2/18/2022

Bahir Dar Institute of

Technology

MSc in Construction
Technology and Management

System Analysis and Management Techniques

Transportation Problem

By: Solomon Melaku (PhD.)

January, 2022.

TRANSPORTATION PROBLEM (TP)

▪ TP: aims to find the best way to fulfill the demand of n

demand points using the capacities of m supply points.

▪ Minimizing total distribution cost; meeting capacity and

demand constraints.

▪ Can be used to locate new facilities (planning)

▪ Solved by Simplex, very large simplex tableaux and

numerous iterations.

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SPECIAL – PURPOSE ALGORITHMS

▪ Special-purpose algorithms (more efficient than LP) exist for

solving the TP.

▪ They involve:

✓ finding an initial solution

✓ testing if it is optimal, and

✓ developing an improved solution

✓ repeating these steps until an optimal solution is

reached.

COMMON TECHNIQUES

▪ Common techniques/methods for developing initial feasible

solutions are:
✓ North West Corner Method

✓ Minimum Cost Method

✓ Vogel’s approximation Method

▪ Optimality test Methods:

✓ Stepping – Stone Method

✓ Modified Distribution (MODI) – (U-V)

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TRANSPORTATION EXAMPLE

▪ A toy problem!…

✓ 2 supply plants, 3 markets, and 1 commodity.

✓ Given: unit costs of shipping, c.

✓ How much to ship to minimize total transportation cost

TRANSPORTATION EXAMPLE

j = Demand
i = Supply
2.5 KMiles 325 A
1 600 2.5 KMiles
1.4 KMiles
275 B
1.8 KMiles
2 350 1.8 KMiles
1.7 KMiles 300 C
▪ Minimize: Transportation cost

▪ Subject to: Demand satisfaction and supply constraints

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TRANSPORTATION TABLEAU

▪ A transportation problem is specified by the :

✓ supply,

✓ demand, and

✓ shipping costs.

▪ Relevant data can be summarized in a transportation tableau.

▪ The transportation tableau implicitly expresses the supply

and demand constraints and the shipping cost between each
demand and supply point.

TRANSPORTATION TABLEAU

Distance
Markets
Plants A B C Supply
1 2.5 1.7 1.8 350
2 2.5 1.8 1.4 600
Demand 325 300 275

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ALGEBRAIC REPRESENTATION

▪ Indices:
✓ i = plants

✓ j = markets

▪ Given Data (or parameters):

✓ ai = supply of commodity of plant i (in cases)

✓ bj = demand for commodity at market y at market j (cases)

✓ cij = cost per unit shipment between plant i and market j

($/case)

ALGEBRAIC REPRESENTATION

▪ Decision Variables:

✓ xij = amount to ship from plant i to market j (cases),

where xij ≥ 0, for all i, j

▪ Constraints:

✓ supply limit at plant i: ∑j xij ≤ ai ,for all i (cases)

✓ Satisfy demand at market j: ∑i xij ≥ bj , for all j (cases)

▪ Objective Function:

✓ Minimize ∑i ∑j cij xij

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General Description of a Transportation Problem

1. A set of m supply points from which a good is shipped

Supply point . Supply point i can supply at most si units.

2. A set of n demand points to which the good is shipped.

Demand point j must receive at least di units of the shipped
good.

3. Each unit produced at supply point i and shipped to demand

point j incurs a variable cost of cij.

MATHEMATICAL MODEL

▪ Xij = number of units shipped from supply point i to demand point j

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TRANSPORTATION PROBLEM REPRESENTATION

If shipment is impossible b/n a given source and destination, a

large cost of M is entered (Big M method)

EXAMPLE

3
(5) S1 D1 (7)
1 4

(7) S2 2 D2 (3)
4
3
(3) S3
3 D3 (5)

