CHAPTER 1

1. INTRODUCTION

The transportation problem is a special kind of the network optimization

problems. It has the special data structure in solution characterized as a
transportation graph. Transportation models play an important role in logistics and
supply chains. The problem basically deals with the determination of a cost plan
for transporting a single commodity from a number of sources to a number of
destinations. The purpose is to minimize the cost of shipping goods from one
location to another so that the needs of each arrival area are met and every shipping
location operates within its capacity. Network model of the transportation problem
is shown in Figure 1. It aims to find the best way to fulfill the demand of n demand
points using the capacities of m supply points.

1
 Cij

S1 .

.D1

S2 .

.D2

supplies S3 . .D3 Demand

available . requirements

. .Dn

Sm .

Figure1. Network model of the transportation problem

In Figure 1, S1-Sm are sources and D1-Dn are destinations. Cij is cost and xij is
number of units shipped from supply point i to demand point j then the general
linear programming representation of a transportation problem is:
n
min ∑ C ij x ij
j=1

n
Subject to ∑ x ij ≤ Si (i = 1, 2, … , m) supply constraints → (1)
j=1

∑ x ij ≥ Dj (j = 1, 2, … n) Demand constraints → (2)

j=1

xij ≥ 0 and integer for all i, j.

2
 If total supply equals total demand then the problem is said to be a balanced
transportation problem. The reader may refer to Wagner and Taha for detailed
converage of transportation problem.

Transportation problems can be solved by using general simplex based

integer programming methods, however it involves time-consuming computations.
There are specialized algorithms for transportation problem that are much more
efficient than the simplex algorithm. The basic steps to solve transportation
problem are:

Step 1: Determination the initial feasible solution,

Step 2: Determination optimal solution using the initial solution.

In this study, basic idea is to get better initial solutions for the transportation
problem. Therefore, study focused on Step 1 above. Several heuristic methods are
available to get an initial basic feasible solution. Although some heuristics can find
an initial feasible solution very quickly, oftentimes the solution they find is not
very good in terms of minimizing total cost. On the other hand, some heuristics
may not find an initial solution as quickly, but the solution they find is often very
good in terms of minimizing total cost. Well-known heuristics methods are North
West Corner, Best Cell Method, Vogel’s Approximation Method (VAM),
Shimshak et. al.’s version of VAM, Goyal’s version of VAM, Ramakrishnan’s
version of VAM etc. Kirca and Satir developed a heuristic to obtain efficient initial
basic feasible solutions, called Total Opportunity-Cost Method (TOM).
Balakrishnan proposed a modified version of VAM for unbalanced transportation
problem. Gauss reviewed various methods and discussed on solving the
transportation problem. Sharma and Sharma proposed a new procedure to solve the
dual of the well-known un capacitated transportation problem. Sharma and Prasad

3
proposed heuristic gives significantly better solutions than the well-known VAM.
This is a best heuristic method than Vogel’s to get initial solution to un capacitated
transportation problem. Adlakha and Kowalski presented a simple heuristic
algorithm for the solution of small fixed-charge transportation problems.
Mathirajan and Meenakshi were extended TOM using the VAM procedure. They
coupled VAM with total opportunity cost and achieved very efficient initial
solutions.

In this project, VAM was improved by using total opportunity cost and
regarding alternative allocation costs. Mathirajan and meenakshi applied VAM on
the toital opportunity cost matrix. In addition to this method, improved VAM
(IVAM) considers hilghest three penalty costs and calculates alternative allocation
costs in VAM procedure. Then it selects minimum one of them.

Paper is organized as follows. VAM is summarized and illustrated with

solving a sample transportation problem in the following section. IVAM is
explained in the third section.

4
1.1 ALGORITHM FOR NORTH WEST CORNER RULE

Step 1: The 1st assignment is made in the self occupying the upper left hand

(north west) corner of the transportation Table. The maximum

feasible amount is allocated. There (i.e.) xn = min(A, B) so that

either the capacity of origin 0 is exhausted.

