Decision System and Analysis

Transportation, Assignment, and Transshipment Models

A.A.B. Dinariyana
Transportation problem
o A transportation problem basically deals with the problem, which aims to
find the best way to fulfill the demand of n demand points using the
capacities of m supply points.
o While trying to find the best way, generally a variable cost of shipping the
product from one supply point to a demand point or a similar constraint
should be taken into consideration.
o A transportation problem is specified by the supply, the demand, and the
shipping costs. So the relevant data can be summarized in a transportation
tableau.
o The transportation tableau implicitly expresses the supply and demand
constraints and the shipping cost between each demand and supply point.

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 Transportation problem Demand points
d1 = 45
Supply points
c11 = 8 City 1
Powerco has three electric power plants that s1 = 35
supply the electric needs of four cities.
Plant 1 c12 = 6
o The associated supply of each plant and
demand of each city is given in table below.
c13 = 10 d2 = 20
o The cost of sending 1 million kWh of c14 = 9
electricity from a plant to a city depends on City 2
the distance the electricity must travel. c21 = 9
s2 = 50
c22 = 12
Plant 2 c23 = 13
To

From c24 = 7 d3 = 30
Supply
City 1 City 2 City 3 City 4 (Million kwh) City 3
c31 = 14 c32 = 9
Plant 1 $8 $6 $10 $9 35
s3 = 40
Plant 2 $9 $12 $13 $7 50 c33 = 16
Plant 3 $14 $9 $16 $5 40 Plant 3 c34 = 5
d4 = 30
Demand
45 20 30 30
(Mil. kWh) City 4

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 Objective Function:
Mathematical models Since we want to minimize the total cost of shipping from
plants to cities;
Shipping costs, Supply, and Demand for Powerco Example Minimize Z = 8x11+6x12+10x13+9x14
+9x21+12x22+13x23+7x24
To
+14x31+9x32+16x33+5x34
From Supply (Million
City 1 City 2 City 3 City 4 kwh) Supply Constraints:
Plant 1 $8 $6 $10 $9 35 Since each supply point has a limited production capacity;
Plant 2 $9 $12 $13 $7 50 x11+x12+x13+x14 <= 35 (plant 1)
Plant 3 $14 $9 $16 $5 40 x21+x22+x23+x24 <= 50 (plant 2)
Demand (Mil. kWh) 45 20 30 30 x31+x32+x33+x34 <= 40 (plant 3)

Decision Variable: Demand Constraints:

Each demand point has a minimum required capacity;
Since we have to determine how much electricity is sent from
each plant to each city; x11+x21+x31 >= 45 (city 1)
x12+x22+x32 >= 20 (city 2)
xij = amount of electricity produced at plant i and sent to city j
x13+x23+x33 >= 30 (city 3)
x14 = amount of electricity produced at plant 1 and sent to city 4 x14+x24+x34 >= 30 (city 4)
Since a negative amount of electricity can not be shipped
all Xij’s must be non-negative;
xij ≥ 0 (i = 1,2,3; j = 1,2,3,4)
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 General description of transportation problem
o A set of m supply points from which a good is shipped.
Supply point i can supply at most si units.
o 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.
o Each unit produced at supply point i and shipped to
demand point j incurs a variable cost of cij.

xij = number of units shipped from supply point i to

demand point j

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Balanced transportation problem
$ &
If total supply equals to total demand, the problem ! 𝑆! = ! 𝑑%
is said to be a balanced transportation problem: !"# %"#

Balancing a TP if total supply exceeds Balancing a TP if total supply is less

total demand
If total supply exceeds total demand, we
can balance the problem by adding dummy
demand point. Since shipments to the
dummy demand point are not real, they are
assigned a cost of zero.
than total demand
If a transportation problem has a total
supply that is strictly less than total
demand, the problem has no feasible
solution. There is no doubt that in such
a case one or more of the demand will
be left unmet. Generally in such
situations a penalty cost is often
associated with unmet demand and as
one can guess this time the total
penalty cost is desired to be minimum
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Graphical representation of unbalanced Powerco’s problem
Supply points Demand points

c11 = 8 City 1 d1 = 40

s1 = 35 Plant 1 c12 = 6
c13 = 10 City 2 d2 = 20
c14 = 9
c15 = 0
c21 = 9
City 3 d3 = 30
c22 = 12
s2 = 50 Plant 2 c23 = 13
c24 = 7
c25 = 0
c31 = 14
City 4 d4 = 30
c32 = 9
c33 = 16
c34 = 5
s3 = 40 Plant 3 Dummy
c35 = 0 d5 = 5
City 5
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Finding basic feasible solution (bfs) for TP
Unlike other Linear Programming problems, a balanced TP with m supply
points and n demand points is easier to solve, although it has m + n equality
constraints.
The reason for that is, if a set of decision variables (xij’s) satisfy all but one
constraint, the values for xij’s will satisfy that remaining constraint
automatically.