Destination
D1 D2 D3 Supply

S1 3 M 1 5
Source S2 4 2 4 7
S3 3 M 3 3
Demand 7 3 5

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Balanced Unbalanced
Destination
Sourc 1 2 Supply Destination
e 10 2
x11 x12 1000 Source 1 2 Supply
1
12 7 1 10 2
1000
x21 x22 1500 x11 x12
2
4 14 2 12 7
1500
x31 x32 1200 x21 x22
3
Demand 2300 1400 3 4 14
1200
x31 x32
Dummy
Destination xd1 xd2 200
Sourc 1 2 Dummy Supply
e Demand 2500 1400
10 2 20
1000
x11 x12 x1d
1
12 7 9
2 x21 x22 x2d 1500
3 4 14 16
x31 x32 x3d 1200
Demand 1900 1400 400

BALANCED TRANSPORTATION PROBLEM

▪ If total supply equals to total demand, the problem is said to

be a balanced transportation problem: We restricted focus
to balanced transportation problems

▪ There are no slacks and so all constraints are equalities rather

than inequalities

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UNBALANCED TP - CASE 1

▪ If total supply exceeds total demand, we can balance the

problem by adding dummy demand point (an extra market, a
dump). Since shipments to the dummy demand point are not
real, they are assigned a cost of zero.

▪ The demand of the extra market will be equal to

UNBALANCED TP - CASE 2

▪ If a transportation problem has a total supply that is less than

total demand the problem has no feasible solution.

▪ We may introduce an extra source to make up the shortfall,

and assign costs which reflect penalties for undersupplying
markets.

▪ As one can guess the total penalty cost is desired to be

minimum.

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Transportation Problem
A transportation tableau is given below. The unit shipping costs are given in
the cell. D1 D2 D3 Supply

S1 15 30 20 50

S2 30 40 35 30

Demand 25 45 10

The LP model for this problem is as follows:

Min Z = 15 X11 + 30 X12 + 20 X13 + 30 X21 + 40X22 + 35X23
S.t.
D1 D2 D3 Supply
X11 + X12 + X13 ≤ 50
S1 x11 x12 x13 50 X21 + X22 + X23 ≤ 30 It can be
X11 + X21 = 25 solved using
S2 x21 x22 x23 30 X12 + X22 = 45 a simplex
X13 + X23 = 10 method
Demand 25 45 10
X11, …, X23  0

• The transportation problem is solved in two steps:

– Obtaining an initial feasible solution

▪ Northwest corner

▪ Minimum-Cost Procedure

▪ Vogle’s approximation method

– Optimality Test

▪ Stepping Stone Method

▪ Modified distribution method (MODI) method

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1. NORTHWEST CORNER METHOD

▪ NWC method: is a procedure for constructing an initial basic

feasible solution one at a time.

▪ The North West corner rule begins with an allocation at the top
left-hand corner of the tableau

▪ It proceeds systematically along either a row or a column and

make allocations to subsequent cells until the bottom right-hand
corner is reached; by which time enough allocations will have
been made to constitute an initial solution.

NORTHWEST CORNER RULE

1. Start by selecting the cell in the most "North-West" corner of the

table.

2. Assign the maximum amount to this cell that is allowable based

on the requirements and the capacity constraints.

3. Exhaust the capacity from each row before moving down to

another row.

4. Exhaust the requirement from each column before moving right to

another column.

5. Check to make sure that the capacity and requirements are met.

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NORTHWEST CORNER RULE

• Begin by selecting X11 (that is, start in the northwest corner of the transportation tableau).

• Therefore, if Xij was the last basic variable (occupied cell) selected, then select Xij+1 (that
is, move one column to the right) if source I has any supply remaining.

• Otherwise, next select Xi+1 j (that is, move one row down).

D1 D2 D3 Supply
50
25 15 30 20
S1 25 25
0
30 40 35
S2 20 10 30
10
Demand 25 45 10 0
0 20 0
Total cost is $2275 0

Northwest Corner - Example 2

4 6 8 8 40

6 8 6 7 60

5 7 6 8 50

20 30 50 50

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Northwest Corner - Example 2

4 20 6 20 8 8 40

6 8 10 6 50 7 60

5 7 6 8 50 50

20 30 50 50

Total Cost = 980

MINIMUM (LEAST) COST METHOD

▪ The minimum cost method uses shipping costs in order come up with a
bfs that has a lower cost.