The value of x1 is enter in the left hand corner (small sqrt) of cell

(1, 1) in the transportation table.

Step 2: (Case 1)

If B1 > A1 the capacity of origin O1 is exhausted but the

requirements at destination D1 is still not satisfies show that atleast
one more other variable in the first column will have to take an a
positive value move down vertically to the second row and make
the second allocation of magnitude x21 = min(A2, B1 – x11) in cell
(2, 1) this either x cost the capacity of origin go to are satisfies the
remaining demand at destination D1

(case 2):

If B1 < A1 the requirements at destination D1 is satisfies at the

capacity of origin O1 is not completely exhausted move to the right
horizontally to the second column and make the second allocation
of magnitude x12 = min(A1 – x11, B2) in the cell (1, 2) this either
exhaust the remaining capacity of origin or satisfies the demand at
destination at D2.

5
 (case 3):

If B1 = A1 the origin capactity of O2 is completely at exhausted as

well as the requirement at destination D1 is completely satisfies.
There is a tie for second allocation or atbitary tie breaking choice is
made write make the II allocation of magnitude
x12 = min(A1 – A1, B2) = 0 in the cell (1, 2) or
x21 = min(A2, B1 – B1) = 0 in the cell (2, 1).

Step 3: Start from the new north west corner of the transportation table
satisfying destination requirement and exhausting the origin capacities one
at a time move down two words the lower right corner of the transportation
table until all the rim requirements are satisfies.

North West Corner Rule (NWCR)

Table 1.1
[278]
46 74 9 28 99 461
183

12 75 6 36 48 277

35 199 4 5 71 356

61 81 44 88 9 488

85 60 14 25 79 393

278 60 461 116 1060

6
 Table 1.2

[278] [60]
46 74 9 28 99 183
123

12 75 6 36 48 277

35 199 4 5 71 356

61 81 44 88 9 488

85 60 14 25 79 393

- 60 461 116 1060

Table 1.3

[278] [60] [123]

123
46 74 9 28 99

12 75 6 36 48 277

35 199 4 5 71 356

61 81 44 88 9 488

85 60 14 25 79 393

- - 461 116 1060

338

Table 1.4

7
[278] [60] [123]
-
46 74 9 28 99
[277]
12 75 6 36 48 277

35 199 4 5 71 356

61 81 44 88 9 488

85 60 14 25 79 393

- - 338 116 1060

61

Table 1.5

[278] [60] [123]

-
46 74 9 28 99
[277]
12 75 6 36 48 -
[61]
35 199 4 5 71 356
295

61 81 44 88 9 488

85 60 14 25 79 393
[278] [60] [123]
- - 61 116 1060 -
46 74 9 28 99
[277]
12 75 6 36 48 -
[61] [116]
35 199 4 5 71 295
179

61 81 44 88 9 488

85 60 14 8
25 79 393

- - - 116 1060
 Table 1.6

Table 1.7

[278] [60] [123]

-
46 74 9 28 99
[277]
12 75 6 36 48 -
[61] [116] [179]
35 199 4 5 71 179

61 81 44 88 9 488

85 60 14 25 79 393

- - - - 1060
881

Table 1.8

[278] [60] [123]

-
46 74 9 28 99
[277]
12 75 6 36 48 -
[61] [116] [179]
35 199 4 5 71 -
[488]
61 81 44 88 9 488

85 60 14 25 79 393

- - - - 881
393

9
 Table 1.9

[278] [60] [123]

-
46 74 9 28 99
[277]
12 75 6 36 48 -
[61] [116] [179]
35 199 4 5 71 -
[488]
61 81 44 88 9 -
[393]
85 60 14 25 79 393

- - - - 393

Table 1.10

[278] [60] [123]

46 74 9 28 99
[277]
12 75 6 36 48
[61] [116] [179]
35 199 4 5 71
[488]
61 81 44 88 9
[393]
85 60 14 25 79

10
 Z= (278)(46) + (60)(74) + (123)(9) + (277)(6) + (61)(4)

+ (116)(5) + (179)(71) + (488)(9) + (393)(79)

Z= 12788 + 4440 + 1107 + 1662 + 244 + 580 + 12709 + 4392 + 31047

Z= 68,969

1.2 ALGORITHM FOR MATRIX MINIMA METHOD

Step 1: Determine the smallest cost in the matrix of the transportation table.

