMENT
The negative value of independent float is considered to be zero. PROBLEM 123
5.7.4 Critical Path
After determining the earliest and the latest scheduled times for various
activities, the minimum time required to complete the project is calculated. In a
NOTES network, among various paths, the longest path which determines the total time
duration of the project is called the critical path. The following conditions must
be satisfied in locating the critical path of a network.
An activity is said to be critical only if both the conditions are satisfied.
1. TL– TE= 0
2. TLj– tij– TEj = 0
5.7.5 Difference between PERT and CPM
ASSIGNMENT
124 PROBLEM
Example 5
The following details are available regarding a project:
NOTES
Determine the critical path, the critical activities and the project completion
time.
Solution
First let us construct the network diagram for the given project. We mark
the time estimates along the arrows representing the activities. We obtain the
following diagram:
Consider the paths, beginning with the start node and stopping with the end
node. There are two such paths for the given project. They are as follows:
Path I
with a time of 3 + 5 + 10 + 4 = 22 weeks.

Path II
with a time of 3 + 7 + 5 + 4 = 19 weeks.

Compare the times for the two paths. Maximum of {22,19} = 22. We see
that path I has the maximum time of 22 weeks. Therefore, path I is the critical ASSIGNMENT
PROBLEM 125
path. The critical activities are A, B, D and F. The project completion time is 22
weeks.
We notice that C and E are non- critical activities.
NOTES
Time for path I - Time for path II = 22- 19 = 3 weeks.
Therefore, together the non- critical activities can be delayed upto a
maximum of 3 weeks, without delaying the completion of the whole project.
Example 6
A project schedule has the following characteristics as shown in the table
Project Schedule
i. Construct PERT network.

ii. Compute TE and TL for each activity.
iii. Find the critical path.
Solution
(i) From the data given in the problem, the activity network is constructed
as shown in the following figure.
Activity Network Diagram
(ii) To determine the critical path, compute the earliest, time T Network
Model E and latest time TL for each of the activity of the project. The
calculations of TE and TL are as follows:
ASSIGNMENT
126 PROBLEM
To calculate TEfor all activities,
NOTES
ASSIGNMENT
PROBLEM 127
Various Activities and their Floats
NOTES
(iii) From the table, we observe that the activities 1 – 3, 3 – 5, 5 – 7,7 – 8

and 8 – 10 are critical activities as their floats are zero.
Critical Path of the Project
The critical path is 1-3-5-7-8-10 (shown in double line in the above figure)
with the project duration of 22 days.
5.8 PROGRAM EVALUATION AND REVIEW TECHNIQUE

(PERT)
In the critical path method, the time estimates are assumed to be known
with certainty. In certain projects like research and development, new product
introductions, it is difficult to estimate the time of various activities. Hence PERT
ASSIGNMENT is used in such projects with a probabilistic method using three time estimates
128 PROBLEM for an activity, rather than a single estimate, as shown in Figure.
PERT Using Probabilistic Method with 3 Time Estimates
NOTES
Optimistic time tO
It is the shortest time taken to complete the activity. It means that if
everything goes well then there is more chance of completing the activity within
this time.
Most likely time tm

It is the normal time taken to complete an activity, if the activity were
frequently repeated under the same conditions.
Pessimistic time tp
It is the longest time that an activity would take to complete. It is the worst
time estimate that an activity would take if unexpected problems are faced.
Taking all these time estimates into consideration, the expected time of an
activity is arrived at.
The average or mean (ta) value of the activity duration is given by,
Ta= t0+4tm+tp/6 .....................(5)
The variance of the activity time is calculated using the formula,
Ta= t0+4tm+tp/6 ...................(6)
Probability for Project Duration

