7.

0 Transportation and Assignment Problems in Production

7.1 Resource allocation in Transportation and Job assignment Problems in Production

Resource allocation is the process of assigning and managing assets in a manner that supports an
organization’s strategic planning goals.

Resource allocation includes managing tangible assets such as hardware to make the best use of
softer assets such as human capital. Resource allocation involves balancing competing needs and
priorities, and determining the best course of action to maximize the use of resources and get the
best return on investment.

In practicing resource allocation, organizations must establish their desired goal, such as
increased revenue, improved productivity or better brand recognition. They then must assess
what resources will be needed to reach that goal.

Resource allocation often refers to activities related to project management. The term is also
used in other contexts. The resources allocated in transportation and assignment problems
include; time, money, staff, equipment, materials, information, or any other assets you need to
perform the tasks. You should take into account the scope and complexity of the task, the
availability and suitability of the resources, ad their efficiency and effectiveness when allocating
resources. By following this process, you can prioritize and allocate resources in a rational and
strategic way.

7.1 Transportation Problem in Linear Programming Problem

A transportation problem in operation research is a special type of Linear Programming Problem

used to optimize (minimize) the transportation cost and allocate resources from M source to N
destination.

Transportation problem is a special kind of Linear Programming Problem (LPP) in which goods
are transported from a set of sources to a set of destinations subject to the supply and demand of
the sources and destinations respectively such that the total cost of transportation is minimized.
Transportation problem deals with the optimal distribution of goods or resources from multiple
sources to multiple destinations.

A transportation problem is Linear Programming Problem that deals with identifying an optimal
solution for transportation and allocation of resources.

7.2 Job Assignment Problems in Linear Programming Problem

Assignment Problem is a special type of linear programming problem where the objective is to
minimize the cost or time of completing a number of jobs by a number of persons. It is the

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problem of assigning jobs to machines, one to each, so as to minimize the cost of doing all jobs,
is an assignment problem.

Assignment problem deals with allocating tasks, jobs, or resources one-to-one. It deals with
allocating various resources (items) to various activities (receivers) on a one to one basis, i.e the
number of operations are to be assigned to an equal number of operators where each operator
performs only one operation. For example, suppose an accounts officer has 4 subordinates and 4
tasks. The subordinates differ in efficiency and take different time to perform each task. If one
task is to be assigned to one person in such a way that the total person hours are minimized, the
problem is called an assignment problem. Though the assignment is a special case of
transportation problem in which the number of sources and destinations are equal.

Job assignment is important in defining roles and their associated responsibilities helps clarify
for everyone what needs to be done and who to needs to do it. A workplace where each
employee has a clearly defined set of job parameters has several benefits;

- Every person knows what to do. Every employee will know from the get-go what he or
she is responsible for and what needs to be accomplished.
- There is more collaboration. When roles are clearly defined, people simply work together
better.
- There is no overlap on work. On the flip side of what happens when no one’s assigned to
a ask and it gets overlooked, all too often, more than one person tries to complete a task
when work goes un-delegated.

7.3 Types of Transportation problems:

Balanced: When both supplies and demands are equal then the problem is said to be a balanced
transportation problem.

Unbalanced: When the supply and demand are not equal then it is said to be an unbalanced
transportation problem. In this type of problem, either a dummy row or a dummy column is
added according to the requirement to make it a balanced problem. Then it can be solved similar
to the balanced problem.
If the transportation problem is unbalanced, we have to convert it into a balanced one before
solving it. There are two possible cases:

Example 1: Consider the following transportation problem in matrix format:

D1 D2 D3 Supply
01 1 2 3 10
02 2 4 3 20
Demand 20 20 20

• Total supply = a1 + a2 = 10 + 20 = 30.

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• Total demand = b1 + b2 + b3 = 20 + 20 + 20 = 60.

 The demand exceeds the supply.

We add the dummy origin 3 to balance the problem, being a3 = 60 – 30 = 30 its supply. We
consider unit transportation costs c31, c32 and c33 to be zero. This leads to the following
balanced transportation problem in matrix format:

D1 D2 D3 Supply
01 1 2 3 10
02 2 4 3 20
03 0 0 0 30
Demand 20 20 20

 The supply exceeds the demand.