▪ To begin the minimum cost method, first we find the decision variable
with the smallest shipping cost (Xij).

▪ Then assign Xij its largest possible value, which is the minimum of si and
dj

▪ cross out row i and column j and reduce the supply or demand of the
noncrossed-out row or column by the value of Xij.

▪ Then we will choose the cell with the minimum cost of shipping from the
cells that do not lie in a crossed-out row or column and we will repeat the
procedure.

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Minimum Cost Method

• Step 1: Select the cell with the least cost. Assign to this cell the minimum of its
remaining row supply or remaining column demand.

• Step 2: Decrease the row and column availabilities by this amount and remove
from consideration all other cells in the row or column with zero
availability/demand. (If both are simultaneously reduced to 0, assign an allocation
of 0 to any other unoccupied cell in the row or column before deleting both.) GO
TO STEP 1.
D1 D2 D3 Supply
15 30 20
Total
S1 25 15 10 50
cost is
$2225 30 40 35
S2 30 30

Demand 25 45 10

Least Cost - Example 2

4 6 8 8 40

6 8 6 7 60

5 7 6 8 50

20 30 50 50

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Least Cost - Example 2

4 20 6 20 8 8 40
10

6 8 6 7 50 60

5 7 10 6 8 40 50

20 30 50 50

Total Cost = 960

3. VOGEL’S METHOD

▪ Begin with computing each row and column a penalty.

▪ The penalty will be equal to the difference between the two

smallest shipping costs in the row or column.

▪ Identify the row or column with the largest penalty.

▪ Find the first basic variable which has the smallest shipping cost
in that row or column.

▪ Then assign the highest possible value to that variable, and cross
out the row or column as in the previous methods

▪ Compute new penalties and use the same procedure

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Penalty cost (Vogel’s Approximation)

Step 1: For each row find the least value and then the second least value
and take the absolute difference of these two least values and write it in
the corresponding row/Column difference
These value of row difference and column difference are called as
penalty. It is a cost associated by not allocating on the minimum cost
cell. Now select the maximum penalty to reduce the penalty.

Step 2: Proceed the least (minimum) cost method on the selected

Row/Column. If a tie happen select arbitrary (Random).

4 6 8 8 40

6 8 6 7 60

5 7 6 8 50

20 30 50 50

Penalty Cost (Vogel’s Approximation) Example

4 6 8 8 40

6 8 6 7 60

5 7 6 8 50

20 30 50 50

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Penalty cost (Vogel’s Approximation) Example

4 20 6 20 8 8 40

6 8 6 50 7 10 60

5 7 10 6 8 40 50

20 30 50 50

Optimal Solution

▪ Stepping Stone Method Steps (Rule)

▪ MODI Method Steps (Rule)

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STEPPING – STONE METHOD

1. Select an unused square to be evaluated.

2. Beginning at this square, trace a closed path back to the

original square via squares that are currently being used
(only horizontal or vertical moves allowed). You can only
change directions at occupied cells!.

3. Beginning with a plus (+) sign at the unused square, place

alternative minus (-) signs and plus signs on each corner
square of the closed path just traced.

STEPPING – STONE METHOD

4. Calculate an improvement index, Iij by adding together the unit

cost figures found in each square containing a plus sign and then
subtracting the unit costs in each square containing a minus sign.

5. Repeat steps 1 to 4 until an improvement index has been calculated

for all unused squares.

▪ If all indices computed are greater than or equal to zero, an

optimal solution has been reached.

▪ If not, it is possible to improve the current solution and

decrease total shipping costs

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OPTIMALITY CRITERION

▪ If all the cost index values obtained for all the currently
unoccupied cells are nonnegative then, then the current
solution is optimal.

▪ If there are negative values, the solution has to be improved.

▪ This means that an allocation is made to one of the empty

cells (unused routes) and the necessary adjustments in the
supply and demand effected accordingly.

