TRANSPORTATION MODEL

Introduction

• Special class of linear programming

• The objective is to minimize the cost of
distributing a product from a number of
sources to a number of destinations

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
                   
  24   12   16   20   1
2 100
                 
  14    33   1   23   26
3 150
                   
Require- 60 50 50 40 300
ment 100

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 Formulation
Capacity Constraints
x11 + x12 + x13 + x14 + x15 ≤ 50
x21 + x22 + x23 + x24 + x25 ≤ 100
x31 + x32 + x33 + x34 + x35 ≤ 150
Requirement Constraints
x11 + x21 + x31 ≥ 100
x12 + x22 + x32 ≥ 60
x11, x12, ……, x35 ≥ 0.
x13 + x23 + x33 ≥ 50
 
x14 + x24 + x34 ≥ 50 The problem has 8 constraints and
x15 + x25 + x35 ≥ 40 15 variables.

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 Pre-requisites for an LP
• All units available must be supplied.
• The number of constraints must equal the number of rows
and number of columns when we set up our transportation
problem.
•  Number of routes should equal the number of sources (m)
plus the number of destinations (n) minus one, i.e. there will
be m + n – 1

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 Transportation method
• The steps involved in transportation method are:
Step 1: Determine a basic feasible solution, using any one of the
following three methods:
• North West Corner Method
• Least Cost Method
• Vogel Approximation Method
Step 2: Determine the optimal solution using the MODI (Modified
Distribution Method) or U-V Method.

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 North west corner method
• The steps involved in transportation method are:
– The method starts at the North West (upper left) corner
cell of the table.
– Allocate as much as possible to the selected cell, and
adjust the associated amounts of capacity (supply) and
requirement (demand) by subtracting the allocated
amount.

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 North west corner method
 Cross out the row (column) with zero supply or
demand to indicate that no further assignments
can be made in that row (column).
 If both the row and column becomes zero
simultaneously, cross out one of them only, and
leave a zero supply or demand in the uncrossed
out row (column).
 If exactly one row (column) is left uncrossed out,
then stop. Otherwise, move to the cell to the right
if a column has just been crossed or the one
below if a row has been crossed out. Repeat step1

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100
                 
  14    33   1   23   26
3 150
                   
Require- 100 60 50 50 40 300
ment

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100
50                 
  14    33   1   23   26
3 150
                   
Require- 100 60 50 50 40 300
ment 50

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100
50    50              
  14    33   1   23   26
3 150
                   
Require- 100 60 50 50 40 300
ment 50

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 50
 50   50              
  14    33   1   23   26
3 150
    10
               
100 60 50 50 40 300
Require-ment 50 10

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 50
 50   50              
  14    33   1   23   26
3 150 140
    10    50
           
100 60 50 50 40 300
Requirement 50 10

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 50
 50   50              
  14    33   1   23   26
3 150 140 90
    10     50      
50    
40
100 60 50 50 40 300
Requirement 50 10

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 Example 1
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 50
 50   50              
  14    33   1   23   26
3 150 140 90
    10     50   50    40   
100 60 50 50 40 300
Requirement 50 10

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 Least cost method
• The steps involved are:
– Start by allocating as much as possible to the cell with the
smallest unit cost.
– If there are two or more minimum costs then we should
select the row and the column corresponding to the lower
numbered row.
– If they appear in the same row we should select the lower
numbered column.

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 Least cost method
• Cross out the satisfied row or column, and adjust the
amounts of capacity and requirement accordingly.
• If both a row and a column are satisfied simultaneously, only
one is crossed out.
• Next, we look for the uncrossed-out cell with the smallest
unit cost and repeat the process until we are left at the end
with exactly one uncrossed-out row or column.

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 Example
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
50
                   
  24   12   16   20   1
2 100
                 
  14    33   1   23   26
3 150
                   
100 60 50 50 40 300
Require-ment

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 Example (contd.)
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100
               
40  
  14    33   1   23   26
3 150
                   

Require- 100
60 50 50 40 300
ment 50

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 Example (contd.)
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 60
               40  
  14    33   1   23   26
3 150
        50
           
100
60 50 50 40 300
Requirement 50

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 Example (contd.)
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 60
    60            40  
  14    33   1   23   26
3 150 100
         50          

Require- 100
60 50 50 40 300
ment 50

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 Example (contd.)
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 60
    60            40  
  14    33   1   23   26
3 150 100
 
50        50          

Require- 100
60 50 50 40 300
ment 50

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 Example (contd.)
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 60
    60            40  
  14    33   1   23   26
3 150 100 50
 50        50   50        

Require- 100
60 50 50 40 300
ment 50

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 Example (contd.)
Retail Agency
Factories Capacity
1 2 3 4 5
1   9   13   36   51
1 50
 50                  
  24   12   16   20   1
2 100 60
    60            40  
  14    33   1   23   26
3 150 100 50
 50        50   50       

Require- 100
60 50 50 40 300
ment 50

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 Example (contd.)

