Prof. Dr.-Ing.

Bernd Noche
MSc. Eng. Fathi Rhoma

Intermodal Transport
Transportation Problems

Fakultät für Ingenieurwissenschaften Telefon: 0203 379-2785

Abteilung Maschinenbau Telefax: 0203 379-3048
Transportsysteme und -logistik E-Mail: [email protected]
Lotharstraße 1 - 21
47057 Duisburg
 Transportation Problem

Outline
• Transportation Modeling

• Developing an Initial Solution

– The Northwest-Corner Rule

• The Stepping-Stone Method

• MODI Method

• Special Issues in Modeling

– Demand Not Equal to Supply

– Degeneracy
 Transportation Problem

• Transportation problems determine how much of the demand at each one of

several destinations is supplied by each one of several sources

• The goal is to minimize costs

• Terminology:

– Points of demand:

• The destination that products are shipped to

– Points of supply:

• Where products are shipped from

Sources Destinations
City 1
X11
Plant X21
X12
1

X22
Plant 2 City 2
 Transportation Problem

there is a simpler form of tabulation to demonstrate this problem: the Transport

Table :

Destinations Each cell is a route

1 2
10 8
20 Initial Trial
1 20
Sources 9 12 Unit rates shown boxed
2 10 40 50 in corner of each cell

30 TC= 770 40 Supply capacity of

1 2 Source
10 8 Final
1 20 20 Demand requirement
Sources 9 12
of Destination

2 30 20 50
So for an even harder
30 TC= 670 40 problem . . .
 Transportation Problem

Transportation Problem

• How much should be shipped from several

sources to several destinations
– Sources: Factories, warehouses, etc.
– Destinations: Warehouses, stores, etc.

• Transportation models
– Find lowest cost shipping arrangement
– Used primarily for existing distribution systems
 Transportation Problem

A Transportation Model Requires

• The origin points, and the capacity or supply per period at

each.

• The destination points and the demand per period at

each.

• The cost of shipping one unit from each origin to each

destination
 Transportation Problem

Learning Objectives
• Define the problem & prepare the transportation tableau

• Obtain an initial feasible solution

• Identify the optimal solution

• Understand special situations

 Transportation Problem

LP Notation
M N
Minimize z = ∑∑ cij xij
i =1 j =1

subject to :
M

∑x
i =1
ij ≤ Si for every source, i = 1,...M
N

∑x
j =1
ij = Dj for every destinatio n j = 1,...N

where :
xij = the number of units transporte d to destinatio n j from source i
cij = the cost of transporti ng one unit from source i to destinatio n j
 Transportation Problem

Transportation formulation
From To
City 1 City 2 City 3 City 4 Supply (M kwh)

Plant 1 $8 $6 $10 $9 35
Plant 2 $9 $12 $13 $7 50
Plant 3 $14 $9 $16 $5 40
Demand (M kwh) 45 20 30 30

City 1
X11
X21
Plant 1 X12
X14 X13 X31 City 2
X22
Plant 2 X23 X32
X24
X33 City 3
Plant 3
X34

City 4
 Transportation Problem

Transportation formulation

Decision Variable

We have to determine how much electricity is sent from each plant

to each city

Xij = Amount of electricity produced at plant i and sent to city j

X14 = Amount of electricity produced at plant 1 and sent to city 4

Objective function

Minimize Z = 8X11+6X12+10X13+9X14
+9X21+12X22+13X23+7X24
+14X31+9X32+16X33+5X34
 Transportation Problem

Formulation (Supply, Demand and Sign Constraints)

Each supply point has a limited production capacity

X11+X12+X13+X14 <= 35
X21+X22+X23+X24 <= 50
X31+X32+X33+X34 <= 40
Each destination point has a limited demand capacity
X11+X21+X31 >= 45
X12+X22+X32 >= 20
X13+X23+X33 >= 30
X14+X24+X34 >= 30

Sign Constraints
A negative amount of electricity can not be shipped all Xij’s must be
non negative
Xij >= 0 (i= 1,2,3; j= 1,2,3,4)
 Transportation Problem

Formulation - LP

Min Z = 8X11+6X12+10X13+9X14+9X21+12X22+13X23+7X24
+14X31+9X32+16X33+5X34

X11+X12+X13+X14 <= 35 (Supply Constraints)

X21+X22+X23+X24 <= 50
X31+X32+X33+X34 <= 40

X11+X21+X31 >= 45 (Demand Constraints)

X12+X22+X32 >= 20
X13+X23+X33 >= 30
X14+X24+X34 >= 30

Xij >= 0 (i= 1,2,3; j= 1,2,3,4)

 Transportation Problem

Preparing the Problem

• To use the stepping stone method, supply must equal

demand.

