Transportation Problem

Introduction
Transportation problem is a special problem of its own
structure.
Planning model that allocates resources, machines,
materials, capital etc. in a best possible way
In these problems main objective generally is to minimize
the cost of transportation or maximize the benefit.
Let us structure a basic transportation problem and then
demonstrate the formulation and solution with a numerical
example
 Structure of the Problem

A classic transportation problem is concerned with the

distribution of any commodity (resource) from any group
of ‘sources’ to any group of destinations or ‘sinks’
The amount of resources from source to sink are the
decision variables
The criterion for selecting the optimal values of the
decision variables (like minimization of costs or
maximization of profits) will be the objective function
The limitation of resource availability from sources will
constitute the constraint set.
 Structure of the Problem …contd.
Let there be m origins namely O1, O2, …, Om and n
destinations D1, D2, …, Dn
Amount of commodity available in ith source is
ai, i =1,2, …, m
Demand in jth sink is bj, j = 1, 2, …, n.
Cost of transportation of unit amount of material from
i to j is cij
Amount of commodity supplied from i to j be denoted as xij
Thus, the cost of transporting xij units of commodity from i
to j is cij × xij
 Structure of the Problem …contd.
The objective of minimizing the total cost of
transportation
m n

  c ij x ij
Minimize (1)
f 
i 1 j 1
Generally, in transportation problems, the amount of
commodity available in a particular source should be
equal to the amount of commodity supplied from that
source. Thus, the constraint can be expressed as
n

x
j 1
ij  ai
i= 1, 2, …, m (2)
 Structure of the Problem …contd.
Total amount supplied to a particular sink should be equal to the
corresponding demand
m

x
i 1
ij  bj j= 1, 2, …, n (3)

The set of constraints given by eqns (2) and (3) are consistent only if
m n

 
total supply and total demand are equal
ai  b j
i 1 j 1
i= 1, 2, …, m , j= 1 ,2, …, n (4)

Which is the condition for a transportation problem to have a feasible

solution.
Problems satisfying this condition are called balanced transportation
problem.
 Structure of the Problem …contd.

But in real problems constraint (4) may not be satisfied.

Then, the problem is said to be unbalanced

Unbalanced problems can be modified by adding a

fictitious (dummy) source or destination which will
provide surplus supply or demand respectively

The transportation costs from this dummy source to all

destinations will be zero
 Structure of the Problem …contd.
Likewise, the transportation costs from all sources to a
dummy destination will be zero

This restriction causes one of the constraints to be

redundant

The non-negativity constraints can be expressed as

i= 1, 2, …, m , j= 1 ,2, …, n (5)
x ij  0
 Example (1)
Consider a transport company which has to supply 4 units
of cement from each of the cities Faizabad and Lucknow
The material is to be supplied to Delhi, Ghaziabad and
Bhopal with demands of four, one and three units
respectively
Cost of transportation per unit of supply (cij) is indicated
in the figure shown in the next slide.
Decide the pattern of transportation that minimizes the
cost.
 Example (1)…contd.
Solution:
Let the amount of
material supplied
from source i to
sink j as xij
Here m =2; n = 3.
 Example (1)…contd
Total supply = 4+4 = 8 units
Total demand = 4+1+ 3 = 8 units
Since both are equal, the problem is balanced
Objective function is to minimize the total cost of
transportation from all combinations
m n
Minimize
f   c x
i 1 j 1
ij ij

 i.e. Minimize f = 5 x11 + 3 x12+ 8 x13+ 4 x21+ x22+ 7 x23

(6)
 Example (1)…contd

The constraints are explained below:

The total amount of material supplied from each source
city should be equal to 4
3

 x ij  4 i= 1 ,2
j 1

i.e. x11 + x12+ x13 = 4 for i = 1 (7)

x21+ x22+ x23 = 4 for i = 2 (8)
 Example (1)…contd.

The total amount of material received by each destination

city should be equal to the corresponding demand
2

x
i 1
ij  bj; j  1, 2, 3

i.e. x11 + x21 = 4 for j = 1 (7)

x12 + x22= 1 for j = 2 (8)
x13 + x23 =3 for j = 3 (9)
Non-negativity constraints
xij ≥ 0; i = 1, 2; j =1, 2, 3
 Example (1)…contd.