• So, transportation cost is :

Z=1 * 50 + 12 * 60 + 1 * 40 + 14 * 50 + 1 * 50
+ 23 * 50 = 2710

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 Vogel Approximation Method (VAM)
• The steps involved in this method are:
– For each row (column) with positive capacity (requirement),
determine a penalty by subtracting the smallest unit cost element
in the row (column) from the next smallest unit cost element in the
same row (column).
– Identify the row or column with the largest penalty among all the
rows and columns.
– If the penalties corresponding to two or more rows or columns are
equal we select the topmost row and the extreme left column.

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 Example
Destination

Origin 1 2 3 4 ai
20   22   17   4
1 120
               
  25   37   9   7
2 70
               
  32   37   20   15
3 50
               
bj 60 40 30 110 240

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 17-4 =
1 120
    40            13
  25   37   9   7
2 70
                9-7=2
  32   37   20   15 20-15
3 50
                =5
bj 60 40 30 110 240
Row 25-20
37-22 =15 17-9=8 7-4= 3
Penalty =5

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120 17-4 =
1
     40       80    80 13
  25   37   9   7
2 70
                9-7=2
  32   37   20   15 20-15
3 50
                =5
bj 60 40 30 110 240
Row 25-20
X 17-9=8 7-4= 3
Penalty =5

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120
1 X
     40        80   80
  25   37   9   7
2 70
        30        9-7=2
  32   37   20   15 20-15
3 50
                =5
bj 60 40 30 110 30 240
Row 32-25
X 20-9=11 15-7= 8
Penalty =7

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120
1 X
     40        80   80
  25   37   9   7 70 25-
2
         30   30    40 7=18
  32   37   20   15 32-15
3 50
                =17
bj 60 40 30 110 30 240
Row 32-25
X X 15-7= 8
Penalty =7

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120
1 X
     40        80   80
  25   37   9   7 70 25-
2
         30    30   40 7=18
  32   37   20   15 32-15
3 50
                =17
bj 60 40 30 110 30 240
Row 32-25
X X 15-7= 8
Penalty =7

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120
1 X
     40        80   80
  25   37   9   7 70 40
2
 
10       30    30   10 nil
  32   37   20   15
3 50
                nil
bj 60 40 30 110 30 240
Row 32-25
X X X
Penalty =7

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120
1 X
     40        80   80
  25   37   9   7 70 40
2
10        30    30   10 X
  32   37   20   15
3 50
                nil
bj 60 50 40 30 110 30 240
Row X X X X
Penalty

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 Example (contd.)
Destination
Column
Origin 1 2 3 4 ai penalty
20   22   17   4 120
1 X
     40        80   80
  25   37   9   7 70 40
2
10        30    30   10 X
  32   37   20   15
3 50
50               X
bj 60 50 40 30 110 30 240
Row X X X X
Penalty

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 Example (contd.)
• The transportation cost is:
Z = 22 * 40 + 4 * 80 + 10 *25 + 9 * 30 + 7 * 30
+ + 32 * 50 = 3530.

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Step 2: Determine the optimal solution
• MODI method or u-v method: Example

Retail Agency
Factories 1 2 3 4 5 Capacity
1   9   13   36   51
1 50
50                  
  24   12   16   20   1
2 100
    60           40  
  14   33   1   23   26
3 150
50   10   50   40      
Requirement 100 70 50 40 40 300

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 Step 2: Determine the optimal
solution
From duality theory: Cij = ui + vj
C11 = u1 + v1 = 1
C22 = u2 + v2 = 12
C25 = u2 + v5 = 1 Here ui and vj are dual
C31 = u3 + v1 = 14 variable associated with
C32 = u3 + v2 = 33 row i and column j.
C33 = u3 + v3 = 1
C34 = u3 + v4 = 23