Let it be cij. Allocate xij = min(ai, bi) in the cell(i, j).

Step 2: (Case 1):

If xij = ai cross off the ith row of the transportation table and decrease
bj by ai. Go to step 3.

(Case 2):

If xij = bi cross off the jth column of the transportation table and

decrease ai by bj. Go to step 3.

(Case 3):

If xij = ai = bj cross off either the ith row or the jth column but not

both.

11
Step 3: Repeat step 1 and step 2 for the resulting reduced transportation

Table until all the rim requirements are satisfied.

Note :

Whenever the minimum cost is not unique make an arbitrary choice

among the minimum.

Table 1.2.1

46 74 9 28 99 461

12 75 6 36 48 277
[356]
35 199 4 5 71 356

61 81 44 88 9 488

85 60 14 25 79 393

278 60 461 116 1060

105

Table 1.2.2

12
 46 74 9 28 99 461

[105]
12 75 6 36 48 277
172
[356]
35 199 4 5 71 -

61 81 44 88 9 488

85 60 14 25 79 393

278 60 105 116 1060

Table 1.2.3

46 74 9 28 99 461

[105]
12 75 6 36 48 172
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 488

85 60 14 25 79 393

278 60 - 116 1060

572

Table 1.2.4

13
 46 74 9 28 99 461

[172] [105]
12 75 6 36 48 172
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 -

85 60 14 25 79 393

278 60 - 116 572

106

Table 1.2.5

46 74 9 28 99 461

[172] [105]
12 75 6 36 48 -
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 -
[116]
85 60 14 25 79 393
277

106 60 - 116 572

Table 1.2.6

14
[106]
46 74 9 28 99 461
355
[172] [105]
12 75 6 36 48 -
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 -
[116]
85 60 14 25 79 277

106 60 - - 572

Table 1.2.7

[106]
46 74 9 28 99 355

[172] [105]
12 75 6 36 48 -
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 -
[60] [116]
85 60 14 25 79 277
217

- 60 - - 572

Table 1.2.8

15
[106]
46 74 9 28 99 355

[172] [105]
12 75 6 36 48 -
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 -
[60] [116] [217]
85 60 14 25 79 217

- - - - 572
355

Table 1.2.9

[106] [355]
46 74 9 28 99 355

[172] [105]
12 75 6 36 48 -
[356]
35 199 4 5 71 -
[488]
61 81 44 88 9 -
[60] [116] [217]
85 60 14 25 79 -

- - - - 355

16
 Table 1.2.10

[106] [355]

46 74 9 28 99
[172] [105]

12 75 6 36 48
[356]
35 199 4 5 71
[488]
61 81 44 88 9
[60] [116] [217]
85 60 14 25 79

Z= (106)(46) + (355)(99) + (172)(12) + (105)(6) + (356)(4)

17
 + (488)(9) + (60)(60) + (116)(25) + (217)(79)

Z= 4876 + 35145 + 2064 + 630 +1424 + 4392 + 3600 + 2900 + 17143

Z= 72,174

CHAPTER 2

2.1 VOGEL’S APPROXIMATION METHOD (VAM)

VAM is a heuristic and usually provides a better starting solution than other
methods. Application of VAM to a given problem does not guarantee that an
optimal solution will result. However, a very good solution is invariably obtained
with comparatively little effort. In fact, VAM generally yields an optimum or close
to optimum starting solution for small sized transportation problems.