Methods for finding the bfs for a balanced TP

o Northwest Corner Method
o Minimum Cost Method
o Vogel’s Approximation Method

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 Northwest corner method

To find the basic feasible solution (bfs) by the North West Corner method:
Begin in the upper left
(northwest) corner of the
transportation tableau and
set x11 as large as possible
(here the limitations for
setting x11 to a larger
number, will be the demand
of demand point 1 and the
supply of supply point 1.
Your x11 value can not be
greater than minimum of
this 2 values).
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 Northwest corner
Min cost = 35(8) + 10(9) + 20(12) + 20(13) + 10(16) + 30(5)
= 1180
method
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Minimum cost method
o The Northwest Corner Method does not utilize shipping costs. It can yield an initial
basic feasible solution (bfs) easily but the total shipping cost may be very high.
o The minimum cost method uses shipping costs in order come up with a bfs that has a
lower cost.
o To begin the minimum cost method, first we find the decision variable with the
smallest shipping cost (cij). Then assign xij its largest possible value, which is the
minimum of si and dj
o After that, as in the Northwest Corner Method we should 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.
o 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
Min cost = 15(8) + 30(9) + 20(6) + 20(13) + 10(16) + 30(5)
= 1080
method
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Vogel’s approximation method
o 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.

o 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.

o 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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 STEP 1: Compute the penalties

Vogel’s
approximation STEP 2: Identify the largest penalty and assign the highest possible value to the
variable

method

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 STEP 3: Identify the largest penalty and assign the highest possible value to the variable

Vogel’s
approximation STEP 4: Identify the largest penalty and assign the highest possible value to the variable

method

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 STEP 5: Identify the largest penalty and assign the highest possible value to the variable

Vogel’s
approximation
method
STEP 6: Finally the bfs is found as X12=10, X12=25, X21=45, X23=5, X32=10, and X33=30

Min cos = 45(9) + 10(6) + 10(9)

25(10) + 5(13) + 30(5)
= 1020

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Solving Powerco’s problem using Solver

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Solving unbalanced TP using Solver c11 = 8 City 1 d1 = 40

s1 = 35 Plant 1 c12 = 6
c13 = 10 d2 = 20
City 2
c14 = 9
c15 = 0
c21 = 9
c22 = 12
City 3 d3 = 30
s2 = 50 Plant 2 c23 = 13
c24 = 7
c25 = 0
c31 = 14
City 4 d4 = 30
c32 = 9
c33 = 16
c34 = 5
s3 = 40 Plant 3 Dummy
c35 = 0 d5 = 5
City 5

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Solving Powerco’s problem using LINGO 18.0

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Solving Powerco’s problem using LINGO 18.0

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Assignment problems
There is a certain class of transportation problems, called assignment problems.

Example: Machine Assignment Problem

Machineco has four machines and four jobs to be completed. Each machine must be
assigned to complete one job. The time required to set up each machine for completing
each job is shown in table below. Machineco wants to minimize the total setup time
needed to complete the four jobs. Use linear programming to solve this problem.

Time (Hours)
Machine Job 1 Job 2 Job 3 Job 4
1 14 5 8 7
2 2 12 6 5
3 7 8 3 9
4 2 4 6 10
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Machineco’s problem
Machineco must determine which machine should be assigned to each job. We define (for i, j = 1, 2, 3, 4)
o xij = 1 if machine i is assigned to meet the demands of job j
o xij = 0 if machine i is not assigned to meet the demands of job j

Ensure that each machine is

assigned to a job

Ensure that each job is

completed

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 The LP of assignment problem
o In general an assignment problem is balanced
transportation problem in which all supplies and
Let cij be the cost of assigning worker i to job j demands are equal to 1.
o Define xij = 1, if worker i is assigned to job j o The assignment problem’s matrix of costs is its
cost matrix.
0, otherwise
o All the supplies and demands for this problem
o The LP of the assignment problem is: are integers which implies that the optimal
solution must be integers.
( ( o Using the minimum cost method a highly
Minimize ! = $%& '%& degenerate basic feasible solution (bfs) is
obtained.
%+* &)*
(

Subject to '%& = 1, . = 1, … , 0
&)*
(

'%& = 1, 1 = 1, … , 0
%)*
'%& ≥ 0

Using Excel solver and Lingo to find the

minimum time for completing the job 23
 Machineco’s problem

Using Excel solver and Lingo to find the minimum time for
completing the job
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Athletes assignment problem
Best Times Backstroke Breastroke Butterfly Freestyle
Linear programming model
Carl 37.7 43.4 33.3 29.2 + (
Chris 32.9 33.1 28.5 26.4 Minimize ! = $%& '%&
David 33.8 42.2 38.9 29.6
Tony 37.0 34.7 30.4 28.5 %,* &)*
Ken 35.4 41.8 33.6 31.1 (

