TRANSPORTATION MODEL

CHAPTER 7
Transportation Model

• Is a linear programming problem in which a product is to be transported from a

number of sources to a number of destination at a minimum cost or maximum
profit
• Destination
• A point of demand in a transportation problem
• Origin
• Is the source or supply location in a transportation problem
• Unused squares
• Represent routes where no quantity is shipped between a source and a destination
• Stone squares
• Used squares in a transportation problem
Methods in Establishing the Initial Feasible
Solution

• Northwest Corner Rule (NCR)

• A procedure for obtaining an initial feasbible solution to a transportation
problem that starts with allocating units to the upper left-hand corner of any
transportation problem
• Minimum Cost Method (MCM) or Greedy Method
• A systematized procedure used to find an initial feasible solution to a
transportation problem
• Vogel’s Approximation method ( VAM)
• An algorithm that finds an initial feasible solution to a transportation problem
by considering the “penalty cost” of not using the cheapest available route
Transportation Tableau

From/ To A B C Supply

1 7 5 9 150

2 10 12 10 200

3 6 3 14 50

Demand 100 80 220 400

A. Steps in Northwest Corner Rule

1. Start in the upper left-hand corner (origin1, destination A) and allocate as many units as
possible to this cell. That is, use as much supply from origin A as possible, to satisfy demand
of destination A. This means that the amount allocated is the minimum of supply at 1 and
demand of A
2. Reduce the available supply at the current origin and unsatisfied demand at the current
destination by the amount of allocation
3. Identify the first origin with the available supply. This is either the current origin or the one
directly below it
4. Identify the first destination with unsatisfied demand. This is either the current destination
or the one immediately to the right of it
5. Allocate, as in step 1, as many items as possible to the route associated with the origin-
destination combination identified in step 3 and 4
6. Return to step 2
Solution

From/ To A B C Supply

1 100 7 50 5 150

2 30 12 170 10 200

3 50 14 50

Demand 100 80 220 400

Solve for the Stone Squares

Source-Destination Quantity Shipped X Unit Total Cost

Combination Cost
1A 100*7 700
1B 50*5 250
2B 30*12 360
2C 170*10 1,700
3C 50*14 700
Total Transportation Cost PHP 3,710
B. Steps in Minimum Cost Method (MCM) or
Greedy Method

1. Identify the cell that has the lowest unit cost, if there is a tie, select one
arbitrarily. Allocate the quantity to this cell that is equal to the lower of
the available supply for the row and the demand from the column
2. Mark out the cell in the row or column that has been exhausted ( or both,
if both have been exhausted), and adjust the remaining row or column total
accordingly
3. Identify the cell with the lowest cost from the remaining cells. Allocate
a quantity tot his cell that is equal to the lower of the available supply of
the row and the demand for the column
4. Repeat steps 2 and 3 until all supplies and demands have been allocated
Solution

From/ To A B C Supply

1 100 7 30 5 20 9 150

2 200 10 200

3 50 3 50

Demand 100 80 220 400

Solve for the Stone Squares

Source-Destination Quantity Shipped X Unit Total Cost

Combination Cost
1A 100*7 700
1B 30*5 150
1C 20*9 180
2C 200*10 2,000
3B 50*3 150
Total Transportation Cost PHP 3,180
C. Steps in Vogel’s Approximation Method
(VAM)
1. For each row with an available supply and each column with an unfilled demand, calculate
an opportunity/penalty cost ( cost of the opportunities that are sacrificed in order to take a
certain action) by subtracting the smallest entry from the second smallest entry for a
minimization problem. For maximization, calculate the highest and the second highest entry
2. Identify the row or column with the largest opportunity/penalty cost for minimization or
opportunity/penalty profit for maximization
3. Allocate the maximum amount possible to the available route with the lowest cost for
minimization or highest revenue for maximization in the row or column selected in step 2
4. Reduce the appropriate supply and demand by the amount allocated in step 3
5. Remove any rows with zero available supply and columns with zero unfilled demand for
further consideration
6. Return to step 1
Solution

From/ To A B C Supply

1 100 7 30 5 20 9 150

2 200 10 200

3 50 3 50

Demand 100 80 220 400

Solve for the Stone Squares

Source-Destination Quantity Shipped X Unit Total Cost

Combination Cost
1A 100*7 700
1B 30*5 150
1C 20*9 180
2C 200*10 2,000
3B 50*3 150
Total Transportation Cost PHP 3,180
Watch also this tutorial video
http://youtube.com/watch?v=ItOuvM2KmD4
Exercise No. 1
From/ To A B C Supply
1 14 8 3 20
2 9 5 7 40
3 6 12 4 30
Demand 35 30 25 90
Compute for the Total Transportation Cost Using the three (3) different
methods
A. Northwest Corner Rule
B. Minimum Cost Method
C. Vogel’s Approximation Method