Q.

1 Four factories, A, B, C and D produce sugar and the capacity of each factory is given below: Factory A produces 10 tons of sugar and B produces 8 tons of sugar, C produces 5 tons of sugar and that of D is 6 tons of sugar. The sugar has demand in three markets X, Y and Z. The demand of market X is 7 tons, that of market Y is 12 tons and the demand of market Z is 4 tons. The following matrix gives the transportation cost of 1 ton of sugar from each factory to the destinations. Find the Optimal Solution for least cost transportation cost. Factories. Cost in Rs. per ton ( 100) Markets. X Y A 4 3 B 5 6 C 6 4 D 3 5 Requirement in 7 12 tons. Availability tons. Z 2 1 3 4 4 10 8 5 6
b = 29, d = 23

in

Here b is greater than d hence we have to open a dummy column whose requirement constraint is 6, so that total of availability will be equal to the total demand. Now let get the basic feasible solution by three different methods and see the advantages and disadvantages of these methods. After this let us give optimality test for the obtained basic feasible solutions.

Solution:- Balance the problem. That is see whether bi = d j. If not open a dummy column or dummy row as the case may be and balance the problem.
In this method, we use concept of opportunity cost. Opportunity cost is the penalty for not taking correct decision. To find the row opportunity cost in the given matrix deduct the smallest element in the row from the next highest element. Similarly to calculate the column opportunity cost, deduct smallest element in the column from the next highest element. Write row opportunity costs of each row just by the side of availability constraint and similarly write the column opportunity cost of each column just below the requirement constraints. These are known as penalty column and penalty row. The rationale in deducting the smallest element form the next highest element is: Let us say the smallest element is 3 and the next highest element is 6. If we transport one unit through the cell having cost Rs.3/-, the cost of transportation per unit will be Rs. 3/-. Instead we transport through the cell having cost of Rs.6/-, then the cost of transportation will be Rs.6/- per unit. That is for not taking correct decision; we are spending Rs.3/- more (Rs.6 Rs.3 = Rs.3/-). This is the penalty for not taking correct decision and hence the opportunity cost. This is the lowest opportunity cost in that particular row or column as we are deducting the smallest element form the next highest element. Note: If the smallest element is three and the row or column having one more three, then we have to take next highest element as three and not any other element. Then the opportunity cost will be zero. In general, if the row has two elements of the same magnitude as the smallest element then the opportunity cost of that row or column is zero. (ii) Write row opportunity costs and column opportunity costs as described above. (iii) Identify the highest opportunity cost among all the opportunity costs and write a tick ( ) mark at that element. ( iv ) If there are two or more of the opportunity costs which of same magnitude, then select any one of them, to break the tie. While doing so, see that both availability constraint and requirement constraint are simultaneously satisfied. If this happens, we may not get basic feasible solution i.e solution with m + n 1 allocations. As far as possible see that both are not satisfied simultaneously. In case if inevitable, proceed with allocations. We may not get a solution with, m + n 1 allocations. For this we can allocate a small element epsilon () to any one of the empty cells. This situation in transportation problem is known as degeneracy. (This

i. ii.

will be discussed once again when we discuss about optimal solution). In transportation matrix, all the cells, which have allocation, are known as loaded cells and those, which have no allocation, are known as empty cells. (Note: All the allocations shown in matrix 1 to 6 are tabulated in the matrix given below:)

