Transportation Problem

Objective
• To transport various amounts of a
commodity that is initially stored at various
origins to different destinations in such a
way that the total transportation cost is
minimum.
 Formulation of Transportation
Problem
• Suppose a cold drink manufacturing
concern has m plants in m cities. The
manufactured product is absorbed by n
retail shops in n different cities. Here the
problem is to determine the transportation
schedule that minimizes the transportation
cost from various plants to various retail
shops.
• Let
ai > 0 i=1,2,………..,m
be the amount of cold drinks available at ith plant, Oi
bj > 0 j=1,2,………..,n
be the amount of cold drinks required at jth retail shop,
Dj
cij for all i,j
Cost of transporting one unit of cold drink from Oi to Dj
xij >=0
Amount of cold drinks to be transported from Oi to Dj
Here the problem is to determine xij.
• Minimize
Σ Xijcij
Subject to
Σ Xij = ai i=1,2,……………,m
Σ Xij = bj j=1,2,…………….,n
Xij >=0
• Feasible solution
A set of non-negative allocations xij>=0 which
satisfies the row and column restrictions.
• Optimal solution
A feasible solution which maximizes or
minimizes the value of the objective function.
 Methods of obtaining initial basic
feasible solution
• North-West corner Rule
• Least cost method
• Vogel’s Approximation Method

Method to obtain optimal solution

• Modi method (uv method)
 Example
• The Great Indian Corporation is a major producer of soft
drinks. It has four warehouses, one each located in Agra,
Bhubaneshwar, Chennai and Kolkata. It also has 4 factories
located at New Delhi, Jamshedpur, Bangalore and Asansol.
The data of warehouse demand, factory supplies and
transportation costs(Rs.) are given in the below tables:
Data of demand and supply
Supply in Cases Demand in Cases
Factory In numbers Warehouse In numbers
New Delhi 200 Agra 210
Jamshedpur 150 Chennai 200
Bangalore 120 Bhubaneshwar 300
Asansol 350 Kolkata 110
Total Supply 820 Total Demand 820
 Agra Chennai bhubaneshwar Kolkata

New Delhi 0.40 1.75 1.50 0.50

Jamshedpur 0.90 1.00 1.75 1.25

Bangalore 1.40 0.75 0.95 1.00

Asansol 1.00 1.50 1.40 1.10

The management is interested in scheduling the distribution of

soft drinks from various plants to warehouses so as to minimize
the transportation costs.
 Example
• A compressed Natural Gas (CNG) company has three plants
producing gas and four outlets. The cost of transporting gas
from different production plants to the outlets, production
capacity of each plant and requirement at different outlets is
shown in the following cost-matrix table :
Plants outlets Capacity of
A B C D production

X 4 6 8 6 700
Y 3 5 5 5 400
Z 3 9 6 5 600
Requirement 400 450 350 500 1700
Determine a transportation schedule so that the cost is
minimized. The cost in the cost-matrix is given in thousand of
rupees.
 Example
• A manufacturer of washing machines is in the process of locating regional
warehouses in four geographical locations in South India to serve the
markets. The markets are geographically and organisationally split into five
segments. Based on the forecasting estimates by the marketing department,
it has been found that the average monthly demand for the washing
machine is 2000, 1500, 1200, 2800 and 2500 in each of the market
segments. Based on this forecast and other costs including the fixed and
variable costs of setting up warehouses, it has been decided to build four
warehouses with a capacity to handle monthly requirements to the extent of
2900, 2300, 3700 and 1100 units, respectively. Due to the geographical
spread of the warehouses and the markets, the transportation cost per unit
is different between these pairs of warehouses and market segments. The
table below has the cost of transporting one unit. Identify the cost effective
way of serving the markets from these warehouses.
 Market 1 Market 2 Market 3 Market 4 Market 5

Warehouse 100 70 50 30 40
A

Warehouse 30 95 40 125 50
B

Warehouse 75 20 65 40 30
C

Warehouse 20 40 95 85 80
D
 Example
• A product is manufactured by four factories A,B,C and D. The unit production
costs are Rs.2, Rs.3, Rs.1 and Rs.5 respectively. Their daily production
capacities are 50, 70, 30 and 50 units respectively. These factories supply
the product to four stores P,Q,R and S. The demand made by these stores
are 25,35,105,20 units respectively. Unit transportation cost in rupees from
each factory to each store is given in the following table:
Stores
P Q R S
Factory A 2 4 6 11
Factory B 10 8 7 5
Factory C 13 3 9 12
Factory D 4 6 8 3
Determine the extent of deliveries from each of the factories to each of the
stores so that the total cost (production and transportation together) is
minimum.
Example
The warehouses has altogether a surplus of 35 units of a given
commodity as follows:
W1 = 14 W2 =16 W3 = 5 units
The four stores together needs 35 units of the commodity as follows:
S1=6 S2=10 S3=15 S4=2
The cost of shipping of one unit of commodity from warehouse i to
store j are as follows:
Schedule the transport to minimize the transportation cost.

S1 S2 S3 S4
W1 6 4 1 5

W2 8 9 2 7

W3 4 3 6 2
 Example
solve the following transportation
problem to minimize the cost :

D1 D2 D3 D4 Supply
O1 19 30 50 10 7
O2 70 30 40 60 9
O3 40 8 70 20 18
Demand 5 8 7 14 34
 Example
solve the following transportation
problem to minimize the cost

D1 D2 D3 Supply
O1 13 15 16 17
O2 7 11 2 12
O3 10 20 9 16
Deman 14 8 23 45
d