VAM is based on the concept of penalty cost or regret. A penalty cost is the
difference between the largest and next largest cell cost in a row or column. VAM
allocates as much as possible to the minimum cost cell in the row or column with
the largest penalty cost. Detailed processes of VAM are given below:

18
 Step 1: Balance the given transportation problem if either (total supply > total

demand) or (total supply < total demand)

Step 2: Determine the penalty cost for each row and column by subtracting the

lowest cell cost in the row or column from the next lowest cell cost in

the same row or column.

Step 3: Select the row or column with the highest penalty cost (breaking ties

arbitrarily or choosing the lowest-cost cell).

Step 4: Allocate as much as possible to the feasible cell with the lowest

transportation cost in row or column with the highest penalty cost.

Step 5: Repeat steps 2, 3 and 4 until all requirements have been meet.

Step 6: Compute total transportation cost for the feasible allocations.

An example transportation problem is given in Table 1. In this example matrix size

is 5 × 5. S1-S5 are source points and D1-D5 are destination points. Each box in the
left of the columns represents constant cost (c ij) and each empty box in the right of
the columns represents allocation quantities (xij) which is number of units shipped
from supply point i to demand point j.

VOGEL’S APPROXIMATION METHOD (VAM)

Table : 2.1

461
46 74 9 28 99 (19)

19
 277
12 75 6 36 48 (277)
356
35 199 4 5 71 (1)
488
61 81 44 88 9 (35)
393
85 60 14 25 79 (11)

278 60 461 116 1060

(23) (21) (2) (20) (39)

Table :2.2

461
46 74 9 28 99 (19)
277
12 75 6 36 48 (277)
356
35 199 4 5 71 (1)
[488] 488
61 81 44 88 9 (35)
393
85 60 14 25 79 (11)

278 60 461 116 1060

(23) (21) (2) (20) (39)

20
 Table :2.3

461
46 74 9 28 99 (19)
[277] 277
12 75 6 36 48 (6)
356
35 199 4 5 71 (1)
[488] -
61 81 44 88 9 -
393
85 60 14 25 79 (11)

278 60 461 116 572

(23) (14) (2) (20) (23)

Table :2.4

461
46 74 9 28 99 (19)
[277] -
12 75 6 36 48 -
[116] 356
35 199 4 5 71 (1)
[488] -
61 81 44 88 9 -
393
85 60 14 25 79 (11)

1 60 461 116 572

(11) (14) (5) (20) (8)

21
 Table :2.5

461
46 74 9 28 99 (37)
[277] -
12 75 6 36 48 -
[116] 240
35 199 4 5 71 (31)
[488] -
61 81 44 88 9 -
393
85 60 14 25 79 (45)

1 60 461 - 572
(11) (14) (5) (8)

Table :2.6

461
46 74 9 28 99 (37)
[277] -
12 75 6 36 48 -
[116] 240
35 199 4 5 71 (31)
[488] -
61 81 44 88 9 -
[393] 393
85 60 14 25 79 (45)

1 60 461 - 572
(11) (14) (5) (8)

22
 Table :2.7

[60] 461
46 74 9 28 99 (37)
[277] -
12 75 6 36 48 -
[116] 240
35 199 4 5 71 (31)
[488] -
61 81 44 88 9 -
[393] -
85 60 14 25 79 -

1 60 68 - 572
(11) (45) (5) (28)

Table :2.8

[60] [68] 401

46 74 9 28 99 (37)
[277] -
12 75 6 36 48 -
[116] 240
35 199 4 5 71 (31)
[488] -
61 81 44 88 9 -
[393] -
85 60 14 25 79 -

1 - 68 - 572
(11) (5) (28)

23
 Table :2.9

[1] [60] [68] 333

46 74 9 28 99 (53)
[277] -
12 75 6 36 48 -
[116] 240
35 199 4 5 71 (36)
[488] -
61 81 44 88 9 -
[393] -
85 60 14 25 79 -

1 - - - 572
(11) (28)

Table :2.10

[1] [60] [68] [332] 332

46 74 9 28 99 (99)
[277] -
12 75 6 36 48 -
[116] 240
35 199 4 5 71 (71)
[488] -
61 81 44 88 9 -
[393] -
85 60 14 25 79 -