– If not, create a dummy source or destination to make up the difference.

– In the solution, shipments from the dummy source represent unmet

demand & deliveries to a dummy destination represent excess supply

capacity.
 Transportation Problem

Required Information
• Demand values for each destination (blue)

• Capacity level at each source (green)

• Cost of delivering 1 unit to each destination from each source (yellow)

Plant Destinations Sources

A 2 4 1 3 300
B 8 2 6 5 300
C 6 1 4 2 200

Demand 200 200 300 100

 Transportation Problem

Initial Solutions
• Common heuristics (rules of thumb):

– Select a cell & allocate as large a shipment as possible without violating capacity

or demand constraints (this eliminates a row or column constraint)

– Continue selecting new cells until all row & column constraints are satisfied

• Examples:

– Northwest Corner Method (NWC) - initial solution

– MODI Algorithm

– Vogel’s Approximation Method (VAM)

– Others
 Transportation Problem

Northwest Corner Method

• Begin in the upper left-hand corner of the tableau (the NW corner)

• Assign the largest shipment possible

– If the column constraint is satisfied, move to the column on the right

– If the row constraint is satisfied, move to the row below

• Continue until all row & column constraints are satisfied

 Transportation Problem

Northwest Corner Method

 Transportation Problem

NWC Example: Step 1

Plant Destinations Sources

200

Column Satisfied
A 2 4 1 3 300

B 8 2 6 5 300

C 6 1 4 2 200

Demand 200 200 300 100

 Transportation Problem

NWC Example: Step 2

Plant Destinations Sources

200 100 300 – 200 =

A 2 4 1Row Satisfied
3 100

B 8 2 6 5 300

C 6 1 4 2 200

Demand 200 200 300 100

 Transportation Problem

NWC Example: Step 3

Plant Destinations Sources

200 100
A 2 4 1 3 300

Column Satisfied
B 8 100 2 6 5 300

C 6 1 4 2 200

200 – 100
Demand 200 = 100 300 100
 Transportation Problem

NWC Example: Step 4

Plant Destinations Sources

200 100
A 2 4 1 3 300

100 200
6Row Satisfied 300 – 100 =
B 8 2 5
200

C 6 1 4 2 200

Demand 200 200 300 100

 Transportation Problem

NWC Example: Step 5

Plant Destinations Sources

200 100

Column Satisfied
A 2 4 1 3 300

100 2 200
B 8 6 5 300

100
C 6 1 4 2 200

300 – 200
Demand 200 200 100
= 100
 Transportation Problem

NWC Example: Step 6

Plant Destinations Sources

200 100
A 2 4 1 3 300

100 2 200
B 8 6 5 300

100 100 200 –100 =

C 6 1 4 2
100

Demand 200 200 300 100

 Transportation Problem

NWC Initial Solution

Plant Destinations Sources

200 100
A 2 4 1 3 300

100 2 200
B 8 6 5 300

100 100
C 6 1 4 2 200

Demand 200 200 300 100

 Transportation Problem

Limitations

• NW Corner Method ignores the objective function coefficients

(costs)

• Solution often isn’t very good:

Total cost:

200 units ($2) + 100 units ($4) + 100 units ($2) + 200 units ($6) + 100 units ($4) +

100 units ($2) =

$2800 to transport the 800 units

 Transportation Problem

Transportation Problem Example

Cleveland
(200 units required)
DesMoines
(100 unit capacity)

Boston
(200 units required)
Albuquerque
(300 units required)
Evansville
(300 units
capacity)

Fort Lauderdale
(300 units capacity)
 Transportation Problem

Unit Cost Matrix

To
(Destinations)
From
(Sources)
Albuquerque Cleveland
Boston
Des Moines $5 $4 $3

Evansville $8 $4 $3

Fort $9 $7 $5
Lauderdale
 Transportation Problem

Unit Shipping Cost : 1Unit, Factory to Warehouse & Total Demand and Total Supply

Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity
Des Moines 5 4 3
100
(D)

Evansville 8 4 3
300
(E)

Fort 9 7 5
Lauderdale 300
(F)
Warehouse
Req. 300 200 200 700
 Transportation Problem

Initial Solution Using the Northwest Corner Rule

• Start in the upper left-hand cell and allocate units to

shipping routes as follows:

– Exhaust the supply (factory capacity) of each row before moving down
to the next row.