The probability of completing the project within the scheduled time (Ts) or
contracted time may be obtained by using the standard normal deviate where Te
is the expected
time of project completion.
...............(7)
Probability of completing the project within the scheduled time is, ASSIGNMENT
PROBLEM 129
P (T≤ Ts) = P ( Z≤ Z0 ) (from normal tables) .................(8)
Example 7
NOTES An R & D project has a list of tasks to be performed whose time estimates
are given in the table, as follows.
Time expected for each activity is calculated using the formula (5):
Ta= t0+4tm+tp/6
= 4+4(6)+8/6 = 36/6 = 6 days for activity A
Similarly, the expected time is calculated for all the activities. The variance
of activity time is calculated using the formula (6).
Similarly, variances of all the activities are calculated. Construct a network

diagram and calculate the time earliest, TE and time Latest TL for all the
activities.
Network Diagram
ASSIGNMENT
130 PROBLEM
Time Estimates for R & D Project
NOTES
a. Draw the project network.

b. Find the critical path.
c. Find the probability that the project is completed in 19 days. If the
probability is less that 20%, find the probability of completing it in 24
days.
Solution
Calculate the time average ta and variances of each activity as shown in the
following table.
From the network diagram Figure, the critical path is identified as 1-4, 4-6,
6-7, with project duration of 22 days. The probability of completing the project
within 19 days is given by,
ASSIGNMENT
PROBLEM 131
NOTES
Thus, the probability of completing the R & D project in 19 days is 9.01%.

Since the probability of completing the project in 19 days is less than 20%, we
find the probability of completing it in 24 days.
QUESTIONS
Q.1 What do you mean by Network? Explain Network Analysis concept
with suitable examples.
Q.2 What is CPM?
Q.3 Explain PERT Technique.
Q.4 Differentiate between PERT and CPM
Q.5 The following table gives the activities and duration of a construction
project.
(i) Draw the network for the project

(ii) Find the critical path.
Q.6 A small project consists of 11 activities A, B, C ... K. According to the
precedence relationship A and B can start simultaneously, given A <
C, D, I; B < G, F; D < G, F; F < H, K; G, H < J; I, J, K < E. The
duration of the activities are as follows.
ASSIGNMENT
132 PROBLEM
NOTES
Draw the network of the project. Summarise the CPM calculations in

a tabular form computing the total and free floats of activities as well
as determine the critical path.
Q.7 Consider a project having the following activities and their time
estimates.
Draw an arrow diagram for the project. Identify the critical path and
compute the expected completion time. What is the probability that
the project will require at least 75 days?
*****
ASSIGNMENT
PROBLEM 133
BIBLIOGRAPHY
NOTES
1. Operations Research- Aditham B. Rao, Jaico Publishing House, 1st

edition
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Publishers, Meerut, 10th edition
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Research, McGraw-Hill: Boston MA; 10th Edition, 2014
4. Taha, Hamdy A., "Operations Research: An Introduction", Pearson,
10th Edition, 2016
5. Robert J. Thierauf & Richard A. Grosse, "Decision Making Through
Operations Research", John Wiley & Sons, INC, 1970
6. Harvey M. Wagner, Principles of Operations Research, Englewood
Cliffs, Prentice-Hall
7. Operations Research. Second Edition P. Rama Murthy. New Age
International (P) Ltd
8. Leachman, R. C., R. F. Benson, C. Liu and D. J. Raar, "IMPReSS: An
Automated Production-Planning and Delivery-Quotation System at
Harris Corporation - Semiconductor Sector," Interfaces, 26:1, pp. 6-
37, 1996.
9. Rigby, B., L. S. Lasdon and A. D. Waren, "The Evolution of Texaco's
Blending Systems: From OMEGA to StarBlend," Interfaces, 25:5, pp.
64-83, 1995.
10. Flanders, S. W. and W. J. Davis, "Scheduling a Flexible Manufacturing
System with Tooling Constraints: An Actual Case Study," Interfaces,
25:2, pp. 42-54, 1995.
11. Subramanian, R., R. P. Scheff, Jr., J. D. Quillinan, D. S. Wiper and R.
E. Marsten, "Coldstart: Fleet Assignment at Delta Air Lines,",
Interfaces, 24:1, pp. 104-120, 1994.
12. Kotha, S. K., M. P. Barnum and D. A. Bowen, "KeyCorp Service
Excellence Management System," Interfaces, 26:1, pp. 54-74, 1996.
13. International Journal of Operations Research and Information Systems
(IJORIS)
14. https://staff.aub.edu.lb
15. https://www.math.upatras.gr
134 BIBLIOGRAPHY 16. https://nptel.ac.in
17. https://hithaldia.in
18. https://businessjargons.com
19. https://www.wisdomjobs.com
NOTES
20.. https://www.coursehero.com
21. https://study.com
22. https://kalyan-city.blogspot.com
23. ncert.nic.in
24. http://mcehassan.ac.in
25. https://sciencing.com
26. www.courses.psu.edu
27. http://www.pondiuni.edu.in/storage/dde/downloads/mbaii_qt.pdf
28. https://www.pitt.edu/~jrclass/or/or-intro.html
29. http://epgp.inflibnet.ac.in
30. http://people.brunel.ac.uk
31. https://www.inloox.com
32. http://ncert.nic.in/ncerts/l/lemh206.pdf
33. https://cbom.atozmath.com
34. alagappauniversity.ac.in
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39. https://www.oreilly.com
*****
BIBLIOGRAPHY 135