- - - - 572
(28)

24
 Table :2.11

[1] [60] [68] [332] -

46 74 9 28 99 -
[277] -
12 75 6 36 48 -
[116] [240] 240
35 199 4 5 71 (71)
[488] -
61 81 44 88 9 -
[393] -
85 60 14 25 79 -

- - - - 240
(71)

Table 2.12

[1] [60] [68] [332]

46 74 9 28 99
[277]
12 75 6 36 48
[116] [240]
35 199 4 5 71
[488]
61 81 44 88 9
[393]
85 60 14 25 79

Z= (488×9) + (277×12) + (116×5) + (393×14) + (74×60)

+ (68×9) + (46×1) + (332×99) + (71×240)

25
 Z= 4392+ 3324 + 580 + 5502 + 4440 + 612 + 46 + 32868 + 17040

Z= 68, 804

Initial basic solution for this problem was obtained using VAM and given in
the above table. Using the values in above table, initial cost was calculated as
68804.

2.2 ALGORITHM OF MODI METHOD

Step 1: Construct a Transportation table entering the origin capacity ai

destination bj and the cost cij.

Step 2: Determine an IBFS in using any of the 5 methods and enter the

Solution in the upper left corner of the basic cells.

Step 3: For all the basic variables xij solve the system of equation ui + vj = cij

for all i, j, for which (i, j) is in the basic starting initially with sum

ui = 0 and entering successively the values ui and vj on the

transportation table.

26
Step 4: Compute the net evaluation Zij – Cij implies ui + vi – Cij for all the

non basic cells and enter them in the upper right corner of the
corresponding cells.

Step 5: Examine the sign on each Zij – Cij if all Zij – Cij ≤ 0 then the

current basic feasible solution is n optimum solution one. If

atleast one Zij – Cij > 0 select the variable xrs having the largest +ve

net evaluation to enter the basis.

Step 6: Let the variable xrs enter the basis allocate an unknown quotiently

say θ to the cell (r, s) identify a loop starts and ends at the cells (r, s)

and connects sum of basic cells odd and subtract inter changefully

θ to and from the transition cells of the loop in such a way that the

rim requirements reminds satisfy.

Step 7: Assign a maximum value to θ in such a way that the value of one

basic variable becomes zero and then other basic variables remains

non-negative. The basic cells whose allocation has been reduced to

zero leaves the basis.

Step 8: Return to step 3 and repeat the process until an optimum basic

feasible solution has been obtained.

MODI METHOD

27
 Table 2.2.1

[1] [60] [68] + [332-] u1 =0

46 74 9 28 99
[277] u2 =-34
12 75 6 36 48

[116-] [240+] u3 =-28

35 199 4 5 71
[488] u4 =-90
61 81 44 88 9
[393] u5 =5
85 60 14 25 79
v1 =46 v2 =74 v3 =9 v4 =33 v5 =99

Table 2.2.2

[1] 60- 68+ 116 [216 u1 =0

46 9 28 99
74
[277] u2 =-34
12 75 6 36 48
[356] u3 =-28
35 199 4 5 71
[488] u4 =-90
61 81 44 88 9
+ 393- u5 =5
85 60 25 79
14
v1 =46 v2 =74 v3 =9 v4 =28 v5 =99

28
 Table 2.2.3

[1] 128+ 116- 216 u1 =0

46 74 9 28 99
[277] u2 =-34
12 75 6 36 48
[356] u3 =-28
35 199 4 5 71
[488] u4 =-90
61 81 44 88 9
60 333- + u5 =5
85 60 14 25 79
v1 =46 v2 =55 v3 =9 v4 =28 v5 =99

29
 Table 2.2.4

[1] 244+ 216- u1 =0

46 74 9 28 99
[277] u2 =-34
12 75 6 36 48
[356] u3 =-3
35 199 4 5 71
[488] u4 =-65
61 81 44 88 9
60 217 116 + u5 =5
85 60 14 25 79
v1 =46 v2 =55 v3 =9 v4 =20 v5 =99

