Transportation,

Transshipment, and
Assignment Problems

Chapter 6

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Chapter Topics

■ The Transportation Model

■ The Transshipment Model
■ The Assignment Model
■ Solution of the transportation Problem
■ Solution of the Assignment Problem ( Section)

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The Transportation Model: Characteristics

■ Part of a class of LP problems known as network flow models.

■ A product is transported from a number of sources to a number of
destinations at the minimum possible cost.
■ Each source is able to supply a fixed number of units of the
product, and each destination has a fixed demand for the
product.

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The Transportation Model: Characteristics

■ The linear programming model has constraints for supply at each

source and demand at each destination.
■ All constraints are equalities in a balanced transportation model
where supply equals demand.
■ Constraints contain inequalities in unbalanced models where supply
does not equal demand.
■ The objective of the model is to determine the unknowns 𝑥𝑖𝑗 that
will minimize the total transportation cost while satisfying all the
supply and demand restrictions

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Transportation Model Example
Problem Definition and Data
How many tons of wheat to transport from each grain
elevator to each mill on a monthly basis in order to
minimize the total cost of transportation?
Grain Elevator Supply Mill Demand
1. Kansas City 150 A. Chicago 220
2. Omaha 175 B. St. Louis 100
3. Des Moines 275 C. Cincinnati 300
Total 600 tons Total 600 tons

Transport Cost from Grain Elevator to Mill ($/ton)

Grain Elevator A. Chicago B. St. Louis C. Cincinnati
1. Kansas City $6 $8 $ 10
2. Omaha 7 11 11
3. Des Moines 4 5 12

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Transportation Model Example
Transportation Network Routes

Figure 6.1 Network of transportation routes for wheat shipments

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Transportation Model Example
Model Formulation
Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C +
4x3A + 5x3B + 12x3C
subject to:
x1A + x1B + x1C = 150
x2A + x2B + x2C = 175
x3A + x3B + x3C = 275
x1A + x2A + x3A = 200
x1B + x2B + x3B = 100
x1C + x2C + x3C = 300
xij  0
xij = tons of wheat from each grain elevator, i, i = 1, 2, 3,
to each mill j, j = A,B,C

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The Transshipment Model
Characteristics
■ Extension of the transportation model.
■ Intermediate transshipment points are added between the sources
and destinations.
■ Items may be transported from:
 Sources through transshipment points to destinations
 One source to another
 One transshipment point to another
S1 T1
 One destination to another D1
 Directly from sources to destinations S2 T2
 Some combination of these

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Transshipment Model Example
Problem Definition and Data
Extension of the transportation model in which
intermediate transshipment points are added between
sources and destinations.
Shipping Costs

Grain Elevator
Farm 3. Kansas City 4. Omaha 5. Des Moines
1. Nebraska $16 10 12
2. Colorado 15 14 17

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Transshipment Model Example
Transshipment Network Routes

Figure 6.3 Network of transshipment routes

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Transshipment Model Example
Model Formulation
Minimize Z = $16x13 + 10x14 + 12x15 + 15x23 + 14x24
+ 17x25 + 6x36 + 8x37 + 10x38 + 7x46 + 11x47
+ 11x48 + 4x56 + 5x57 + 12x58
subject to:
x13 + x14 + x15 = 300 Supply constraints for farms
x23 + x24 + x25 = 300 in Nebraska and Colorado
x36 + x46 + x56 = 200
x37 + x47 + x57 = 100 Demand constraints at
x38 + x48 + x58 = 300 the Chicago, St. Louis
x13 + x23 - x36 - x37 - x38 = 0 and Cincinnati mills
x14 + x24 - x46 - x47 - x48 = 0
x15 + x25 - x56 - x57 - x58 = 0
xij  0
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The Assignment Model
Characteristics
■ Special form of linear programming model similar to the
transportation model.
■ The assignment problem arises in a variety of decision-
making situations; typical assignment problems involve
assigning jobs to machines, agents to tasks, sales personnel
to sales territories, contracts to bidders, and so on.
■ The main feature of the assignment problem is that one
agent is assigned to one and only one task.
■ Supply at each source and demand at each destination
limited to one unit.

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The Assignment Model
Characteristics
■ In a balanced model supply equals demand.
■ In an unbalanced model supply does not equal demand.
■ In the assignment problem we have set of objectives, such
as minimize cost, minimize time, or minimize distance.

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Assignment Model Example
Problem Definition and Data
Problem: Assign four teams of officials to four games in
a way that will minimize total distance traveled by the
officials. Supply is always one team of officials, demand is
for only one team of officials at each game.