Find Solution using Vogel's Approximation method, also find

optimal solution using stepping stone method

D2 D3 D4 Supply
D1
S1 19 30 50 10 7
S2 70 30 40 60 9
S3 40 8 70 20 18
Demand 5 8 7 14

D2 D3 D4 Supply Row Penalty

D1
S1 19(5) 30 50 10(2) 7 9 | 9 | 40 | 40 | -- | -- |
S2 70 30 40(7) 60(2) 9 10 | 20 | 20 | 20 | 20 | 40 |
S3 40 8(8) 70 20(10) 18 12 | 20 | 50 | -- | -- | -- |
Demand 5 8 7 14

Column 21 22 10 10
Penalty 21 -- 10 10 The minimum total t
-- -- 10 10 ransportation cost =
-- -- 10 50 19×5+10×2+40×7+60
-- -- 40 60 ×2+8×8+20×10=779
-- -- 40 --

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Right angle turn for occupied cell

Supply

D1 D2 D3 D4
19(5) 30 50 10(2) 7
S1
+ -
S2 70 30 40(7) 60(2) 9

S3 40 8(8) 70 20(10) 18
- +
Demand 5 8 7 14

noccupied cell Closed path Net cost change

S 1 D2 S1D2→S1D4→S3D4→S3D2 30 - 10 + 20 - 8 = 32

Right angle turn for occupied cell

D1 D2 D3 D4 Supply
S1 19(5) 30 + 50 10(2) - 7
S2 70 30 40(7) 60(2) 9
- +
S3 40 8(8) 70 20(10) 18

Demand 5 8 7 14

noccupied cell Closed path Net cost change

S1D3 S1D3→S1D4→S2D4→S2D3 50 - 10 + 60 - 40 = 60

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Right angle turn for occupied cell

Supply

D1 D2 D3 D4
S1 19(5)- 30 50 10(2)+ 7
S2 70 + 30 40(7) 60(2) 9
-
S3 40 8(8) 70 20(10) 18

Demand 5 8 7 14

noccupied cell Closed path Net cost change

S2D1 S2D1→S2D4→S1D4→S1D1 70 - 60 + 10 - 19 = 1

Right angle turn for occupied cell

Supply

D1 D2 D3 D4
S1 19(5) 30 50 10(2) 7
S2 70 30 40(7) 60(2) 9
+ -
S3 40 8(8) 70 20(10) 18
- +
Demand 5 8 7 14

noccupied cell Closed path Net cost change

S2D2 S2D2→S2D4→S3D4→S3D2 30 - 60 + 20 - 8 = -18

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Right angle turn for occupied cell

Supply

D1 D2 D3 D4
19(5) 30 50 10(2) 7
S1
- +
S2 70 30 40(7) 60(2) 9

S3 40 8(8) 70 20(10) 18
+ -
Demand 5 8 7 14

noccupied cell Closed path Net cost change

S3D1 S3D1→S3D4→S1D4→S1D1 40 - 20 + 10 - 19 = 11

Right angle turn for occupied cell

Supply

D1 D2 D3 D4
S1 19(5) 30 50 10(2) 7

S2 70 30 40(7)
- 60(2) + 9

S3 40 8(8) 70 20(10) 18
+ -
Demand 5 8 7 14

noccupied cell Closed path Net cost change

S3D3 S3D3→S3D4→S2D4→S2D3 70 - 20 + 60 - 40 = 70

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Identify the Most negative cost change

Supply

D1 D2 D3 D4
S1 19(5) 30 50 10(2) 7

S2 70 30 40(7) 60(2) 9
+ -
S3 40 8(8) 70 20(10) 18
- +
Demand 5 8 7 14

noccupied cell Closed path Net cost change

S2D2 S2D2→S2D4→S3D4→S3D2 30 - 60 + 20 - 8 = -18

Select the unoccupied cell having the highest negative net cost change i.e. ce
ll S2D2=-18. and draw a closed path from S2D2.
Closed path is S2D2→S2D4→S3D4→S3D2

Select minimum allocated value among all negative position (-) on closed path

Minimum allocated value among all negative position (-) on closed path = 2
Subtract 2 from all (-) and Add it to all (+)
Supply