Since there are m + n (8) unknowns and m + n – 1 (7) equations

Substitute u3 = 0

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Step 2: Determine the optimal solution
Retail Agency
Capac ui
Factories 1 2 3 4 5
ity
1   9   13   36   51
1 50
50                   -13
  24   12   16   20   1
2 100
    60           40   -21
  14   33   1   23   26
3 150
50   10   50   40       0
Requirem 100 70 50 40 40 300
ent
vj 14 33 1 23 22

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 Step 2: Determine the optimal
solution
• If for all empty cells i.e. if xij=0, cij – ui – vj ≥ 0, then the
corresponding solution of the transportation problem is
optimum.
• If one or more cij – ui – vj < 0, select the cell with the least
value of cij – ui – vj and allocate as much as possible subject
to the row and column constraints.

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Step 2: Determine the optimal solution
Computing cij – ui – vj for each non-empty cell
Cell(1,2)= c12-u1-v2 = 9+13-33 = -11
Cell(1,3)= c13-u1-v3 = 13+13-1 = 25
Cell(1,4)= c14-u1-v4 = 36+13-23 = 26
Cell(1,5)= c15-u1-v5 = 51+13-22 = 42
Cell(2,1)= c21-u2-v1 = 24+21-14 = 31
Cell(2,3)= c23-u2-v3 = 16+21-1 = 36
Cell(2,4)= c24-u2-v4 = 20+21-23 = 18
Cell(3,5)= c35-u3-v5 = 26-0-22 = 4

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Step 2: Determine the optimal solution
Retail Agency
Capacit
Factories 1 2 3 4 5 y ui
- 1  + 9   13   36   51
1 50
50     -11   25   26   42 -13
 + 24  - 12   16   20   1
2 100
  31 60     36   18 40   -21
  14   33   1   23   26
3 150
50   10   50   40     4 0
Requireme 100 70 50 65 40 300
nt
vj 14 33 1 23 22

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Step 2: Determine the optimal solution
Following simple rules will help us determine the closed
loop path.
• There can be only one increasing and one decreasing cell
in any row or column
• Except for the entering cell, all changes must involve
nonempty (basic) cells.

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Step 2: Determine the optimal solution
Retail Agency
Capacit
Factories 1 2 3 4 5 y ui
- 1  + 9   13   36   51
1 50
40   10  -11   25   26   42 -13
 + 24  - 12   16   20   1
2 100
  31 60     36   18 40   -21
  14   33   1   23   26
3 150
60   0   50   40     4 0
Requireme 100 70 50 65 40 300
nt
vj 14 33 1 23 22

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Step 2: Determine the optimal solution
• Thus, the revised basic feasible solution is as follows:
  x11=40, x12=10, x22=60, x25=40, x31=60, x33=50, x34=40
and revised cost is
Z= 1*40+ 9*10+12*60+ 1*40+ 14*60+ 1*50+23*40= 2700

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 Unbalanced transportation problem
 Total supply is not equal to the total demand,
 If the total supply is more than the total
demand, introduce an additional column which
will indicate the surplus supply with
transportation cost zero.
 Similarly, if the total demand is more than the
total supply, introduce an additional row which
will indicate unsatisfied demand with
transportation cost zero

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 Example
 Consider the following unbalanced
transportation problem given in Table
Warehouse
Plant W1 W2 W3 Supply
X 20 17 25 400
Y 10 10 20 500
Demand 400 400 500

In this problem the demand is 1300 whereas the total

supply is 900. Thus, we now introduce an additional row
with zero transportation cost denoting the unsatisfied
demand

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 Degenerate transportation problem

• In a transportation problem, if a basic solution with m

origins and n destinations has less than m + n -1
occupied cells, then the problem is said to be a
degenerate transportation problem.

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 Example
 Consider the following degenerate
transportation problem given in Table
Warehouse
Plant W1 W2 W3 Supply
(aj)
X 20 17 25 400
Y 10 10 20 500
Unsatisfied 0 0 0 400
demand
Demand (bj) 400 400 500 1300

Problem is degenerate because:

a1 = 400 = b1
a2 + a3 = 900 = b2 + b3
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Limitations of transportation problem
• Difficult to generalize the technique to accommodate :
• Economy of scale the per-unit cost of transportation on a
link decreasing with the volume
• Fixed-cost of transportation usually involves fixed charges
• Invalid for multiple commodities

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 References
• Operations Research By J K Sharma
• Operations Research By Chawla, Gupta
• Quantitative Techniques By N. D. Vohra