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Assignment Model Example
Model Formulation
Minimize Z = 210xAR + 90xAA + 180xAD + 160xAC + 100xBR +70xBA
+ 130xBD + 200xBC + 175xCR + 105xCA +140xCD
+ 170xCC + 80xDR + 65xDA + 105xDD + 120xDC
subject to:
xAR + xAA + xAD + xAC = 1 xij  0
xBR + xBA + xBD + xBC = 1
xCR + xCA + xCD + xCC = 1
xDR + xDA + xDD + xDC = 1
xAR + xBR + xCR + xDR = 1
xAA + xBA + xCA + xDA = 1
xAD + xBD + xCD + xDD = 1
xAC + xBC + xCC + xDC = 1

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Transportation Model
Solution Methods

Get an Initial Feasible Solution

 Northwest corner method

 Minimum cell cost method
 Vogel’s approximation

Methods of improving solution

 stepping-stone method
 modified distribution method (MODM)

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The Northwest Corner Method

 In the northwest corner method the largest possible

allocation is made to the cell in the upper left-hand corner
of the tableau, followed by allocations to adjacent feasible
cells.
 Recall wheat transportation model

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Initial solution after applying North west method

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Initial solution after applying North west method

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Method Summary

The steps of the northwest corner method are summarized

here:
1. Allocate as much as possible to the cell in the upper left-
hand corner, subject to the supply and demand
constraints.
2. Allocate as much as possible to the next adjacent
feasible cell.
3. Repeat step 2 until all requirements have been met

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The Minimum Cell Cost Method

 With the minimum cell cost method, the basic logic is to

allocate to the cells with the lowest costs.
 The initial allocation is made to the cell in the tableau
having the lowest cost.
 Recall wheat transportation model

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The Minimum Cell Cost Method

 The total cost of this initial solution is $4,550, as

compared with a total cost of $5,925 for the initial
northwest corner solution.

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Summary of the method

 The specific steps of the minimum cell cost

method are summarized next:
1. Allocate as much as possible to the feasible cell
with the minimum transportation cost, and
adjust the rim requirements.
2. Repeat step 1 until all rim requirements have
been met

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Vogel’s Approximation Model

 Vogel’s approximation model (also called VAM), is

based on the concept of penalty cost or regret.
 If a decision maker incorrectly chooses from several
alternative courses of action, a penalty may be
suffered (and the decision maker may regret the
decision that was made).
 In a transportation problem, the courses of action
are the alternative routes, and a wrong decision is
allocating to a cell that does not contain the lowest
cost.
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Vogel’s Approximation Model

1. In the VAM method, the first step is to develop a

penalty cost for each source and destination.

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Vogel’s Approximation Model

2. VAM allocates as much as possible to the minimum cost

cell in the row or column with the largest penalty cost.

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Vogel’s Approximation Model

3. After each VAM cell allocation, all row and

column penalty costs are recomputed.

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Vogel’s Approximation Model

4. repeat the previous step and allocate to the row or

column with the highest penalty cost.

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Vogel’s Approximation Model

The total cost of this initial Vogel’s approximation

model solution is $5,125, which is not as high as the
northwest corner initial solution of $5,925. It is also
not as low as the minimum cell cost solution of
$4,550.

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Vogel’s Approximation Model Summary

1. Determine the penalty cost for each row and

column by subtracting the lowest cell cost in the
row or column from the next lowest cell cost in the
same row or column.
2. Select the row or column with the highest penalty
cost
3. Allocate as much as possible to the feasible cell
with the lowest transportation cost in the row or
column with the highest penalty cost.
4. Repeat steps 1, 2, and 3 until all rim requirements
have been met 6-30
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Stepping Stone Method

Once an initial basic feasible solution has been

determined by any of the previous three methods,
the next step is to solve the model for the optimal
(i.e., minimum total cost) solution.
There are two basic solution methods:
1. the stepping-stone solution method

2. the modified distribution method (MODI).

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Stepping Stone Method

 Because the initial solution obtained by the minimum cell cost

method had the lowest total cost of the three initial solutions, we will
use it as the starting solution.
 First, we always start with an empty cell and form a closed path of
cells that now have allocations
 Evaluating empty cells to see whether the use of any of them would
reduce total cost. If we find such a route, then we will allocate as
much as possible to it.