D1 D2 D3 D4
S1 19(5) 30 50 10(2) 7
S2 70 30 40(7) 60(2) 9
+(2) - (2)
S3 40 8(8) 70 20(10) 18
- (2) + (2)
Demand 5 8 7 14

noccupied cell Closed path Net cost change

S2D2 S2D2→S2D4→S3D4→S3D2 30 - 60 + 20 - 8 = -18

Select the unoccupied cell having the highest negative net cost change i.e. ce
ll S2D2=-18. and draw a closed path from S2D2.
Closed path is S2D2→S2D4→S3D4→S3D2

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Select minimum allocated value among all negative position () on closed path

Minimum allocated value among all negative position (-) on closed path = 2
Substract 2 from all (-) and Add it to all (+)
Supply

D1 D2 D3 D4
S1 19(5) 30 50 10(2) 7

S2 70 30 (2) 40(7) 60 9

S3 40 8(6) 70 20(12) 18

Demand 5 8 7 14

noccupied cell Closed path Net cost change

S2D2 S2D2→S2D4→S3D4→S3D2 30 - 60 + 20 - 8 = -18

Select the unoccupied cell having the highest negative net cost change i.e. ce
ll S2D2=-18. and draw a closed path from S2D2.
Closed path is S2D2→S2D4→S3D4→S3D2

Repeat the step 1 to 3, until an optimal solution is obtained

D1 D2 D3 D4 Supply
S1 19(5) 30 50 10(2) 7
S2 70 30 (2) 40(7) 60 9

S3 40 8(6) 70 20(12) 18

Demand 5 8 7 14

Unoccupied cell Closed path Net cost change

S1D 2 S1D2→S1D4→S3D4→S3D2 30 - 10 + 20 - 8 = 32

S1D 3 S1D3→S1D4→S3D4→S3D2→S2D2→S2D3 50 - 10 + 20 - 8 + 30 - 40 = 42

S2D 1 S2D1→S2D2→S3D2→S3D4→S1D4→S1D1 70 - 30 + 8 - 20 + 10 - 19 = 19

S2D 4 S2D4→S2D2→S3D2→S3D4 60 - 30 + 8 - 20 = 18

S3D 1 S3D1→S3D4→S1D4→S1D1 40 - 20 + 10 - 19 = 11

S3D 3 S3D3→S3D2→S2D2→S2D3 70 - 8 + 30 - 40 = 52

Since all net cost change ≥0 The minimum total transportation cost =19×
So final optimal solution is arrived. 5+10×2+30×2+40×7+8×6+20×12=743

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MODI Method Steps (Rule) – (U – V)

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

Then Back to RAM

MODI Method Steps (Rule)

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 the
procedure.

b. If dij=0 then alternative solution exists, with different set allocatio

n and same transportation cost. Now stop this procedure.

b. If dij<0, then the given solution is not an optimal solution and furt
her improvement in the solution is possible.

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MODI Method Steps (Rule)

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 th
e previous step on the stepping stone method).

The right angle turn in this path is allowed only at occupied cells and
at the original unoccupied cell.
Mark (+) and (-)
sign alternatively at each corner, starting from the original unoccupie
d cell.

MODI Method Steps (Rule)

Step-7: 1. Select the minimum value from cells marked with (-)
sign of the closed path.

2. Assign this value to selected unoccupied cell (So unoccupied cell

becomes occupied cell).

3. Add this value to the other occupied cells marked with (+) sign.

4. Subtract this value to the other occupied cells marked with (-)
sign.
Step-8: Repeat Step-2 to step-7
until optimal solution is obtained. This procedure stops when all dij
≥0 for unoccupied cells.

