Chapter 10

Transportation and
Assignment Models

To accompany Quantitative Analysis 10-1 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Learning Objectives
Students will be able to
• Structure special LP problems
using the transportation and
assignment models.
• Use the N.W. corner, VAM,
MODI, and stepping-stone
method.
• Solve facility location and other
application problems with
transportation methods.
• Solve assignment problems with
the Hungarian (matrix reduction)
method
To accompany Quantitative Analysis 10-2 © 2003 by Prentice Hall, Inc.
for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Chapter Outline
10.1 Introduction
10.2 Setting Up a Transportation
Problem
10.2 Developing an Initial
Solution:Northwest Corner Rule
10.4 Stepping-Stone Method: Finding
a Least-Cost Solution
10.5 MODI Method
10.6 Vogel’s Approximation Method
10.7 Unbalanced Transportation
Problems
To accompany Quantitative Analysis 10-3 © 2003 by Prentice Hall, Inc.
for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Chapter Outline -
continued
10.8 Degeneracy in Transportation
Problems
10.9 More Than One Optimal Solution
10.10 Maximization Transportation
Problems
10.11 Unacceptable or Prohibited
Routes
10.12 Facility Location Analysis
10.13 Approach of the Assignment
Model
10.14 Unbalanced Assignment Models
10.15 Maximization Assignment
Problems

To accompany Quantitative Analysis 10-4 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Specialized Problems
• Transportation Problem
• Distribution of items from several
sources to several destinations.
Supply capacities and destination
requirements known.
• Assignment Problem
• One-to-one assignment of people
to jobs, etc.

Specialized algorithms
save time!

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 Importance of Special
Purpose Algorithms
• Fewer, less complicated,
computations than with simplex

• Less computer memory required

• Produce integer solutions

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for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Transportation
Problem
Des Moines Cleveland
(100 units) (200 units)
capacity required

Albuquerque Boston
(300 units) (200 units)
required Evansville required
(300 units)
capacity

Ft. Lauderdale
(300 units)
capacity

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for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Transportation Costs

To
(Destinations)
From
(Sources) Albuquerque Cleveland
Boston
Des Moines $5 $4 $3

Evansville $8 $4 $3

Fort $9 $7 $5
Lauderdale

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 Unit Shipping Cost:1Unit,
Factory to Warehouse
Albuquerque Cleveland
(A) Boston (C) Factory
(B) Capacity
Des Moines 5 4 3
(D)

Evansville 8 4 3
(E)

Fort 9 7 5
Lauderdale
(F)
Warehouse
Req.

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for Management, 8e Upper Saddle River, NJ 07458
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 Total Demand and Total
Supply
Albuquerque Cleveland
(A) Boston (C) Factory
(B) Capacity
Des Moines
100
(D)

Evansville
300
(E)

Fort
Lauderdale 300
(F)
Warehouse
Req. 300 200 200 700

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for Management, 8e Upper Saddle River, NJ 07458
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Transportation Table For
Executive Furniture Corp.
Albuquerque Cleveland
(A) Boston (C) Factory
(B) Capacity

Des Moines 5 4 3
100
(D)

Evansville 8 4 3
300
(E)

Fort 9 7 5
Lauderdale 300
(F)
Warehouse
Req. 300 200 200 700

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for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
Initial Solution Using the
Northwest Corner Rule
• Start in the upper left-hand cell
and allocate units to shipping
routes as follows:
• Exhaust the supply (factory
capacity) of each row before moving
down to the next row.
• Exhaust the demand (warehouse)
requirements of each column before
moving to the next column to the
right.
• Check that all supply and demand
requirements are met.

To accompany Quantitative Analysis 10-12 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Initial Solution
North West Corner Rule
Albuquerque Cleveland
(A) Boston (C) Factory
(B) Capacity

Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
200 100 300
(E)

Fort 9 7 5
Lauderdale 100 200 300
(F)
Warehouse
Req. 300 200 200 700

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for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 The Stepping-Stone
Method
• 1. Select any unused square to evaluate.
• 2. Begin 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).
• 3. Place + in unused square; alternate - and
+ on each corner square of the closed path.
• 4. Calculate improvement index: add
together the unit cost figures found in each
square containing a +; subtract the unit
cost figure in each square containing a -.
• 5. Repeat steps 1 - 4 for each unused
square.

To accompany Quantitative Analysis 10-14 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Stepping-Stone Method -
The Des Moines-to-
Cleveland Route
Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity

Des Moines 5 4 3
100 Start 100
(D)
- +
Evansville 8 4 3
200 100 300
(E)
+ -
Fort 9 7 5
Lauderdale 100 200 300
(F) + -
Warehouse
Req. 300 200 200 700

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for Management, 8e Upper Saddle River, NJ 07458
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 Stepping-Stone Method
An Improved Solution
Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity

Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
100 200 300
(E)

Fort 9 7 5
Lauderdale 100 200 300
(F)

Warehouse
Req. 300 200 200 700

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for Management, 8e Upper Saddle River, NJ 07458
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 Third and Final Solution
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity

Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
200 100 300
(E)

Ft Lauderdale 9 7 5
200 100 300
(F)