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Stepping Stone Method

 four empty cells (1A, 2A, 2B, and 3C) are found,
representing unused routes.
 First, let us consider allocating one ton of wheat to cell
1A. If one ton is allocated to cell 1A, cost will be
increased by $6.
 If we add one ton to cell 1A, we must subtract one ton
from another allocation along that row. Cell 1B is a logical
candidate because it contains 25 tons. By subtracting one
ton from cell 1B, we now have 150 tons in row 1, and we
have satisfied the supply constraint again. At the same
time, subtracting one ton from cell 1B has reduced total
cost by $8.
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Stepping Stone Method

 for each ton allocated to cell 1A (a route not at present

used), total cost will be reduced by $1. This indicates that
the initial solution is not optimal because a lower cost can
be achieved by allocating additional tons of wheat to cell
1A

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Stepping Stone Method

 We always start with an empty cell and form a closed path

of cells that now have allocations.
 In developing the path, it is possible to skip over both
unused and used cells. In any row or column there can be
only one addition and one subtraction.
 Let us test cell 2A to see if it results in a cost reduction.

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Stepping Stone Method

 Let us test the remaining two empty cells 2B and 3C to

see if it results in a cost reduction.

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Stepping Stone Method

 Notice that after all four unused routes are evaluated, there is a tie
for the entering variable between cells 1A and 2A. Both show a
reduction in cost of $1 per ton allocated to that route.

 We will select cell 1A (i.e., ) to enter the solution.

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Stepping Stone Method

Because the total cost of the model will be reduced by $1 for

each ton we can reallocate to cell 1A, we naturally want to
reallocate as much as possible.

we are limited by the 25 tons in cell 1B. In other words, if we

allocate more than 25 tons to cell 1A, then we must subtract
more than 25 tons from 1B, which is impossible because
only 25 tons are available. Therefore, 25 tons is the amount
we reallocate to cell 1A according to our path. That is, 25
tons are added to 1A, subtracted from 1B, added to 3B, and
subtracted from 3A.

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Stepping Stone Method

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Stepping Stone Method (Second Iteration)

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Stepping Stone Method (Second Iteration)

 Our evaluation of the four paths indicates no cost

reductions; therefore, the solution shown in Table
below is optimal.

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  This situation indicates that the problem has multiple
optimal solutions. Thus, could be entered into the
solution and there would not be a change in the total
minimum cost of $4,525. To identify the alternative
solution, we would allocate as much as possible to cell
2A, which in this case is 25 tons of wheat. The
alternative solution is shown in Table

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 Summary of the Stepping-stone method

1. Determine the stepping-stone paths and cost

changes for each empty cell in the tableau.
2. Allocate as much as possible to the empty cell
with the greatest net decrease in cost.
3. Repeat steps 1 and 2 until all empty cells have
positive cost changes that indicate an optimal
solution.

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 Detailed Summary of stepping stone method

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 Solution of the Assignment Model

The conference office wants to assign four teams of officials to

the four games in a way that will minimize the total distance
traveled by the officials. The distances in miles for each team of
officials to each game location are shown in Table

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  The first step in the assignment method of solution is
to develop an opportunity cost table.
 We accomplish this by first subtracting the minimum
value in each row from every value in the row. These
computations are referred to as row reductions, The
row reductions for this example are shown in Table

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  Next, the minimum value in each column is subtracted
from all column values. These computations are called
column reductions and are shown in Table

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  A test to determine whether four unique assignments
exist in the previous Table is to draw the minimum
number of horizontal or vertical lines necessary to
cross out all zeros through the rows and columns
of the table.
 The three lines indicate that there are only three unique
assignments, whereas four are required for an optimal
solution.

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  Next, subtract the minimum value that is not crossed
out from all values not crossed out. Then, add this
minimum value to those cells where two lines intersect.
 The second iteration for this model with the
appropriate changes is shown in Table

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  These two assignments represent multiple optimal
solutions for our example problem. Both assignments
will result in the officials traveling a minimum total
distance of 450 miles.

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 Summary of the method
 The steps of the assignment solution method are summarized here:
1. Perform row reductions by subtracting the minimum value in each row from
all row values.
2. Perform column reductions by subtracting the minimum value in each column
from all column values.
3. In the completed opportunity cost table, cross out all zeros, using the
minimum number of horizontal or vertical lines.
4. If fewer than m lines are required (where the number of rows or columns),
subtract the minimum uncrossed value from all uncrossed values, and add this
same minimum value to all cells where two lines intersect. Leave all other
values unchanged, and repeat step 3.
5. If m lines are required, the tableau contains the optimal solution and m unique
assignments can be made. If fewer than m lines are required, repeat step 4

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 ?

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