Being the total supply higher than the total demand, we add a dummy destination Dn+1 to the
problem.
The demand of the dummy destination is the difference between the total supply and the total
demand. Unit transportation costs from any origin to the dummy destination are considered to be
zero, because they do not correspond to real product transportations. However, it is possible to
assign unit transportation costs different from zero if, for instance, we want to consider the cost
of having product units stored.

Example 2:
Consider the following transportation problem in matrix format.

D1 D2 D3 Supply
01 3 2 1 50
02 6 4 4 50
Demand 20 20 20

• Total supply = a1 + a2 = 50 + 50 = 100.

• Total demand = b1 + b2 + b3 = 20 + 20 + 20 = 60.

The total supply is higher than the total demand. We add a dummy destination 4, with a demand
b4 = 100 − 60 = 40. The unit transportation costs c14 and c24 are considered as zero. The
balanced transportation problem in matrix format is:

1 2 3 4 Supply
01 3 2 1 0 50
02 6 4 4 0 50
Demand 20 20 20 40

7.4 Methods to Solve Transportation Problem:

To find the initial basic feasible solution there are three methods:

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1. North-West Corner Cell Method.
2. Least Call Cell Method.
3. Vogel’s Approximation Method (VAM)

The matrix format for the transportation problem

The relevant data for any transportation problem can be summarized in a matrix format using a
tableau called the transportation costs tableau. The tableau displays the origins with their supply,
the destinations with their demand and the transportation per-unit costs.

D D …………. D Supply
.
O1 C11 C12 …………. C1n a1
.
O2 C21 C22 C2n a2

Om1 Cm1 Cm2 …………. Cmn am

.
Deman b b …………. bn
d .

The transportation costs tableau

Example 3: The transportation costs tableau of the example above is the following:

D1 D2 D3 Supply
01 8 6 10 2000
02 10 4 9 2500
Demand 1500 2000 1000

The two origins of the problem are shown in the left column of the tableau, the bread factories
O1 and O2, and their supply are displayed in the right column. The destinations appear at the top
row of the array, bakeries D1, D2 and D3, and their demand are at the bottom row of the array.
Cells lying in the ith row and jth column of the tableau give the per-unit distribution cost
coefficient cij , i = 1, 2, j = 1, 2, 3.

7.5 The Northwest Corner method

The method starts at the Northwest-corner cell (route) of the tableau (variable x11)

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(i) Allocate as much as possible to the selected cell and adjust the associated a mounts of supply
and demand by subtracting the allocated amount.

(ii) Cross out the row or Column with zero supply or demand to indicate that no further
assignments can be made in that row or column. If both a row and a column net to zero
simultaneously, cross out one only and leave a zero supply (demand in the uncrossed-out row
(column).

(iii) If exactly one row or column is left uncrossed out, stop .otherwise, move to the cell to the
right if a column has just been crossed out or below if a row has been crossed out .Go to step (i).
Given a balanced transportation problem, and starting at a solution tableau with all the cells (i, j)
empty, the following steps lead to an initial basic feasible solution.

Example 4: Consider the balanced transportation costs tableau of the example

D1 D2 D3 Supply
01 8 6 10 2000
02 10 4 9 2500
Demand 1500 2000 1000

Supply = 2000 + 2500 = 1500 + 2000 + 1000 = Demand

Solution:

After applying the North West Corner Rule, for initial Basic Feasible Solution, the allocations
are as foll0ws:

D1 D2 D3 Supply
01 8 (1500) 6 (500) 2000
02 4 9 2500
(1500) (1000)
Demand 1500 2000 1000

The total transportation cost.

Min cost = (1500 × 8) + (500 × 6) + (1500 × 4) + (1000 × 9) = 30,000

The Northwest Corner method is a very simple procedure proposed to find a basic feasible
solution for a transportation problem. However, the unit transportation costs play no role in this
method, which simply selects the upper left-hand corner variable and assigns a value to it. We
next present another method, which takes the unit transportation costs into account, and which
usually results in a basic feasible solution close to the optimal solution.