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CONTENTS

Unit Contents Page No.

1 OVERVIEW OF OPERATIONS RESEARCH 1-10

2 LINEAR PROGRAMMING PROBLEM (LPP) 11-33

3 TRANSPORTATION PROBLEM 34-95

4 ASSIGNMENT PROBLEM 96-114

5 NETWORK ANALYSIS 115-135

OVERVIEW OF THE CHAPTER

The British/Europeans refer to "operational research", the Americans to

Meaning of Operations Research

Definition of Operations Research (OR)

1.2 ORIGIN AND DEVELOPMENT OF OPERATIONS

Operations Research is a ‘war baby’. It is because, the first problem

1.3 SIGNIFICANCE OF OPERATIONS RESEARCH

The significant features of operations research include the followings:

1.4 SCOPE OF OPERATIONS RESEARCH

(ii) Defence Services

(iii) Industrial Establishment and Private Sector Units

(iv) R & D and Engineering

(v) Business Management and Competition

(vi) Agriculture and Irrigation

(ix) Home Management and Budgeting

1.5 ADVANTAGES AND LIMITATIONS OF OPERATIONS

II) LIMITATIONS OF OPERATIONS RESEARCH

1.6 APPLICATIONS OF OPERATIONS RESEARCH

6. Organizational Behavior / Human Resources:

8. Research and Development:

1.7 LATEST APPLICATIONS OF OPERATIONS RESEARCH

Following are the latest applications of Operations Research.

OVERVIEW OF THE CHAPTER

2.1 DEFINITIONS OF LPP

Linear programming is a mathematical method that is used to determine the

2.2 COMPONENTS OF LPP

2. The Decision Variables

3. The Objective Function

2.3 FORMULATION OF LPP

It consists the following steps

Mathematical formulation of the problem

We have to consider the following conditions

LINEAR It is required to determine the daily number of units to be manufactured for

Formulation of Linear Programming Model NOTES

Solution: Formulation of LPP:

Graphical Solution for the problem of Maximization

Step II: To find the coordinates of each line equation.

Step III: To plot a graph.

Step IV: To find the common feasible region.

Step V: Optimum solution

Step I: Convert the given inequalities into equalities

Step II: To find the coordinates of each line equation.

Step IV: To find the common feasible region.

Step V: Optimum solution

Let us graph the constraints stated as linear inequalities

The coordinates of corner points

2.5 APPLICATIONS AND LIMITATIONS OF LPP

OVERVIEW OF THE CHAPTER

Because of the special structure of the Transportation Problem the Simplex

Usually the above table is referred as Transportation Table, which provides