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Find Solution using Vogel's Approximation method

Supply

D1 D2 D3 D4
S1 19 30 50 10 7
S2 70 30 40 60 9
S3 40 8 70 20 18
Demand 5 8 7 14
D2 D3 D4 Supply Row Penalty
D1
S1 19(5) 30 50 10(2) 7 9 | 9 | 40 | 40 | -- | -- |
S2 70 30 40(7) 60(2) 9 10 | 20 | 20 | 20 | 20 | 40 |
S3 40 8(8) 70 20(10) 18 12 | 20 | 50 | -- | -- | -- |
Deman 5 8 7 14
d
Column 21 22 10 10
Penalty 21 -- 10 10 The minimum total t
-- -- 10 10 ransportation cost =
-- -- 10 50 19×5+10×2+40×7+60
-- -- 40 60 ×2+8×8+20×10=779
-- -- 40 --

Supply
D1 D2 D3 D4
S1 19(5) 30 50 10(2) 7
S2 70 30 40(7) 60(2) 9
S3 40 8(8) 70 20(10) 18
Demand 5 8 7 14

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. Is column 4. V4 = 0

b. Calculate other ui's and vj's using cij=ui+vj, for all occupied cells.

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b. Calculate other ui's and vj's using cij=ui+vj, for all occupied cells.

D1 D2 D3 D4 Supply
S1 19(5) 30 50 10(2) 7
S2 70 30 40(7) 60(2) 9
S3 40 8(8) 70 20(10) 18

Demand 5 8 7 14

1. Substituting, v4=0, we get

2.c14=u1+v4⇒u1=c14-v4⇒u1=10-0⇒u1=10

3.c11=u1+v1⇒v1=c11-u1⇒v1=19-10⇒v1=9

4.c24=u2+v4⇒u2=c24-v4⇒u2=60-0⇒u2=60

5.c23=u2+v3⇒v3=c23-u2⇒v3=40-60⇒v3=-20

6.c34=u3+v4⇒u3=c34-v4⇒u3=20-0⇒u3=20

7.c32=u3+v2⇒v2=c32-u3⇒v2=8-20⇒v2=-12

2. Find dij for all unoccupied cells(i,j), where dij=cij-(ui+vj)

D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=10
S2 70 30 40 (7) 60 (2) 9 u2=60
S3 40 8 (8) 70 20 (10) 18 u3=20
Demand 5 8 7 14
vj v1=9 v2=-12 v3=-20 V4 =0

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2. Find dij for all unoccupied cells(i,j), where dij=cij-(ui+vj)

D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=10
S2 70 30 40 (7) 60 (2) 9 u2=60
S3 40 8 (8) 70 20 (10) 18 u3=20
Demand 5 8 7 14
vj v1=9 v2=-12 v3=-20 V4 =0

1. d12 = c12-(u1+v2) = 30-(10-12) = 32

2. d13 = c13-(u1+v3) = 50-(10-20) = 60
3. d21 = c21-(u2+v1) = 70-(60+9) = 1
4. d22 = c22-(u2+v2) = 30-(60-12) = 18 -
5. d31 = c31-(u3+v1) = 40-(20+9) = 11
6. d33 = c33-(u3+v3) = 70-(20-20) = 70

±2
D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=10
S2 70 30 + 40 (7) 60 (2) - 9 u2=60
S3 40 8 (8) 70 20 (10) + 18 u3=20
Demand 5 8 - 7 14
vj v1=9 v2=-12 v3=-20 V4 =0
D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=10
S2 70 30 (2) 40 (7) 60 9 u2=60
S3 40 8 (6) 70 20 (12) 18 u3=20
Demand 5 8 7 14
vj v1=9 v2=-12 v3=-20 V4 =0

a. assign 0 to ui where maximum number of allocation in a row or column resp

ectively. All are the same Randomly select = u1=0, we get

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b. Calculate other ui's and vj's using cij=ui+vj, for all occupied cells.

D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=0
S2 70 30 (2) 40 (7) 60 9 u2=
S3 40 8 (6) 70 20 (12) 18 u3=
Demand 5 8 7 14
vj v1= v2= v3=- V4 =

1. Substituting, u1=0, we get

2.c11=u1+v1⇒v1=c11-u1⇒v1=19-0⇒v1=19

3.c14=u1+v4⇒v4=c14-u1⇒v4=10-0⇒v4=10

4.c34=u3+v4⇒u3=c34-v4⇒u3=20-10⇒u3=10

5.c32=u3+v2⇒v2=c32-u3⇒v2=8-10⇒v2=-2

6.c22=u2+v2⇒u2=c22-v2⇒u2=30+2⇒u2=32

7.c23=u2+v3⇒v3=c23-u2⇒v3=40-32⇒v3=8

b. Calculate other ui's and vj's using cij=ui+vj, for all occupied cells.

