Presentation on:

Transportatio
n problems
By-
Ruchi Katendra
 Table of Contents
• Introduction
• Types of transportation problems
• Basic structure
• Methods to solve transportation problems

 Northwest corner method

 Least cost method
 Vogel’s Approximation method
• Comparison of all 3 methods
• Industrial application of Transportation Model
• Conclusion
 Transportation
Problems

The transportation problem is a distribution-type problem, the main goal of

which is to decide how to transfer goods from various sending locations (also
known as origins) to various receiving locations (also known as destinations)
with minimal costs or maximum profit. As long as the number of origins and
destinations is low, this is a relatively easy decision. But as the numbers grow,
this becomes a complicated linear programming problem.
 Objective

i) Maximize the profit of transporting “n” units of product to the destination “y”,

ii) Minimize the cost of shipping “n” units of product to the destination “y”.
Basic structure of transportation problem

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 Types of Transportation
problems:
‐ Balanced: When both supplies and demands are equal then the problem is said to
be a balanced transportation problem.

Demand = Supply

‐ Unbalanced: When the supply and demand are not equal then it is said to be an
unbalanced transportation problem. In this type of problem, either a dummy row
or a dummy column is added according to the requirement to make it a balanced
problem. Then it can be solved similar to the balanced problem.

Demand > Supply Supply > Demand

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 “
Methods to solve
Transportation Problem

‐ NorthWest Corner Cell Method.

‐ Least Cost Method.

‐ Vogel’s Approximation Method (VAM)

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 Northwest corner
method

The North-West Corner Rule is a method adopted to compute the

initial feasible solution of the transportation problem. The name
North-west corner is given to this method because the basic
variables are selected from the extreme left corner.

9
Lets take an
example :-
 Least Cost
Method
The Least Cost Method is another method used to obtain the initial feasible
solution for the transportation problem. Here, the allocation begins with the cell
which has the minimum cost. The lower cost cells are chosen over the higher-cost
cell with the objective to have the least cost of transportation.
 Vogel’s approximation
method
The Vogel’s Approximation Method or VAM is an iterative
procedure calculated to find out the initial feasible solution of
the transportation problem. Like Least cost Method, here also
the shipping cost is taken into consideration, but in a relative
sense.
Vogel’s Approximation Method is also called as Penalty
Method because the difference costs chosen are nothing but
the penalties of not choosing the least cost routes.
step
s:
We will repeat the same procedure of calculating penalties
of the remaining elements then allocating quantities
So, now the final matrix with all allocations is :-
 Comparison of all the 3 methods
• Northwest corner method = Rs.462
• Least cost method = Rs.300
• Vogel’s Approximation method = Rs.295

North-west corner method is used when the purpose is to complete the demand of warehouses
systematically one by one.
Advantage of Vogel’s approximation method and Least-cost method yields the best starting basic
solution because it gives initial solution near to optimal solution but the solution of Vogel’s
approximation methods is slow because computations take long time.
But the cost of transportation with Vogel's approximation method and Least-cost method is less
than North-West corner method.
So, the decision maker may choose the optimum solution after calculating through these methods
 Industrial applications of

“
Transportation Model
• Minimize • Determine the
the number of
transportat products to be
ion cost manufactured
from source according to
to demand.
destination.

• Courier • Determine
Services: Helps lowest cost
in taking proper location for
decisions to find new
the best route industries,
for offices,
transportation. warehouse,
etc.
 Conclusion
The result in three methods are different. The decision maker may choose the optimal
result of the running of the three program (minimum) and determined the number of
units transported from source i to destination j.
The transportation problem is one of the most frequently encountered applications in
real life situations. The transportation problem indicates the amount of consignment to
be transported from various origins to different destinations so that the total
transportation cost is minimized without violating the availability constraints and the
requirement constraints.
Thank you