Consider matrix (1), showing cost of transportation and availability and requirement constraints. In the first row of the matrix, the lowest cost element is 0, for the cell ADummy and next highest element is 2, for the cell AZ. The difference is 2 0 = 2. The meaning of this is, if we transport the load through the cell A-Dummy, whose cost element is 0, the cost of transportation will be = Rs.0/- for each unit transported. Instead, if we transport the load through the cell, AZ whose cost element is Rs. 2/- the transportation cost is = Rs.2/- for each unit we transport. This means to say if we take decision to send the goods through the cell AZ, whose cost element is Rs.2/- then the management is going to loose Rs. 2/- for every unit it transport through AZ. Suppose, if the management decide to send load through the cell AX, Whose cost element is Rs.4/-, then the penalty or the opportunity cost is Rs.4/-. We write the minimum opportunity cost of the row outside the matrix. Here it is shown in brackets. Similarly, we find the column opportunity costs for each column and write at the bottom of each corresponding row (in brackets). After writing all the opportunity costs, then we select the highest among them. In the given matrix it is Rs.3/- for the rows D and C. This situation is known as tie. When tie exists, select any of the rows of your choice. At present, let us select the row D. Now in that row select the lowest cost cell for allocation. This is because; our objective is to minimize the transportation cost. For the problem, it is D-dummy, whose cost is zero. For this cell examine what is available and what is required? Availability is 6 tons and requirement is 5 tons. Hence allocate 5 tons to this cell and cancel the dummy row from the problem. Now the matrix is reduced to 3 4. Continue the above procedure and for every allocation the matrix goes on reducing, finally we get all allocations are over. Once the allocations are over, count them, if there are m + n 1 allocations, then the solution is basic feasible solution. Otherwise, the degeneracy occurs in the problem. To solve degeneracy, we have to add epsilon (), a small element to one of the empty cells. This we shall discuss, when we come to discuss optimal solution. Now for the problem the allocations are:

From A A B B C D D

To X Y X Z Y X DUMMY

Load 3 7 3 5 5 1 5 Total Rs.

Cost in Rs. 3 4 = 12 7 3 = 21 3 5 = 15 5 1 = 05 5 4 = 20 1 3 = 03 5 0 = 00 76

Now let us discuss the method of getting optimal solution or methods of giving optimality test for basic feasible solution. Optimality Test: (Approach to Optimal Solution) Once, we get the basic feasible solution for a transportation problem, the next duty is to test whether the solution got is an optimal one or not? This can be done by two methods. (a) By Stepping Stone

Method, and (b) By Modified Distribution Method, or MODI method. (a) Stepping stone method of optimality test To give an optimality test to the solution obtained, we have to find the opportunity cost of empty cells. As the transportation problem involves decision making under certainty, we know that an optimal solution must not incur any positive opportunity cost. Thus, we have to determine whether any positive opportunity cost is associated with a given progarmme, i.e., for empty cells. Once the opportunity cost of all empty cells are negative, the solution is said to be optimal. In case any one cell has got positive opportunity cost, then the solution is to be modified. The Stepping stone method is used for finding the opportunity costs of empty cells. Every empty cell is to be evaluated for its opportunity cost. To do this the methodology is: 1. Put a small + mark in the empty cell. 2. Starting from that cell draw a loop moving horizontally and vertically from loaded cell to loaded cell. Remember, there should not be any diagonal movement. We have to take turn only at loaded cells and move to vertically downward or upward or horizontally to reach another loaded cell. In between, if we have a loaded cell, where we cannot take a turn, ignore that and proceed to next loaded cell in that row or column. 3. After completing the loop, mark minus () and plus (+) signs alternatively. 4. Identify the lowest load in the cells marked with negative sign. 5. This number is to be added to the cells where plus sign is marked and subtract from the load of the cell where negative sign is marked. 6. Do not alter the loaded cells, which are not in the loop. 7. The process of adding and subtracting at each turn or corner is necessary to see that rim requirements are satisfied. 8. Construct a table of empty cells and work out the cost change for a shift of load from loaded cell to loaded cell. 9. If the cost change is positive, it means that if we include the evaluated cell in the programme, the cost will increase. If the cost change is negative, the total cost will decrease, by including the evaluated cell in the programme. 10. Once all the empty cells have positive cost change, the solution is said to be optimal. One of the drawbacks of stepping stone method is that we have to write a loop for every empty cell. Hence it is tedious and time consuming. Hence, for optimality test we use MODI method rather than the stepping stone method. Let us take the basic feasible solution we got by Vogel's Approximation method and give optimality test to it by stepping stone method. Basic Feasible Solution obtained by VAM:

Table showing the cost change and opportunity costs of empty cells:

S.No.

