CHAPTER Five Transiportation Problem

Linear Optimization: Chapter seven 2009E.
CHAPTER FIVE
TRANSPORTATION PROBLEM
Introduction
Transportation problem is special case of linear programming problem in

which its objective is to transport various quantities of a single homogeneous
commodity that are initially stored at various origins (supply) to different
destinations (demand) in minimum transportation cost. it is easy to express
a transportation problem mathematically in terms of a linear programming
model, which can be solved by using either dual simplex or Big M method.
However it is difficult to get the solution using Simplex method because it
involves a large number of variables and constraint, it takes a long time to
solve it. So we are going to solve transportation problem by using
transportation method
Mathematically represent of transportation problem
In order to represent transportation problem mathematically we must know

the amount and location of a variable supplies and the quantities demanded.
In addition we must know the costs that result from transporting one unit of
commodity from various origins to various destinations.
Let
mbe the number of sources (supply).

nbe the number of destinations(demand)
a ibe the supply at the source i .
b jbe the number demand at the destination j.
c ijbe the cost of transportation per unit from source i to destination j.
x ijbe the number of units to be transported from the s source i to destination
j
The linear programming mode representation of transportation problem is
given by
m n
min z=∑ ∑ c ij x ij
i=1 j=1
subject ¿
n
∑ x ij ≤ aij for i=1,2 , ⋯ , m

j=1
By:Mengistu C.(MSc in optimization theory )Page 1

Linear Optimization: Chapter seven 2009E.C
∑ x ij ≥ bij for j=1,2 , ⋯ , n

i=1
x ij ≥ 0 for i∧ j
The objective function minimizes the total cost of transportation between

various sources and destinations
The constraint iin the first set of constraints ensures that the total units
transported from the sourcei is less than or equal to its supply.
The constraint jin the second set of constraints ensures that the total units
transported to the destination j is greater than or equal to its demand.
Schematic diagram of transportation problem
Tabular (matrix) represent of transportation problem
Types of transportation problem
There are two types of transportation problem namely

a. Balanced transportation problem

b. Un balanced transportation problem
Balanced transportation problem: - a transportation problem is said to

be balanced transportation problem if total number of supply is same as
total number of demand.
Unbalanced transportation problem: - a transportation problem is said

to be unbalanced transportation problem if total number of supply is not
same as total number of demand.
Unbalanced transportation problems can be converted into balanced

transportation problem using dummy variables.
 If total demand is greater that total supply we are going to add

Dummy row to our transportation problem to make it balanced
transportation problem
 If total supply is greater that total demand we are going to add
Dummy column to our transportation problem to make it balanced
transportation problem
Standard form of transportation problem
Transportation problem is said to be in standard form if and only if our

transportation problem is balanced transportation problem. i.e.
m n
min z=∑ ∑ c ij x ij
i=1 j=1
subject ¿
n
∑ x ij =a ij for i =1,2, ⋯ ,m
j=1
m
∑ x ij=b ij for j=1,2 , ⋯ , n

i=1
x ij ≥ 0 for i∧ j
Feasibility of transportation problem
Feasible solution: - Any set of non-negative allocation( x ij ≥ 0 )which satisfies

the row and column sum (rim requirement) is called a feasible solution.
Basic feasible solution:- a feasible solution is called a basic feasible

solution if the number of non negative allocation is equal tom+n−1 here m is
the number of rows and n is the number of columns in a transportation table.

Non-degenerate basic feasible solution: - Any feasible solution to a

transportation problem containing morigin andn destination is said to be non-
degenerate if it contains m+n−1occupied cells and each allocation is in
independent positions. The allocation are said to be in independent position
if it is impossible to form a closed path. Closed path means by allowing
horizontal and vertical lines and all the corner cells are occupied.
Degenerate basic feasible solution: - if a basic feasible solution contains

less that m+n−1non negative allocations it is said to be degenerate.
Optimal solution: - a feasible solution (not necessary basic) is said to be

optimal if it minimizes (maximizes) the transportation cost (profit).
Occupied cell: - cells in transportation table having positive allocation will

be called occupied cells, otherwise they are non-occupied cells.
Solution of the transportation problem
A transportation problem can be solved by two methods, using

a) Simplex Method and
b) Transportation Method.
Since it is difficult to get solution of transportation problem by using Simplex
method In this chapter we are going to see only transportation Method.
Transportation Method
The transportation problem is solved in two phases
 Phase I -- Finding an initial basic feasible solution
 Phase II – Iterating to the optimal solution(Modified distribution
method or Stepping-Stone Method)
The solution algorithm to transportation problem may be summarized in to
the following steps
Initial feasible solution
Phase one: - Finding an initial feasible solution
Step 1:- Formulation the problem and setup in the matrix form
The formulation of the transportation problem is similar to the linear

programming problem formulation. Here the objective function is the
total transportation cost and the constraints are supply and
demand available at each source and destination respectively
Step 2:- Obtain an initial basic feasible solution

