Transportation Model and Its

Variants
CH # 5
 Network Flow Models
Consist of a network that can be represented with
nodes and arcs
1. Transportation Model (CH # 5)
2. Transshipment Model (CH # 5)
3. Assignment Model (CH # 5)
4. Minimal Spanning Tree Model (CH # 6)
5. Shortest Path Model (CH # 6)
6. Maximal Flow Model (CH # 6)
7. CPM and PERT (CH # 6)
 Characteristics of Network Models
• A node is a specific location
• An arc connects 2 nodes
• Arcs can be 1-way or 2-way
 Types of Nodes
• Origin nodes
• Destination nodes
• Transshipment nodes

Decision Variables
XAB = amount of flow (or shipment) from
node A to node B
 Transportation Model and Its Variants
Definition of the transportation model
The transportation model is a special class of the LP
problem. It deals with the situation in which a commodity
is shipped from source (e.g. factories) to destinations
(e.g. warehouses). The objective is to determine the
amounts shipped from each source to each destination
that minimize the total shipping cost while satisfying
both the supply limits and the demand requirements.

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Example 1:

There are three plants A, B, C and two destinations 1and 2, the

distance between them is as follows

The mile costs 8 cents find the cost/unit round to $

We define
X11 as the amount shipped from A to 1
X12 as the amount shipped from A to 2
X21 as the amount shipped from B to 1
X22 as the amount shipped from B to 2
X31 as the amount shipped from C to 1
X32 as the amount shipped from C to 2
The plants A, B, and C produces 1000, 1500, and1200 cars respectively.
The destination 1&2 demands are 2300 and 1400 cars.
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 The LP model is
Minimize Z=80 X11+215 X12 +100 X21 +108 X22 +102 X31 +68 X32
S.T X11 + X12 = 1000 ……….…… (A)
X21 + X22 = 1500 ……………. (B)
X31 + X32 = 1200 ……………. (C)
X11 + X21+ X31 = 2300 ……………. (1)
X12 + X22+ X32 = 1400 …………..... (2)
Xij >=0 i=1, 2, 3 j=1, 2
These constraints are all equations because the total supply from the three
plants = 1000 + 1500 + 1200 = 3700 cars, equals the total demands at the two
destinations = 2300 + 1400 = 3700 cars.
The LP model can be solved by the simplex method. However, the special
structure of the constraints allows us to solve the problem more conveniently
using the transportation tableau.

When the total supply does not equal the total demand, the
transportation model is said to be unbalanced. We must add a
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dummy source or destination.
 Unbalanced Transportation Model
• If (Total Supply) > (Total Demand), then for
each supply node:
(outflow) < (supply)

• If (Total Supply) < (Total Demand), then for

each demand node:
(inflow) < (demand)
Example 2:
In example (1) suppose that plant B
capacity is 1300 cars (instead of 1500). The
total supply =3500cars and the total demand
= 3700cars. So the total supply < the total
demand. Therefore, we have to add dummy
source with capacity 200 cars.

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Example 3:
In example (1) suppose that the demand of
the destination 1 is 1900 cars (instead of 2300). The
total supply =3700cars and the total
demand = 3300cars. So the total supply > the total
demand. Therefore, we have to add dummy
destination with 400 cars.

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 The Transportation Model Question
Decision: How much to ship from each
origin to each destination?

Objective: Minimize shipping cost

 Data

Decision Variables
Xij = number of desks shipped from factory i to
warehouse j
Objective Function: (in $ of transportation cost)
(Min) Z = 5XDA + 4XDB + 3XDC + 8XEA + 4XEB + 3XEC +9XFA+7XFB+ 5XFC
Subject to the constraints:
XDA + XDB + XDC = 100 (Des Moines)
XEA + XEB + XEC = 300 (Evansville)
XFA + XFB + XFC = 300 (Fort Lauderdale)
XDA + XEA + XFA = 300 (Albuquerque)
XDB + XEB + XFB = 200 (Boston)
XDC + XEC + XFC = 200 (Cleveland)
The Transportation Algorithm

Step (1): Determine an Initial Basic Feasible Solution (IBFS) by

using one of the following methods.

1.The North-West Corner Method OR,

2.The Least-Cost Method OR,
3.Vogel Approximation Method.

Step (2): Improve the IBFS

•Determine an entering variable.

•Determine a leaving variable.
•Obtain a new BFS
•If the solution is optimal stop. Otherwise; repeat step (2).

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Steps of North-West Method

1. Allocate as much as possible to a selected

cell X11

2. Cross out the row or column with zero

supply or demand (if both are satisfied at
the same time, only one should be crossed
out).

3. If exactly one row or column is left

uncrossed out stop. Otherwise go to
step(1)

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Steps of Least-Cost Method

1. Assign as much as possible to the variable with

the smallest unit cost cell.

2. Cross out the row or column with zero supply of

demand (if both are satisfied at the same time,
only one should be crossed out).

3. If exactly one row or column is left uncrossed

out stop. Otherwise go to step(1)

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The Vogel Approximation Method:
This method provides a better starting solution (optimal or
closed to the optimal solution)
Steps of Vogel Approximation Method
1. In each row and column, subtract the lowest two costs from
each other.
2. Determine the row or column with the largest difference.
3. Allocate as much as possible to the variable with the least
cost in the selected row or column. Any row or column with
zero supply or demand would not be used in computing the
following step.
4. If exactly one row or column remains uncrossed out stop.
Otherwise, go to step (1).
5. If only one row or column with positive supply or demand
remains uncrossed out determine the basic variable by the
least-cost method.
6. If all uncrossed out rows and columns have assigned zero
supply and demand, determine the zero basic variable by
the least-cost method.
Note: In all the three methods, if you have a tie you can break
the tie arbitrarily.
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 Iterative Computations of the Transportation
Algorithm

After determining the starting solution (using any of the three methods)
we use the following algorithm to determine the optimum solution.
Step 1.
Use the simplex optimality condition to determine the entering variable
as the current nonbasic variable that can improve the solution. If the
optimality condition is satisfied, stop. Otherwise, go to step 2.
Step 2.
Determine the leaving variable using the simplex feasibility condition.
Change the basis, and return to step 1.

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• The selection of X31 as the entering variable means that we want to
ship through this route because it reduces the total shipping cost.
• The maximum value of Ө is determined based on two conditions.
1. Supply limits and demand requirements remain satisfied.
2. Shipments through all routes remain nonnegative.
• It Determines the maximum value of Ө and the leaving variable
• A constructed closed loop that starts and ends at the entering
variable cell, The loop consists of connected horizontal and vertical
segments only (no diagonals are allowed). Except for the entering
variable cell, each corner of the closed loop must coincide with a
basic variable.
Basic X11 X12 X13 X14 X21 X22 X23 X24 X31 X32 X33 X34
Z-Row 0 0 -16 4 3 0 0 0 9 -9 -9 0

Ui 0 0 0 0 5 5 5 5 3 3 3 3
Vi 10 2 4 15 10 2 4 15 10 2 4 15
Cij 10 2 20 11 12 7 9 20 4 14 16 18