Empty Cell AZ A Dummy BY B DUMMY CX CZ C DUMMY DY DZ

Evalution Loop formation +AZ AX + BX BZ

Cost change in Rs. +2 4 + 5 1 = + 2

1. 2 3 4 5 6 7 8 9

+ A DUMMY AX + BX B DUMMY +0 4 + 3 0 = 1 + BY AY + AX BX +6 3 + 4 5 = +2

+ B DUMMY BX + DX D DUMMY +0 5 +3 0 = 2 +CX CY + AX AY +CZ BZ + BX AX + AY CY + C DUMMY D DUMMY + DX AX + AY CY +DY DX + AX AY +DZ DX +BX BZ 6 4 + 3 4 = +1 +2 1 +5 4 +5 4 =+1 + 0 0 +3 4 +3 4 = 2 +5 3 +4 3 = +3 +4 3 + 5 1 = +5

In the table 1 cells A DUMMY, B DUMMY, C DUMMY are the cells which are having negative cost change. Between these two cells B DUMMY and C DUMMY are the cells, which are having higher negative cost change i.e Rs. 2/ - each. Let us select any one of them to include in the improvement of the present programme. Let us select C DUMMY.

S.No.

Empty Cell AX AX ADUMMY BY B DUMMY CX CZ DY DZ

Evalution Loop formation +AX DX + D DUMMY C DUMMY + CY AY AZ AY + CY C DUMMY + D DUMMY DX+ BX BZ + A DUMMY AY + DX D DUMMY +BY BX + DX D DUMMY + C DUMMY CY

Cost change in Rs. +43+00+43=+2 +23+40+03+ 30=+4 +04+30=1 + 6 5 + 3 0 + 0 4 = 0

1 2 3 4 5 6 7 8 9

+ B DUMMY BX + DX D DUMMY + 0 5 + 3 0 = 2 + CX DX + D DUMMY C DUMMY + 6 3 + 0 0 = +3 + CZ C DUMMY + D DUMMY DX + BX BZ DY CY + C DUMMY D DUMMY + DZ DX + BX BZ +20+03+51=+3 +54+00=1 + 4 3 +5 1 = + 5

Cells A DUMMY and B DUMMY are having negative cost change. The cell B DUMMY is having higher negative cost change. Hence let us include this cell in the next programme to improve the solution.
S.No 1 2 3 4 5 6 7 Loaded cell AY BX BZ B DUMMY CY C DUMMY DX Total in Rs. Load 10 01 05 02 02 03 06 Cost in Rs. 10 3 = 30 01 5 = 05 05 1 = 05 02 0 = 00 02 4 = 08 03 0 = 00 06 3 = 18 66

Total minimum transportation cost is Rs. 66/Modified Distribution Method of Optimality test In stepping stone method, we have seen that to get the opportunity cost of empty cells, for every cell we have to write a loop and evaluate the cell, which is a laborious process. In MODI (Modified DIstribution method, we can get the opportunity costs of empty cells without writing the loop. After getting the opportunity cost of all the cells, we have to select the cell with highest positive opportunity cost for including it in the modified solution. Steps in MODI method: 1. Select row element (ui) and Column element (vj) for each row and column, such that ui + vj = the actual cost of loaded cell. In MODI method we can evaluate empty cells simultaneously and get the opportunity cost of the cell by using the formula (ui + vj) Cij, where Cij is the actual cost of the cell. 2. In resource allocation problem (maximization or minimization method), we have seen that once any variable becomes basis variable, i.e., the variable enters the programme; its