Optimization problem has 6 decision variables and 5

constraints
Since the optimization model consists of equality
constraints, Big M method is used to solve
Since there are five equality constraints, introduce five
artificial variables viz., R1, R2,R3,R4 and R5.
 Example (1)…contd.

The objective function and the constraints can be

expressed as
 Minimize f = 5 x11 + 3 x12+ 8 x13+ 4 x21+ x22+ 7 x23
+M× R1+M× R2 +M× R3 +M× R4 +M× R5
Subject to x11 + x12+ x13 +R1 = 4
x21+ x22+ x23 + R2 = 4
x11 + x21 + R3 = 4
x12 + x22 + R4 = 1
x13 + x23 + R5 =3
 Example (1)…contd.
Modifying the objective function to make the coefficients
of the artificial variable equal to zero.
 The final form objective function is
f + (-5 + 2M )× x11 + (-3 + 2M )× x12 + (-8 + 2M )× x13 +
(-4 + 2M )× x21 + (-1 + 2M )× x22 + (-7 + 2M )× x23
− 0× R1+ 0× R2+ 0× R3+ 0× R4+ 0× R5

The solution of the model using simplex method is shown

in the following slides
Example (1)…contd.
 Example (1)…contd.
Repeating the same procedure
Minimum total cost,
f = 42
Optimum decision variable values:
x11 = 2.2430, x12 = 0.00 , x13 = 1.7570 ,
x21 = 1.7570 , x22 = 1.00 , x23 = 1.2430
 Example (2)
Consider three factories (F) located in three different
cities, producing a particular chemical. The chemical is to
get transported to four different warehouses (Wh), from
where it is supplied to the customers. The transportation
cost per truck load from each factory to each warehouse is
determined and are given in the table below. Production
and demands are also given in the table below.
Wh1 Wh2 Wh3 Wh4 PRODUC-
TION
F1 523 682 458 850 60
F2 420 412 362 729 110
F3 670 558 895 695 150
DEMAND 65 85 80 70
 Example (2) …contd.
Solution:
Let the amount of chemical to be transported from factory
i to warehouse j be xij.
Total supply = 60+110+150 = 320
Total demand = 65+85+80+70 = 300
Since the total demand is less than total supply, add one
fictitious ware house, Wh5 with a demand of 20.
Thus, m =3; n = 5
The modified table is shown as in forwarding slide.
 Example (2) …contd.

Wh1 Wh2 Wh3 Wh4 Wh5 PRODUC-

TION

F1 523 682 458 850 0 60

F2 420 412 362 729 0 110

F3 670 558 895 695 0 150

DEMAND 65 85 80 70 20
 Example (2) …contd.
Objective function is to minimize the total cost of
transportation from all combinations
Minimize f = 523 x11 + 682 x12 + 458 x13 + 850 x14 + 0 x15
+ 420 x21 + 412 x22 + 362 x23 + 729 x24 + 0 x25 + 670 x31
+ 558 x32 + 895 x33 +695 x34 + 0 x35
subject to the constraints
x11 + x12 + x13 + x14 + x15 = 60 for i = 1
x21 + x22 +x23 + x24 +x25 = 110 for i = 2
x31 + x32 + x33 + x34 + x35= 150 for i = 3
 Example (2) …contd.

x11 + x21 + x31 = 65 for j = 1

x12 + x22 + x32 = 85 for j = 2
x13 + x23 + x33 = 90 for j = 3
x14 + x24 + x34 = 80 for j = 4
x15 + x25 + x35 = 20 for j = 5
xij ≥ 0 i = 1, 2, 3; j =1, 2, 3, 4

This optimization problem can be solved using the same

procedure used for the previous problem.
 Structure of the Problem
The objective of minimizing the total cost of
transportation
Minimize m n
(1)
f  c
i 1 j 1
ij x ij
Generally, in transportation problems, the amount of
commodity available in a particular source should be
equal to the amount of commodity supplied from that
source. Thus, the constraint can be expressed as
n

x
j 1
ij  ai i= 1, 2, …, m (2)
 Structure of the Problem …contd.
Total amount supplied to a particular sink should be equal to the
corresponding demand
m

x
i 1
ij  bj j= 1, 2, …, n (3)

The set of constraints given by eqns (2) and (3) are consistent
m n
only if total supply and total demand are equal
 i 1

ai  b j
j 1
i= 1, 2, …, m , j= 1 ,2, …, n (4)