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Example 5: Consider the following Cost minimizing Transportation problem:

D1 D2 D3 Supply
S 16 20 12 200
S 14 8 18 160
S 26 24 16 90
Demand 180 120 150

After applying the North West Corner Rule, for initial Basic feasible solution, the allocations are
as follows:

D1 D2 D3 Supply
S 16 20 (20) 12 200
(180)
S 14 8 (100) 18 (60) 160
S 26 24 16 (90) 90
Demand 180 120 150

The minimum cost using NWCM is obtained as follows:

Min cost = (16 x 180) + (20 x 20) + (100 x 8) + (60 x 18) + (90 x 16) = 6600

7.6 Least cost method

The minimum-cost method finds a better starting solution by concentrating on the cheapest
routes. The method starts by assigning as much as possible to the cell with the smallest unit cost.
Next, the satisfied row or column is crossed out and the amounts of supply and demand are
adjusted accordingly. If both a row and a column are satisfied simultaneously, only one is
crossed out, the same as in the northwest –corner method .Next ,look for the uncrossed-out cell
with the smallest unit cost and repeat the process until exactly one row or column is left
uncrossed out .

Step I write the transportation problem in a tabular form

Step II Assigns as much as possible to the cell with the smallest unit cost.

Step III the satisfied row or column is crossed out and the amount of supply and demand are
adjusted accordingly. If both a row and a column are satisfied simultaneously, only one is
crossed out.

Step IV Look for the uncrossed out cell with the smallest unit cost and repeat the process until
exactly one row or column is left uncrossed out.

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Example 6:

Solution: According to the Least Cost Cell method, the least cost among all the cells in the table
has to be found which is 1 (i.e. cell (O1, D2)).
Now check the supply from the row O1 and demand for column D2 and allocate the smaller
value to the cell. The smaller value is 300 so allocate this to the cell. The supply from O1 is
completed so cancel this row and the remaining demand for the column D2 is 350 – 300 = 50.

Now find the cell with the least cost among the remaining cells. There are two cells with the least
cost i.e. (O2, D1) and (O3, D4) with cost 2. Let’s select (O2, D1). Now find the demand and
supply for the respective cell and allocate the minimum among them to the cell and cancel the
row or column whose supply or demand becomes 0 after allocation.

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Now the cell with the least cost is (O3, D4) with cost 2. Allocate this cell with 200 as the
demand is smaller than the supply. So the column gets canceled.

There are two cells among the unallocated cells that have the least cost. Choose any at random
say (O3, D2). Allocate this cell with a minimum among the supply from the respective row and
the demand of the respective column. Cancel the row or column with zero value.

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Now the cell with the least cost is (O3, D3). Allocate the minimum of supply and demand and
cancel the row or column with zero value.

The only remaining cell is (O2, D3) with cost 5 and its supply is 150 and demand is 150 i.e.
demand and supply both are equal. Allocate it to this cell.

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Now just multiply the cost of the cell with their respective allocated values and add all of them to
get the basic solution i.e. (300 * 1) + (25 * 2) + (150 * 5) + (50 * 3) + (250 * 3) + (200 * 2) =
2400

Vogel’s approximation method (VAM)

VAM is an improved version of the least cost method that generally, but not always, produces
more efficient starting solutions.

Step I Write the TP in the tabular form

Step II For each row (column), determine a penalty measure by subtracting the smallest unit cost
element in the row (column) from the next smallest unit cost element in the same row (column)

Step III Identify the row or column with the largest penalty. Break ties arbitrarily. Allocate as
much as possible to the variable with the least unit cost in the selected row or column. Adjust the
supply and demand, and cross out the satisfied row or column. If a row and a column are
satisfied simultaneously, only one of the two is crossed out, and the remaining row (column) is
assigned zero supply (demand).

Step IV (a) if exactly one row or column with zero supply or demand remains uncrossed out,
stop.

(b) if one row (column) with positive supply (demand) remains uncrossed out, determine the
basic variable in the row (column) by the least cost method. Stop

(c) if all the uncrossed out rows and columns have (remaining) zero supply and demand,
Determine the zero basic variables by the least cost method. Stop

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(d) Otherwise, go to step II
VAM is popular because it is relatively easy to implement by hand.

Assignment 1

Use North-West Corner method and Least cost cell method to allocate the materials in order to
minimize cost of transportation. The figures in the table below are the unit cost of moving an
item from origin to a destination.

Source Lagos Akure Akwa Supply

Sokoto 90 85 70 600
Kano 175 110 95 1400
Maiduguri 205 190 130 1000
Demand 1600 1050 350

You are also required to advice on cost of transportation of items.

Assignment 2

Explain the implications of transportation and assignment models in production.

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