Warehouse
Req. 300 200 200 700

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for Management, 8e Upper Saddle River, NJ 07458
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 MODI Method: 5 Steps
1. Compute the values for each row and
column: set Ri + Kj = Cij for those
squares currently used or occupied.
2. After writing all equations,
set R1 = 0.
3. Solve the system of equations for Ri
and Kj values.
4. Compute the improvement index for
each unused square by the formula
improvement index:
Cij - Ri - Kj
5. Select the largest negative index and
proceed to solve the problem as you
did using the stepping-stone method.
To accompany Quantitative Analysis 10-18 © 2003 by Prentice Hall, Inc.
for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Vogel’s Approximation
1. For each row/column of table,
find difference between two
lowest costs. (Opportunity cost)
2. Find greatest opportunity cost.
3. Assign as many units as
possible to lowest cost square in
row/column with greatest
opportunity cost.
4. Eliminate row or column which
has been completely satisfied.
4. Begin again, omitting
eliminated rows/columns.
To accompany Quantitative Analysis 10-19 © 2003 by Prentice Hall, Inc.
for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Special Problems in
Transportation Method
• Unbalanced Problem
• Demand Less than Supply
• Demand Greater than Supply
• Degeneracy
• More Than One Optimal
Solution

To accompany Quantitative Analysis 10-20 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Unbalanced Problem
Demand Less than Supply
Customer Dummy
1 Customer Factory
2 Capacity
Factory 1 8 5 0
170

Factory 2 15 10 0
130

Factory 3 3 9 0
80

Customer
Requirements 150 80 150 380

To accompany Quantitative Analysis 10-21 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Unbalanced Problem
Supply Less than Demand
Customer Customer Customer Factory
1 2 3 Capacity

Factory 1 8 5 16
170

Factory 2 15 10 7
130

Dummy 0 0 0
80

Customer
Requirements 150 80 150 380

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for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Degeneracy
Customer Customer Customer Factory
1 2 3 Capacity

Factory 1 5 4 3
100 100

Factory 2 8 4 3
100 20 120

Factory 3 9 7 5
80 80

Customer
Requirements 100 100 100 300

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for Management, 8e Upper Saddle River, NJ 07458
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 Degeneracy - Coming Up!
Customer Customer Customer Factory
1 2 3 Capacity

Factory 1 8 5 16
70 70

Factory 2 15 10 7
50 80 130

Factory 3 3 9 10
30 50 80

Customer
Requirements 150 80 50 280

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for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
 Stepping-Stone Method -
The Des Moines-to-
Cleveland Route
Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity

Des Moines 5 4 Start 3

100 100
(D)
- +
Evansville 8 4 3
200 100 300
(E)
+ -
Fort 9 7 5
Lauderdale 100 200 300
(F) + -
Warehouse
Req. 300 200 200 700

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The Assignment Problem

Project
Person 1 2 3
Adams $11 $14 $6
Brown $8 $10 $11
Cooper $9 $12 $7

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 The Assignment
Method
1. subtract the smallest number in
each row from every number in that
row
• subtract the smallest number in
each column from every number
in that column
2. draw the minimum number of
vertical and horizontal straight lines
necessary to cover zeros in the table
• if the number of lines equals the
number of rows or columns, then
one can make an optimal
assignment (step 4)
To accompany Quantitative Analysis 10-27 © 2003 by Prentice Hall, Inc.
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 The Assignment
Method - continued
3. if the number of lines does not
equal the number of rows or
columns
• subtract the smallest number not
covered by a line from every
other uncovered number
• add the same number to any
number lying at the intersection
of any two lines
• return to step 2
4. make optimal assignments at
locations of zeros within the table
To accompany Quantitative Analysis 10-28 © 2003 by Prentice Hall, Inc.
for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
PG 10.13b
 Hungarian Method
Initial Table

Person Project
1 2 3
Adams 11 14 6

Brown 8 10 11

Cooper 9 12 7

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for Management, 8e Upper Saddle River, NJ 07458
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 Hungarian Method
Row Reduction

Person Project
1 2 3
Adams 5 8 0

Brown 0 2 3

Cooper 2 5 0

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 Hungarian Method
Column Reduction

Person Project
1 2 3
Adams 5 6 0

Brown 0 0 3

Cooper 2 3 0

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 Hungarian Method
Testing Covering
Line 2
Person Project
1 2 3
Adams 5 6 0

Brown Covering
0 0 3 Line 1

Cooper 2 3 0

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 Hungarian Method
Revised Opportunity Cost Table

Person Project
1 2 3
Adams 3 4 0

Brown 0 0 5

Cooper 0 1 0

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for Management, 8e Upper Saddle River, NJ 07458
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 Hungarian Method
Testing
Covering Covering
Person Line 1 Project Line 3

1 2 3
Adams
3 4 0

Brown Covering
0 0 5 Line 2

Cooper
0 1 0

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for Management, 8e Upper Saddle River, NJ 07458
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 Hungarian Method
Assignments

Person Project
1 2 3

Adams 6

Brown 10

Cooper 9

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for Management, 8e Upper Saddle River, NJ 07458
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Maximization Assignment
Problem

Project
1 2 3 Dummy
Adams $11 $14 $6 $0
Brown $8 $10 $11 $0
Cooper $9 $12 $7 $0
Davis $10 $13 $8 $0

To accompany Quantitative Analysis 10-36 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna
Maximization Assignment
Problem

Project
1 2 3 Dummy
Adams $32 $0 $8 $14
Brown $6 $4 $3 $14
Cooper $5 $2 $77 $14
Davis $4 $1 $6 $14

To accompany Quantitative Analysis 10-37 © 2003 by Prentice Hall, Inc.

for Management, 8e Upper Saddle River, NJ 07458
by Render/Stair/Hanna