opportunity cost or net evaluation will be zero. Here, in transportation problem also, once any cell is loaded, its opportunity cost will be zero. Now the opportunity cost is given by (ui+ vj) Cij, which is, equals to zero for a loaded cell. i.e. (ui + vj) Cij = 0 which means, (ui + vj) = Cij. Here (ui + vj) is known as implied cost of the cell. For any loaded cell the implied cost is equals to actual cost of the cell as its opportunity cost is zero. For any empty cell, (implied cost actual cost) will give opportunity cost. 3. How to select ui and vj? The answer is: (a) Write arbitrarily any one of them against a row or against a column. The written ui or vj may be any whole number i.e ui or vj may be or to zero. By using the formula (ui + vj) = Cij for a loaded cell, we can write the other row or column element. For example, if the actual cost of the cell Cij = 5 and arbitrarily we have selected ui = 0, then vj is given by ui + vj = 0 + vj = 5. Hence vj = 5. Like this, we can go from loaded cell to loaded cell and complete entering of all ui s and vj s. (b) Once we get all ui s and vj s, we can evaluate empty cells by using the formula (ui + vj) Actual cost of the cell = opportunity cost of the cell, and write the opportunity cost of each empty cell at left hand bottom corner. (c) Once the opportunity costs of all empty cells are negative, the solution is said to be optimal. In case any cell is having the positive opportunity cost, the programme is to be modified. Remember the formula that IMPLIED COST OF A CELL = ui + vj Opportunity cost of loaded cell is zero i.e (ui + vj) = Actual cost of the cell. Opportunity cost of an empty cell = implied cost actual cost of the cell = (ui+ vj) Cij (d) In case of degeneracy, i.e. in a basic feasible solution, if the number of loaded cells are not equals to m + n 1, then we have to add a small element epsilon (), to any empty cell to make the number of loaded cells equals to m + n 1. While adding '' we must be careful enough to see that this should not form a closed loop when we draw horizontal and vertical lines from loaded cell to loaded cell. In case the cell to which we have added forms a closed loop, then if we cannot write all ui s and vj s. is such a small element such that a + = a or a = a and = 0.

Implied cost Actual cost ui + vj > ui + vj = C ij C ij

Action A better programme can be designed by including this cell in the solution. Indifferent; however, an alternative programme with same total cost can be written by including this cell in the programme. Do not include this cell in the programme.

ui + vj <

C ij

Now let us take the basic feasible solution obtained by VAM method and apply MODI method of optimality test. Basic feasible solution got by VAM method.

The cell C DUMMY is having a positive opportunity cost. Hence we have to include this cell in the programme. The solution has m + n 1 allocations.

The cell B DUMMY is having a positive opportunity cost. Ths is to be included in the modified programme.

As the opportunity cost of all empty cells are negative, the solution is optimal. The solution has m + n 1 allocations. The allocations are:

S.No 1 2. 3. 4. 5. 6. 7.

Loaded Cell AY BX BZ B DUMMY CY C DUMMY CX Total Cost in Rs.

Load 10 01 05 02 02 03 06

Cost in Rs. 10 3 = 30 01 5 = 05 05 1 = 05 02 0 = 00 02 4 = 08 03 0 = 00 06 3 = 18 66

All you can verify the optimal solution got by Stepping stone method and the MODI method they are same. And they can also verify the opportunity costs of empty cells they are also same. This is the advantage of using MODI method to give optimality test. Hence the combination of VAM and MODI can be conveniently used to solve the transportation problem when optimal solution is asked. Question 2 below Solve the transportation problem given

Solution:- Solution by Northwest corner method:

Initial allocation show that the solution is not having (m+n1) allocations. Hence degeneracy occurs.

The smallest load is added to cell XB which does not make loop with other loaded cells.

Shifting of load by drawing loops to cell YA.

The basic feasible solution is having four loaded cells. As the number of columns is 3 and number of rows is 2 the total number of allocations must be 2 + 3 1 = 4. The solution got has four allocations. Hence the basic feasible solution. Now let us give optimality test by MODI method.

Row numbers ui s and column numbers vj s are written in the matrix and opportunity cost of empty cells are evaluated. As the opportunity cost of all empty cells are negative, the solution is optimal. The allocations and the total cost of transportation is:
S.No Loaded Cell Load Cost in Rs.

1. 2. 3. 4.

XA XB YA YC Total cost in Rs.

05 15 15 25

05 2 = 50 15 1 = 15 15 3 = 45 25 1 = 25 135

Problem. 4.7 M/S Epsilon traders purchase a certain type of product from three manufacturing units in different places and sell the same to five market segments. The cost of purchasing and the cost of transport from the traders place to market centers in Rs. per 100 units is given below:
Market Segments. (Transportation cost in Rs.per 100 units). Place of Manufacture. Bangalore (B) Chennai (C) Hyderabad (H) Availability In units x 10000. 10 15 5 Requirement in units 10000 Manufacturing cost in Rs. per unit 40 50 30 1 40 30 50 6 2 30 50 30 6 3 20 70 60 8 4 25 25 55 8 5 35 40 40 4