Subject to '%& ≤ 1, 0 = 1, … , 2
Using Excel solver and Lingo to find the best total time for
&)*
assigning the athletes
+

'%& = 1, 3 = 1, … , 4
%)*
o Let cij be the best time of assigning swimmer to style j. '%& ≥ 0
o Define xij is binary
1, if swimmer i is assigned to style j

xij =
0, otherwise

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Athletes assignment problem

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Athletes assignment problem

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Transshipment problem
o A transportation problem allows only shipments that go directly from supply points to
demand points.
o In many situations, shipments are allowed between supply points and demand points.
o Sometimes there may also be points (called transshipment points) through which goods
can be transshipped on their journey from a supply point to a demand point.
o Fortunately, the optimal solution to a transshipment problem can be found by solving a
transportation problem.
o Transshipment problems are transportation problems in which a shipment may move
through intermediate nodes (transshipment nodes) before reaching a particular
destination node.
o Transshipment problems can be converted to larger transportation problems and solved
by a special transportation program.
o Transshipment problems can also be solved by general purpose linear programming
codes.

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 Transshipment problem
Linear Programming Formulation
xij represents the shipment from node i to node j
c36
3
c13 c37 Min SScijxij
s1 1 c14 6 d1 ij
c15 c46
s.t. Sxij < si for each source (origin) i
4 c47 j
c23 c24
Sxik - Sxkj = 0 for each intermediate
c56 7 d2 i j node k (conservation of flow)
s2 2
c25
5 c57
Sxij > dj for each destination j
i
Sources Intermediate Destinations
xij > 0 for all i and j (nonnegativity)
Nodes

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 Example: Thomas & Washburn transshipment problem
Thomas & Washburn Network Representation
Thomas Industries and Washburn Corporation supply three 5
firms (Zrox, Hewes, Rockwright) with customized shelving for its
offices. They both order shelving from the same two ZROX
Zrox +50
manufacturers, Arnold Manufacturers and Supershelf, Inc. 3
Currently weekly demands by the users are 50 for Zrox, 60 for 1
Hewes, and 40 for Rockwright. Both Arnold and Supershelf can 5 1
supply at most 75 units to its customers. -75 Arnold
ARNOLD Thomas 5
6
8 8
Because of long standing contracts based on past orders, unit costs
from the manufacturers to the suppliers are: Hewes +60
HEWES

Thomas Washburn 2 4
3 4
Arnold 5 8 7
-75 Super Wash-
WASH 7
Supershelf 7 4 Shelf Burn
BURN
4 4
The cost to install the shelving at the various locations are: Rock-
Source/Supply Intermediate/ Wright +40
Zrox Hewes Rockwright Nodes Transshipment nodes
Thomas 1 5 8 Destination/
Demand nodes
Washburn 3 4 4
Find the quantities to be shipped from each source to each
destination to minimize the total shipping cost.
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 Example: Thomas & Washburn transshipment problem
Linear Programming Formulation
Decision variables defined Constraints defined
xij = amount shipped from node i to supplier j
Amount out of Arnold: x13 + x14 < 75
xik = amount shipped from node i to intermediate node k
xkj = amount shipped from intermediate node k to node j
Amount out of Supershelf: x23 + x24 < 75

Nodes: Amount through Thomas: x13 + x23 - x35 - x36 - x37 = 0

supply : 1 (Arnold), 2 (Supershelf) Amount through Washburn: x14 + x24 - x45 - x46 - x47 = 0
intermediate : 3 (Thomas), 4 (Washburn)
Demand : 5 (Zrox), 6 (Hewes), 7 (Rockwright)
Amount into Zrox: x35 + x45 = 50
Objective function defined Amount into Hewes: x36 + x46 = 60
Minimize Overall Shipping Costs: Amount into Rockwright: x37 + x47 = 40
Min = 5x13 + 8x14 + 7x23 + 4x24 + 1x35 + 5x36 + 8x37
+ 3x45 + 4x46 + 4x47
Non-negativity of variables: xij > 0, for all i and j.
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Example: Thomas & Washburn transshipment problem

Using Excel Solver to find the minimum overall shipping cost of this problem
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Example: Thomas & Washburn transshipment problem

Using Excel Solver to find the minimum overall shipping cost of this problem
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References
o Operations Research: Applications and Algorithms, Wayne L. Winston
o Introduction to Operations Research, Hillier & Lieberman, McGraw-Hill Int.
o Operations Research – An Introduction, Hamdy A. Taha, Maxwell Macmillan Int.
Edition.

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