Table 2.2.5

[1] 460 u1 =0
46 74 9 28 99

[277] u2 =-34
12 75 6 36 48

+ 356- u3 =-28
35 199 4 5
71
[488] u4 =-65
61 81 44 88 9
60 1- 116
216+ u5 =5
85 60 14 25 79
v1 =46 v2 =57 v3 =9 v4 =22 v5 =76

30
 Table 2.2.6

[1] 460 u1 =0
46 74 9 28 99

[277] u2 =-34
12 75 6 36 48
1 + 355- u3 =-5
35 199 4 5
71
[488] u4 =-67
61 81 44 88 9
60 1 116-
217+ u5 =5
85 60 14 25 79
v1 =46 v2 =57 v3 =9 v4 =22 v5 =76

Table 2.2.7

[1-] 460+ u1 =0
46 74 9 28 99

[277] u2 =-34
12 75 6 36 48

+ 1- 116 239 u3 =-5

35 199 4 5
71
[488] u4 =-67
61 81 44 88 9
60 333 u5 =3
85 60 14 25 79
v1 =46 v2 =57 v3 =9 v4 =10 v5 =76

Table 2.2.8

31
 461 u1 =0
46 74 9 28 99

[277] u2 =12
12 75 6 36 48
1 116 239 u3 =35
35 199 4 5
71
[488] u4 =27
61 81 44 88 9
60 333 u5 =43
85 60 14 25 79
v1 =0 v2 =17 v3 =9 v4 =-30 v5 =36

Z= (9×461)+(277×12)+(1×35)+(116×5)+(239×71)+(60×60)+(333×79)+(488×9)

Z= 59,356

Optimum solution was achieved using the transportation algorithm within

five iterations an final cost was found as 59356

CHAPTER 3

32
3. IMPROVED VOGEL’S APPROXIMATION METHOD

VAM was improved by using total opportunity cost (TOC) matrix and
regarding alternative allocation costs. The TOC matrix is obtained by adding the
“row opportunity cost matrix” (row opportunity cost matrix: for each row, the
smallest cost of that row is subtracted from each element of the same row) and the
“column opportunity cost matrix” (column opportunity cost matrix: for each
column of the original transportation cost matrix the smallest cost of that column is
subtracted from each element o the same three penalty costs and calculates
alternative allocation costs in VAM procedure. Then it selects minimum one of
them. Detailed processes are given below:

Step 1: Balance the given transportation problem if either (total supply > total

demand) or (total supply < total demand).

Step 2: Obtain TOC matrix.

Step 3: Determine the penalty cost for each row and column by subtracting the

lowest cell cost in the row or column from the next lowest cell cost in

the same row or column.

Step 4: Select the rows or columns with the highest three penalty costs (breaking

ties arbitrarily or choosing the lowest-cost cell).

Step 5: Compute three transportation costs for selected three rows or columns in

33
 step 4 by allocating as much as possible to the feasible cell with the lowest

transportation cost.

Step 6: Select minimum transportation cost of three allocations in step 5 (breaking

ties arbitrarily or choosing the lowest-cost cell).

Step 7: Repeat step 3-6 until all requirements have been meet.

Step 8: Compute total transportation cost for the feasible allocations using the

Original balanced-transportation cost matrix.

For the transportation problem given in Table 1, initial solution of VAM requires
five additional iterations to reach the optimal solution. The problem was resolved
using IVAM and initial basic solution for this problem is given in Table 4. Initial
solution of IVAM is the optimal solution of the given example problem without
additional iterations. Initial cost from table 4 is 59356 and this also is the optimal
value of the considered problem.