Which is the condition for a transportation problem to have a

feasible solution.
Problems satisfying this condition are called balanced
transportation problem.
 Structure of the Problem …contd.
A feasible solution to a transportation problem is said to
be a basic feasible solution if it contains at the most
( m + n -1) strictly positive allocation, otherwise the
solution will degenerate.
If the total number of positive (non zero)allocations is
exactly ( m + n -1) , then the basic feasible solution is said
to be non degenerate.
A feasible solution which minimizes the transportation
cost is called an optimal solution.
 Destinations 1 2 j n supply

1 c11 c12 c1j c1n a1

2 c21 c22 c2j c2n a2

Plants
(origins)
ci1 ci2 cij cin

i ai
s

cm1 cm2 cmj cmn

am
m

Demand b1 b2 bj bn ∑ai = ∑bj

The mn squares are called cells.
Cost of transportation of unit amount of material from
i to j is cij is displayed in the lower right side of the (i ,j)th
cell.
 Any feasible solution is shown in the table by entering
the value of the xij in the small square at the upper left side
of the (i ,j)th cell.
The various a’s and b’s are called rim requirements.
The feasibility of a solution can be verified by summing
the values of xij along the rows and down the columns.
 Example
Solve the following transportation problem
Destination
A B C D

I 21 16 25 13 11

Sources II 17 18 14 23 13 Availability

III 33 27 18 41 19

Requirements 6 10 12 15 43
 Solution
 Transportation table
Here the total availability and the total requirement being
the same i.e. 43,the problem is balanced.
Find the initial basic feasible solution
Following the Vogel’s approximation Method, the
differences between the smallest and next to the smallest
costs in each row and each column are computed and
displayed within brackets against the respective rows and
columns.
The largest of these differences is 10 which is associated
with the fourth column.
Table 1
11
21 16 25 13 11 (3)

17 18 14 23 13 (3)

32 27 18 41 19 (9)

6 10 12 15

(4) (2) (4) (10)

Since c14 is 13 is the minimum cost in the fourth column,

We allocate x14 = min(11, 15) =11. This exhaust the availability of the
first row and therefore we cross it.
Table 2
4
13 (3)
17 18 14

23

19 (9)
32 27 18
41

6 10 12 4
 For the 4th column the requirement become 4 instead of 15 because
(15) (9) (4) (18)
requirement of 11 units are satisfied.
 The row and column differences are now computed for reduced table 2
Table 3
6
9 (3)
17 18 14

19 (9)
32 27 18

6 10 12
(15) (9) (4)

The largest difference is (18) which is against the 4th column. Since 23 is the minimum
cost , we allocate x24 = min(13, 4) =4
Thus, availability of the 2nd row become 13-4 =9 in the 3rd table.
Thus, we cross 4th column and we get 3rd table, proceeding in this way finally
we get initial basic feasible solution in the 6 th table.
Table 4 Table 5
3
3 (4) 7 12
18 14 27 18 19
7 12
27 18 19 (9)
10 12

(9) (4)
Table 6

11
21 16 25 13

6 3 4
17 18 14 23

7 12
32 27 18 41
Apply optimality check
As the number of allocations = m + n-1 =6 we can apply
Modified distribution method
Table 7

vj 17 18 9 23
ui
(-) (-) (-)
11
-10 21 16 25 13
(-)
6 3 4
0 17 18 14 23

(-) 7 12 (-)
9 32 27 18 41

Solve the equations ui + vj = cij

u2 + v1 = 17, u2 + v2 = 18, u3 + v2 = 27,
u3 + v3 = 18, u2 + v4 = 23, u1 + v4 = 13
Let u2 = 0, then v1 = 17, v2 = 18, v4= 23,
u3 = 9, v3 = 9, u1 = -10
Net evaluation wij = (ui + vj ) – cij for all empty cells are
w11 = -14, w12 = -8, w13 = -26,
w23 = -5, w31 = -6, w34 = -9
Since all the net evaluations are negative, the current solution
is optimal.
Hence, the optimal allocation is given by
x14 = 11, x21 = 6, x22 = 3 x24 = 4, x32 = 7, x33 = 12
Thus, the optimal (minimum) cost =
11  13+ 6  17+ 3  18 + 4  23 + 7  27 + 12  18 = Rs. 796
 Example
A company has three cement factories located in cities
1, 2, 3 which supply cement to four projects located in
towns 1,2,3,4. Each plant can supply 6,1,10 truck loads of
cement daily respectively and the daily cement
requirements of the projects are respectively 7,5,3,2 truck
loads. The transportation costs per truck load of cement
( in hundreds of rupees) from each plant to each project
site as follows:
 Example
Project sites