The trader wants to decide which manufacturer should be asked to supply how many to which market segment so that the total cost of transportation and purchase is minimized. Solution Here availability is 300000 units and the total requirement is 320000 units. Hence a dummy row (D) is to be opened. The following matrix shows the cost of transportation and purchase per unit in Rs. from manufacturer to the market centers directly.
1 B C H D Requirement. 4040 5030 3050 0 6 2 4030 5050 3030 0 6 3 4020 5070 3060 0 8 4 4025 5025 3055 0 8 5 4035 5040 3040 0 4 Availability 10 15 5 2 32

Let us multiply the matrix by 100 to avoid decimal numbers and get the basic feasible solution by VAM. Table.Avail: Availability. Req: Requirement, Roc: Row opportunity cost, Coc: Column opportunity cost.
Tableau. I Cost of transportation and purchase Market segments.

Tableau. II Cost of transportation and purchase Market segments.

Tableau. II Cost of transportation and purchase Market segments.

Tableau. II Cost of transportation and purchase Market segments.

Tableau. II Cost of transportation and purchase Market segments.

Tableau. II Cost of transportation and purchase Market segments.

Tableau. II Cost of transportation and purchase Market segments.

Final Allocation by MODI method.

Allocation: From Bangalore Bangalore Bangalore Chennai Chennai Chennai Hyderabad Total cost in Rs. To 2 3 5 1 4 5 2 Load 10,000 80,000 10,000 60,000 80,000 10,000 50,000 Cost in Rs. 4,03,000 32, 16,000 4, 03,000 30, 18,000 40, 20,000 5, 04,000 15, 15,000 1,30, 79,000

Problem. 4.11. A company has three factories X, Y and Z producing product P and two warehouses to stock the goods and the goods are to be sent to four market centers A, B, C and D when the demand arises. The figure given below shows the cost of transportation from factories to warehouses and from warehouses to the market centers, the capacities of the factories, and the demands of the market centers. Formulate a transportation matrix and solve the problem for minimizing the total transportation cost.

Solution: To formulate a transportation problem for three factories and four market centers, we have to find out the cost coefficients of cells. For this, if we want the cost of the cell XA, the cost of transportation from X to warehouse W1 + Cost transportation from W1 to market center A are calculated and as

our objective is to minimize the cost, the least of the above should be entered as the cost coefficient of cell XA. Similarly, we have to workout the costs and enter in the respective cells. Cell XA: Route X-W1-A and X- W2- A minimum of these two (28 and 18) i.e 18 Cell XB Route X - W1 - B and X - W2 - B Minimum of the two is (29, 17) i.e 17 Cell XC Route X - W1 - C and X- W2 - C Minimum of the two is (27, 11) i.e 11 Cell XD Route X- W1 - D and X- W2 - D Minimum of the two is (34, 22) i.e 22 Similarly we can calculate for other cells and enter in the matrix. The required transportation problem is:
A X Y Z Required. 18 18 18 80 B 17 17 19 100 C 21 21 17 70 D 22 22 24 100 Available 150 100 100 350

Basic Feasible Solution by VAM:

As the opportunity costs of all empty cells are negative, the solution is optimal. The optimal allocation is:
Cell XA XB YB Route X-W2-A X - W2 - B Y- W2 - B Load 50 100 Cost in Rs. 50 18 100 17 --= = = Rs. 900 1700 ---(The answer shows that the capacity of W2 is 250 units and capacity of W1 is100 units).

YD ZA ZC

Y - W2- D Z- W1- A Z - W1 - C

100 30 70

100 22 30 18 70 17 Total Cost in Rs.

= = =

2200 540 1190 6530

(1)
A X Y Z Req. Coc 18 18 18 80 18 B 17 17 19 100 17 C 21 21 17 70 70 15 100 22 350 D 22 22 24 Avail 150 100 100 Roc 0 0 2

(2)
A X Y Z Req. Coc 18 80 18 18 80 0 B 17 17 19 100 0 D 22 22 24 100 0 Avail 150 100 30 280 Roc 1 1 1

(3)
B X Y Z Req. Coc 17 70 17 19 100 0 D 22 22 24 100 0 Avail 70 100 30 200 Roc 5 5 5