Obtain an initial basic feasible solution by any of the following three methods
I. North-west corner method
II. Least cost method
III. Vogel’s approximation (or penalty) method
North-west corner method (NWCM)
The North West corner rule is a method for computing an initial basic
feasible solution of a transportation problem where the basic variables are
selected from the North –West corner
Steps
1. Select the north west (upper left-hand) corner cell of the

transportation table and allocate as many units as possible equal to
the minimum between available supply and demand requirements,
i.e., min (s1, d1).
2. Adjust the supply and demand numbers in the respective rows and
columns allocation.
3. If the supply for the first row is exhausted then move down to the
first cell in the second row.
4. If the demand for the first cell is satisfied then move horizontally to
the next cell in the second column.
5. If for any cell supply equals demand then the next allocation can be
made in cell either in the next row or column.
6. Continue the procedure until the total available quantity is fully

allocated to the cells as required.
Least cost method (LCM)
Matrix minimum method is a method for computing a basic feasible solution

of a transportation problem where the basic variables are chosen according
to the unit cost of transportation
Steps
1. Identify the box having minimum unit transportation cost( c ij ).

2. If there are two or more minimum costs, select the row and the
column corresponding to the lower numbered row.
3. If they appear in the same row, select the lower numbered column.
4. Choose the value of the corresponding x ij as much as possible subject
to the capacity and requirement constraints.
5. If demand is satisfied, delete that column.
6. If supply is exhausted, delete that row.
7. Repeat steps 1-6 until all restrictions are satisfied
Vogel’s approximation method (VAM)
The Vogel approximation method is an iterative procedure for computing a

basic feasible
Steps
1. Identify the boxes having minimum and next to minimum

transportation cost in each row and write the difference (penalty)
along the side of the table against the corresponding row.
2. Identify the boxes having minimum and next to minimum

transportation cost in each column and write the difference (penalty)
against the corresponding column solution of the transportation
problem.
3. Identify the maximum penalty. If it is along the side of the table,

make maximum allotment to the box having minimum cost of
transportation in that row. If it is below the table, make maximum
allotment to the box having minimum cost of transportation in that
column.
4. If the penalties corresponding to two or more rows or columns are

equal, select the top most row and the extreme left column
The initial solution obtain by any of the above methods must satisfy the
following condition
 The solution must be feasible. I.e. it must satisfy all the supply and
demand constrains (also called rim condition).
 The number of positive allocation must be equal to m+n−1 when m
is the number of rows and nis the number of columns.

Any solution that satisfies the above condition is called non-degenerate basic
feasible solution, otherwise degenerate basic feasible solution.
Phase two: - iterating to the optimal solution
Modified distribution method (MODI)
Step one: - For any initial basic feasible solution with m+n−1occupied cells
calculate ui∧v j for rows and columns by using the following formula
c ij =ui + v j
Step two: - For unoccupied cells calculate opportunity cost by using the
relationship
d ij =c ij −( ui + v j ) for all i∧ j
Step three: - Examine sign of each d ij
i. If d ij >0 then current basic feasible solution is optimal and it is

unique
ii. If d ij =0 then current basic feasible solution will remain unaffected
but an alternative solution exists.
iii. If one or more d ij <0then an improved solution can be obtained by
entering unoccupied cell ( i , j )in the basis an unoccupied cell having
largest negative value of d ij is chosen for entering in to the solution
mix (new transportation schedule)
Step four: - Construct a close path (or loop) for the unoccupied cell with
largest negative opportunity cost. Start the closed path with the selected
unoccupied cell and mark a plus sign ¿in the cell, trace a path rows (or
columns) ¿and continue down the column (or row) to an occupied cell and
mark the corner with plus sign¿ and minus sign ¿alternatively. Close the path
back to the selected unoccupied cell.
Step five: - Select the smallest quantity among the cell marked with minus
sign on the corners of closed loop. Allocate this value to the selected
unoccupied cell and add it in to other occupied cell marked with plus sign
and subtract it from the occupied cell marked with minus signs.
Step six: - Obtained a new improved solution by allocating unites to the

unoccupied cell according to step five and calculate the new total
transportation cost.