Table 3.1

34
277 461
46 74 9 28 99 (19)

277
12 75 6 36 48 (6)
356
35 199 4 5 71 (1)
488
61 81 44 88 9 (35)
393
85 60 14 25 79 (11)

278 60 461 116 1060

(23) (21) (2) (20) (39)

Table 3.2

277 461
46 74 9 28 99 (19)

12 75 6 36 48 -
116 356
35 199 4 5 71 (1)
[488] 488
61 81 44 88 9 (35)
393
85 60 14 25 79 (11)

1 60 461 116 1060

(11) (7) (5) (20) (62)

Table 3.3

277 461 461

46 74 9 28 99 (19)

35
 12 75 6 36 48 -
116 240
35 199 4 5 71 (31)
[488] 488
61 81 44 88 9 (35)
393 393
85 60 14 25 79 (46)

1 60 461 - 1060
(11) (21) (5) (62)

Table 3.4

277
46 74 9 28 99 -

12 75 6 36 48 -
116 240
35 199 4 5 71 (31)
[488] 488
61 81 44 88 9 (35)
0 393
85 60 14 25 79 (46)

1 60 0 - 1060
(26) (21) (10) (62)

Table 3.5

277
46 74 9 28 99 -

36
 12 75 6 36 48 -
1 116 240
35 199 4 5 71 (36)
[488] 488
61 81 44 88 9 (52)
0 393
85 60 14 25 79 (19)

1 60 - - 1060
(26) (21) (62)

Table 3.6

277
46 74 9 28 99 -

12 75 6 36 48 -
1 116 239 239
35 199 4 5 71 (36)
[488] 488
61 81 44 88 9 (72)
0 393
85 60 14 25 79 (19)

- 60 - - 1060
(21) (62)

Table 3.7

277
46 74 9 28 99 -

12 75 6 36 48 -

37
1 116 239 -
35 199 4 5 71
[488] -
61 81 44 88 9
60 0 393
85 60 14 25 79 (19)

- 60 - - 572
(21) (9)

Table 3.8

277
46 74 9 28 99 -

12 75 6 36 48 -
1 116 239 239
35 199 4 5 71 (71)
[488] -
61 81 44 88 9
60 0 333 333
85 60 14 25 79 (79)

- - - - 572
(18)

Table 3.9

277
46 74 9 28 99 -

12 75 6 36 48 -
1 116 239 -

38
 35 199 4 5 71
[488] -
61 81 44 88 9
60 0 333 333
85 60 14 25 79 (79)

- - - - 333
(79)

Table 3.10

277
46 74 9 28 99

12 75 6 36 48
1 116 239
35 199 4 5 71
[488]
61 81 44 88 9
60 0 333
85 60 14 25 79

Z = (277×12)+(116×5)+(461×9)+(0×14)+(35×1)+(488×9)

+(60×60)+(71×239)+(79×333)

Z= 59,356

CONCLUSION

39
 In this project, Vogel’s Approximation Method which is one of well-known
transportation methods for getting initial solution was investigated to obtain more
efficient initial solutions. VAM was improved by using total opportunity cost and
regarding alternative allocation costs. Proposed method considers highest three
penalty costs and calculates additional two alternative allocation costs in VAM
procedure. For more penalty costs, alternative costs can be calculated but it
increases computational complexity and time too much. Therefore, IVAM consider
only two additional costs.

REFERENCES

1. V. Adlakha and K. Kowalski: A simple heuristic for solving small fixed-

charge transportation problems. Omega 31(3), 205-211, 2003.

40
2. D. R. Anderson, D. J. Sweeney and T. A. Williams: An Introduction to
management science: quantative approaches to decision making,
Minnesota: West Publishing Com[any, 1991.
3. G. S. Ramakrishnan, An improvement to Goyal’s modified VAM for the
unbalanced transportation problem, Journal of Operational Research
Society 39(6), 609-610, 1988.
4. S. K. Goyal, Improving VAM for unbalanced Transportation problems,
Journal of Operational Reserch Society 35(12), 1113-1114, 1984.
5. H. A. Taha, Operations Research: An Introduction, New York:
Macmillan Publishing Company, 1987.
6. Serdar Korukoglu of Serkan Balli, An improved Vogel’s Approximation
Method for the Transportation problem, Mathematical and
Computational Applications, 2010.

41