1 2 3 4

1 2 3 11 7

Factories 2 1 0 6 1

3 5 8 15 9

Determine the optimal distribution for the company so as

to minimize the total transportation cost.
 Solution
Construct transportation table
Express the supply from the factories, demands at sites
and the unit shipping cost in the form of the following
transportation table.
Project sites

1 2 3 4 Supply

1 2 3 11 7 6

Factories 2 1 0 6 1 1

3 5 8 15 9 10

Demand 7 5 3 2 17
Find the initial basic feasible solution
Using VAM, the initial basic feasible solution is as shown
in table 2.The transportation cost according to this cost is
Z= Rs.(1 2 + 5 3 + 1 1 + 6 5 + 3 15 +1 9) times 100
= Rs.10,200
Table 2
1 5 6
2 3 11 7
1 1
1 0 6 1
6 3 1 10
5 8 15 9
7 5 3 2
Table 3
vj 2 3 12 6
ui
0 1 5 (+) (-)
2 3 11 7

-5 (-) (-) (+) 1

1 0 6 1

3 6 (-) 3 1
5 8 15 9

Apply optimality check

As the number of allocations = m + n -1 =6
we can apply modified distribution method.
Compute Net evaluation wij = (ui + vj ) – cij for all empty cells
As shown in table 3 the net evaluation in two cells are positive a better
solution can be found.
Table 4

1 5 (+) (-)
2 3 11 7

(-) (-) Θ (+) 1 -Θ

1 0 6 1

6 (-) 3 -Θ 1 Θ
5 8 15 9
First iteration: Choose the unoccupied cell with the maximum
wij. In case of a tie, Select the one with lower original cost.
 In table 3 cells (1,3) and (2,3) each have wij = 1 and out of
these two cell (2,3) has lower minimum cost 6, there fore we
take this as the next basic cell and note Θ in it.
Draw a closed path beginning and ending at Θ cell.
Add and subtract Θ, alternatively to and from all closed path
cells (transition cells) of the loop subject to rim requirements.
Assign a maximum value to Θ so that one basic variable
becomes zero and the other basic variables remains ≥ 0
Now the basic cell whose allocation has been reduced to zero
leaves the basis.
This gives the second basic feasible solution. (Table -5)
1 5
2 3 11 7
Θ =1 1-1
1 0 6 1

6 3-1 1+1
5 8 15 9
Total transportation cost of this revised solution
= Rs.(1 2 + 5 3 + 1 6 + 6 5 + 2 15 +2 9) times
100
= Rs.10,100
Optimality check:
 As the number of allocation in table 5 = m + n-1 = 6 we
can apply modified distribution method.
Compute the net evaluation which are as shown in
table 6.
Table 6
vj 2 3 12 6
ui
0 1 5 (+) (-)
2 3 11 7
-6 (-) (-) (-)
1
1 0 6 1
3 (-)
6 5 8 2 15 2 9

Since the cell (1,3) has a positive value, the second

feasible solution is not optimal.
Table 7

1-1 5 Θ =1
2 3 11 7
1
1 0 6 1
6 +1 2-1 2
5 8 15 9

Second iteration: In the second basic feasible solution

introduce the cell (1, 3) taking Θ = 1and drop the cell
(1, 1) Thus, we get the third basic feasible solution
(table 8)
Table 8

5 1
2 3 11 7
1
1 0 6 1

7 1 2
5 8 15 9

Optimality check
As the number of allocation in table 5 = m + n-1 = 6 we
can apply modified distribution method.
Compute the net evaluation which are as shown in table 9.
Table 9
vj 1 3 11 5
ui
0 (-) 5 1 (-)
2 3 11 7
-5 (-) (-) 1 (-)

1 0 6 1
4 (-)
7 5 8 1 15 2 9

 Since all the net evaluations are ≤ 0, this basic feasible solution is
optimal.
Total transportation cost of this revised solution
= Rs.( 5 3 + 1 11 + 1 6 + 7 5 + 1 15 +2 9) times 100
= Rs.10,000
THANK YOU