D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=0
S2 70 30 (2) 40 (7) 60 9 u2= 32
S3 40 8 (6) 70 20 (12) 18 u3= 10
Demand 5 8 7 14
vj v1=19 v2= -2 v3=8 V4 = 10

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Find dij for all unoccupied cells(i,j), where dij=cij-(ui+vj)

D1 D2 D3 D4 Supply ui
S1 19 (5) 30 50 10 (2) 7 u1=0
S2 70 30 (2) 40 (7) 60 9 u2= 32
S3 40 8 (6) 70 20 (12) 18 u3= 10
Demand 5 8 7 14
vj v1=19 v2= -2 v3=8 V4 = 10
1.d12=c12-(u1+v2)=30-(0-2)=32

2.d13=c13-(u1+v3)=50-(0+8)=42 Since all dij≥0.

3.d21=c21-(u2+v1)=70-(32+19)=19 So final optimal solution is arrived.

4.d24=c24-(u2+v4)=60-(32+10)=18 The minimum total transportation cost

=19×5+10×2+30×2+40×7+8×6+20×12=743
5.d31=c31-(u3+v1)=40-(10+19)=11

6.d33=c33-(u3+v3)=70-(10+8)=52

PROBLEM – TRANSPORTATION WORKERS

▪ A contractor transports workers to four work sites each day. The travel
time in minutes between each camp and work site is shown in the figure.
In order to maximize the number of productive hours per day of each
worker, the contractor wishes to minimize the total travel time.
Formulate a mathematical model to minimize total travel time.
Work Site

1 (20)
Workers Camp 40

(30) 1 20 2 (20)
50 50
20
20 3 (30)
(50) 2 10
60
4 (10)

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PROBLEM – TRANSPORTATION WORKERS

▪ Tabular format for the TP problem

Destination
1 2 3 4 Supply
1 40 20 20 50 30
Source 2 20 50 10 60 50
Demand 20 20 30 10 80

METHODS TO FIND THE bfs FOR A BALANCED TP

▪ Three basic methods to find the initial basic feasible solution

1. Northwest Corner Method

2. Least Cost Method

3. Vogel’s Approximation Method

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Class – Workout Problem

▪ Use NWC, MC, VAM methods to find the optimal solution for
the following Contractor’s TP Problem

A B C D Supply
1 2 3 5 6 5
2 2 1 3 5 10
3 3 8 4 6 15
Demand 12 8 4 6

MINIMUM COST METHOD

▪ Step 1: Select the cell with minimum cost CELL: 22

dj

sj

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MINIMUM COST METHOD

▪ Step 2: Cross out column 2

dj

sj

MINIMUM COST METHOD

▪ Step 3: Find the new cell with minimum shipping cost and cross-
out row 2
dj

sj

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MINIMUM COST METHOD

▪ Step 4: Find the new cell with minimum shipping cost and cross-
out row 1 CELL: 11 dj

sj

MINIMUM COST METHOD

▪ Step 5: Find the new cell with minimum shipping cost and cross-
out column 1 CELL: 33
dj

sj

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MINIMUM COST METHOD

▪ Step 6: Find the new cell with minimum shipping cost and cross-
out column 3
dj

sj

MINIMUM COST METHOD

▪ Step 7: Finally assign 6 to last cell. The bfs is found as: X11=5,
X21=2, X22=8, X31=5, X33=4 and X34=6 dj

sj

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PROBLEM – 2 NWC METHOD

▪ A concrete company transports concrete from three plants, 1, 2

and 3 to three construction sites; A, B, C.

▪ The cost of transporting 1m3 of concrete in $ to each site is shown

below. (Transportation tableau).

A B C Supply
(M3/Week)
1 4 3 8 300
2 7 5 9 300
3 4 5 5 100
Demand 200 200 300
(M3/Week)

SOLUTION: NWC CONTD…

▪ We start in the upper left hand cell and allocate units to shipping
routes as follows:

1. Exhaust the supply (plant capacity) of each row before moving

down to the next row.