Step seven: - Test the revised solution further for optimality. the procedure
terminates when all d ij ≥ 0 for unoccupied cells.
Stepping-Stone Method
Step one: - Select any unused square (unoccupied cell) to evaluate.
Step two: - Begin at this square (the selected occupied cell). Trace a
closed path back to the original square (the selected unoccupied cell) via
squares that are currently being used (only horizontal or vertical moves
allowed).
Step three: - Beginning with a plus (+) sign at the unused square, place
alternate minus (-) signs and plus signs on each corner square of the closed
path just traced.
Step four: - Calculate an improvement index by adding together the unit

cost figures found in each square containing a plus sign and then subtracting
the unit costs in each square containing a minus sign.
Step five: - Repeat steps 1 to 4 until an improvement index has been

calculated for all unused squares.
Step six: - If all indices computed are greater than or equal to zero, an
optimal solution has been reached.
Step seven: - If not, it is possible to improve the current solution and

decrease total shipping costs.
The cell with the best negative improvement index is selected. This cell will
be filled with as many units as possible.
All empty cells are now evaluated again. If any cell has a negative index,
the process continues and a new solution is found.

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Linear Optimization: Chapter seven 2009E.

Transportation problem is special case of linear programming problem in

Mathematically represent of transportation problem

In order to represent transportation problem mathematically we must know

mbe the number of sources (supply).

∑ x ij ≤ aij for i=1,2 , ⋯ , m

By:Mengistu C.(MSc in optimization theory )Page 1

∑ x ij ≥ bij for j=1,2 , ⋯ , n

The objective function minimizes the total cost of transportation between

Schematic diagram of transportation problem

Tabular (matrix) represent of transportation problem

Types of transportation problem

There are two types of transportation problem namely

By:Mengistu C.(MSc in optimization theory )Page 2

a. Balanced transportation problem

Balanced transportation problem: - a transportation problem is said to

Unbalanced transportation problem: - a transportation problem is said

Unbalanced transportation problems can be converted into balanced

 If total demand is greater that total supply we are going to add

Standard form of transportation problem

Transportation problem is said to be in standard form if and only if our

∑ x ij=b ij for j=1,2 , ⋯ , n

Feasible solution: - Any set of non-negative allocation( x ij ≥ 0 )which satisfies

Basic feasible solution:- a feasible solution is called a basic feasible

By:Mengistu C.(MSc in optimization theory )Page 3

Non-degenerate basic feasible solution: - Any feasible solution to a

Degenerate basic feasible solution: - if a basic feasible solution contains

Optimal solution: - a feasible solution (not necessary basic) is said to be

Occupied cell: - cells in transportation table having positive allocation will

Solution of the transportation problem

A transportation problem can be solved by two methods, using

Initial feasible solution

Phase one: - Finding an initial feasible solution

The formulation of the transportation problem is similar to the linear

Step 2:- Obtain an initial basic feasible solution

By:Mengistu C.(MSc in optimization theory )Page 4

I. North-west corner method

II. Least cost method

III. Vogel’s approximation (or penalty) method

North-west corner method (NWCM)

1. Select the north west (upper left-hand) corner cell of the

6. Continue the procedure until the total available quantity is fully

Least cost method (LCM)

Matrix minimum method is a method for computing a basic feasible solution

1. Identify the box having minimum unit transportation cost( c ij ).

By:Mengistu C.(MSc in optimization theory )Page 5

Vogel’s approximation method (VAM)

The Vogel approximation method is an iterative procedure for computing a

1. Identify the boxes having minimum and next to minimum

2. Identify the boxes having minimum and next to minimum

3. Identify the maximum penalty. If it is along the side of the table,

4. If the penalties corresponding to two or more rows or columns are

By:Mengistu C.(MSc in optimization theory )Page 6

Phase two: - iterating to the optimal solution

Modified distribution method (MODI)

Step three: - Examine sign of each d ij

i. If d ij >0 then current basic feasible solution is optimal and it is

Step six: - Obtained a new improved solution by allocating unites to the

By:Mengistu C.(MSc in optimization theory )Page 7