(4)
B Y Z Req. Coc 17 30 19 30 2 D Y Z Req. Coc 22 70 24 30 100 100 30 24 100 2 Avail 70 Roc 30 200 5 D 22 Avail 100 Roc 5

Q. An airline that operates seven days a week has the timetable shown below. Crews must have a minimum layover time 5 hours between flights. Obtain the pairing of flights that minimises layover time away from home. For any given pairing, the crew will be based at the city that results in the smaller layover. For each pair also mention the town where crew should be based. Chennai - Bangalore
FlightNo. 101 102 103 104 Departure 7.00 a.m 8.00 a.m 1.00 p.m 6.00 p.m. Arrival 8.00 a.m 9.00 a.m 2.00 p.m 7.00 p.m

Bangalore - Chennai.
Flight No. 201 202 203 204 Departure 8.00 a.m 9.00 a.m 12.00 noon 8.00 p.m Arrival 9.00 a.m 10.00 a.m 1.00 p.m. 9.00 p.m

Let us write two matrices one for layover time of Chennai based crew and other for Bangalore based crew. As explained in the departure of the crew once it reaches the destination, should be found after taking the minimum layover time given, i.e. 5 hours. After words, minimum elements from both the matrices are to be selected to get the matrix showing minimum layover times. Finally, we have to make assignment for minimum layover time. Layover time for Chennai based crew in hours. Tableau I.
FlightNo. 101 102 103 104 201 24 23 20 13 202 25 24 19 14 203 28 27 22 17 203 12 11 6 25

Layover time for Bangalore based crew in hours. Tableau I.

Minimum of the two matrices layover time. The Bangalore based times are marked with a (*). Tableau I.
FlightNo. 101 102 103 104 201 22* 23** 20 9* 202 21* 22* 19 8* 203 18* 19* 22 5* 203 10* 11** 6 21*

The elements with two stars (**) appear in both the matrices. ROCM Tableau I.
FlightNo. 101 102 103 104 201 12 12 14 4 202 11 11 13 3 203 8 8 16 0 203 0 0 0 16

TOCM:
FlightNo. 101 102 103 104 FlightNo. 101 102 103 104 201 8 8 6 0 201 2 2 0 0 202 8 8 10 0 202 2 2 4 0 203 8 8 16 0 203 2 2 10 0 203 0 0 0 16 203 0 0 0 22

FlightNo. 101 102 103 104 FlightNo. 101

201 0 0 0 0 201 0

202 0 0 4 0 202 0

203 0 0 10 0 203 0

203 0 0 2 24 204 0*

102 103 104 Assignment:

0 0 0

0* 4 0

0 10 0*

0 2 24

Leaves as 204 202 201 203

Based at Bangalore Bangalore Chennai Bangalore.

Total layover time: 10 + 22 + 20 + 5 = 67 hours.

Given the set up costs below, show how to sequence the production so as to minimize the total setup cost per cycle.
Jobs A B C D E A M 6 8 12 1 B 2 M 7 4 3 C 5 3 M 6 2 D 7 8 4 M 8 E 1 2 7 5 M

Solution
COCM:
Jobs A B C D E A M 4 4 8 0 B 1 M 3 0 2 C 4 1 M 2 1 D 6 6 0 M 7 E 0 0 3 1 M

TOCM:
Jobs A A M B 1 C 3 D 6 E 0

B C D E

4 4 8 0

M 3 0 2

0 M 1 0x

6 0 M 7

0x 3 1 M

We can draw five lines and make assignment. The assignment is: From A to E and From E to A cycling starts, which is not allowed in salesman problem. Hence what we have to do is to select the next higher element than zero and make assignment with those elements. After assignment of next higher element is over, then come to zero for assignment. If we cannot finish the assignment with that higher element, then select next highest element and finish assigning those elements and come to next lower element and then to zero. Like this we have to finish all assignments. In this problem, the next highest element to zero is 1. Hence first assign all ones and then consider zero for assignment. Now we shall first assign all ones and then come to zero. TOCM:
Jobs A B C D E A M 4 4 8 0 B 1 M 3 0 2 C 3 0 M 1 0x D 6 6 0 M 7 E 0x 0x 3 1 M

The assignment is A to B, B to C, C to D and D to E and E to A. (If we start with the element DC