2. Exhaust the demand (construction sites) requirements of each

column before moving to the next column to the right.

3. Check that all supply and demand requirements are met.

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SOLUTION: NWC CONTD…

▪ The initial shipping assignments are given in Table below.

A B C Supply
(M3/Week)
1 4 (200) 3 (100) 8 300
2 7 5 (100) 9 (200) 300
3 4 5 5 (100) 100
Demand 200 200 300
(M3/Week)

▪ We can compute, the cost of shipping assignments=

200*4+100*3+100*5+200*9+100*5 = $ 3900

▪ Note that this is not necessarily equal to the optimal solution

OPTIMALITY TEST

▪ The next step is to determine whether the allocations at any

stage of the solution process is optimal.

▪ one of the methods used to determine optimality of and

improve a current solution is the Stepping Stone method

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OPTIMALITY TEST FOR EXAMPLE – 1 USING STEPPING STONE

▪ Apply these steps to the Contractor’s problems

A B C Supply
(M3/Week)
1 4 (200) 3 (100) 8 300
2 7 5 (100) 9 (200) 300
3 4 5 5 (100) 100
Demand 200 200 300
(M3/Week)

SOLUTION

▪ Beginning at cell 1C route

A B C Supply
(M3/Week)
1 4 (200) 3 (100) - + 8 300
2 7 5 (100) - 9 (200) 300
+
3 4 5 5 (100) 100
Demand 200 200 300
(M3/Week)

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SOLUTION

▪ Calculate the improvement index for 1C route

▪ I1c = +8 – 3 + 5 -9 = +1

▪ This means that for every m3 concrete shipped via the 1-C
route, total transportation costs will increase by $1 over
their current level.

▪ Next we consider 2A unused route. The closed path we use

is shown in the figure next slide

SOLUTION

▪ Step 2 - A route improvement index is calculated

▪ I2A = +7 – 5 + 3 - 4 = +1

A ▪B C Supply
(M3/Week)
+
1 4 (200) - 3 (100) 8 300
2 7 + - 5 (100) 9 (200) 300
3 4 5 5 (100) 100
Demand 200 200 300
(M3/Week)

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SOLUTION

▪ Next 3 - A route and the improvement index is calculated as:

▪ I2A = +4 – 5 + 9 – 5 + 3 - 4 = +2

A B C Supply
(M3/Week)
1 4 (200) - + 3 (100) 8 300
2 7 - 5 (100) + 9 (200) 300
3 4 + 5 - 5 (100) 100
Demand 200 200 300
(M3/Week)

SOLUTION

▪ Last 3 - B route and the improvement index is calculated as:

▪ I2A = +5 – 5 + 9 – 5 = +4

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SOLUTION

▪ Last 3 - B route and the improvement index is calculated as:

▪ I2A = +5 – 5 + 9 – 5 = +4

A B C Supply
(M3/Week)
1 4 (200) 3 (100) 8 300
+
2 7 5 (100) - 9 (200) 300
3 4 5 + - 5 (100) 100
Demand 200 200 300
(M3/Week)

SOLUTION
▪ The solution is the optimal because each improvement index for the
Table is greater than or equal to zero.
▪ Therefore, the minimum cost is = 3900 $
▪ If we had one negative index, a cost saving may be attained by making
use of that route. i.e the cell can be improved.
▪ The quantity is found by referring to the closed path of plus signs and
minus signs drawn for the route and selecting the smallest number found
in those squares containing minus signs.
▪ To obtain a new solution that number is added to all squares on, that
number is added to all squares on the closed path with plus signs and
subtracted from all squares on the path assigned minus signs.
▪ To determine whether further improvement is possible, we return to the
first five steps to test each square that is now unused.

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EXERCISE

▪ Use NWC, MC, and VAM rule and Stepping Stone method and
MODI methods to find the optimal solution for the following
Contractor’s TP Problem

A B C Supply
(M3/Week)
1 5 4 3 100
2 8 4 3 300
3 9 7 5 300
Demand 300 200 200
(M3/Week)

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