– Exhaust the demand (warehouse) requirements of each column before

moving to the next column to the right.

– Check that all supply and demand requirements are met.

 Transportation Problem

Initial Solution ( North West Corner Rule )

Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity
Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
200 100 300
(E)

Fort 9 7 5
Lauderdale 100 200 300
(F)
Warehouse
Req. 300 200 200 700
 Transportation Problem

The Stepping-Stone Method

• 1. Select any unused square to evaluate.

• 2. Begin at this square. Trace a closed path back to the
original square via squares that are currently being used
(only horizontal or vertical moves allowed).
• 3. Place + in unused square; alternate - and + on each
corner square of the closed path.
• 4. Calculate improvement index: add together the unit cost
figures found in each square containing a +; subtract the
unit cost figure in each square containing a -.
• 5. Repeat steps 1 - 4 for each unused square.
 Transportation Problem

Stepping-Stone Method
 Transportation Problem

Stepping-Stone Method - The Des Moines-to-Cleveland Route

Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity
Des Moines 5 4 3
100 Start 100
(D) - +
Evansville 8 4 3
200 100 300
(E)
+ -
Fort 9 7 5
Lauderdale 100 200 300
(F) + -
Warehouse
Req. 300 200 200 700
 Transportation Problem

Stepping-Stone Method An Improved Solution

Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity

Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
100 200 300
(E)

Fort 9 7 5
Lauderdale 100 200 300
(F)

Warehouse
Req. 300 200 200 700
 Transportation Problem

Third and Final Solution

Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity

Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
200 100 300
(E)

Ft Lauderdale 9 7 5
200 100 300
(F)

Warehouse
Req. 300 200 200 700
 Transportation Problem

MODI Method: 5 Steps

• 1. Compute the values for each row and column:

set Ri + Kj = Cij
for those squares currently used or occupied.
• 2. After writing all equations, set R1 = 0.
• 3. Solve the system of equations for Ri and Kj values.
• 4. Compute the improvement index for each unused square
by the formula improvement index:
– Cij - Ri - Kj
• 5. Select the largest negative index and proceed to solve the
problem as you did using the stepping-stone method.
 Transportation Problem

Find Rj + Kj
K1 K2 K3
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
R1 (D) 100 100

Evansville 8 4 3
R2 (E)
200 100 300

Ft Lauderdale 9 7 5
R3 (F)
100 200 300

Warehouse
Req. 300 200 200 700
 Transportation Problem

If R1=0 Solve for R2, R3, K1, K2, K3

K1 5 K2 1 K3 -1
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
0 R 1 (D) 100 100

Evansville 8 4 3
3 R 2 (E)
200 100 300

Ft Lauderdale 9 7 5
6 R 3 (F)
100 200 300

Warehouse
Req. 300 200 200 700
 Transportation Problem

Finding Where to Reduced Costs Most

5 K1 1 K2 -1 K3
Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity
Des Moines 5 4 3
0 R 1 (D) 100 4-0-1=3 3-0+1=4
100

Evansville 8 4 3
3 R 200 100 300
2 (E) 3-3+1=1
Ft Lauderdale 9 7 5
6 R 3 (F) 9-6-5=-2
100 200 300

Warehouse
Req. 300 200 200 700

Looking for Most Negative Improvement Index (Reduce Costs)

 Transportation Problem

Only One Stepping-Stone Loop Needed

Albuquerque Boston Cleveland Factory
(A) (B) (C) Capacity

Des Moines 5 4 3
100
(D)
100
Evansville 8 4 3
300
(E) -200 100 +
Ft Lauderdale 9 7 5
Start 200 300
(F) + 100 -
Warehouse
Req. 300 200 200 700

Can Add in Ft Lauderdale to Albuquerque Max of 100

 Transportation Problem

Improved Solution

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity

Des Moines 5 4 3
100 100
(D)

Evansville 8 4 3
100 200 300
(E)

Ft Lauderdale 9 7 5
100 200 300
(F)

Warehouse
Req. 300 200 200 700
 Transportation Problem

Find Rj + Kj

Albuquerque Boston Cleveland Factory

K
(A)1
K
(B)2
K
(C)3 Capacity
Des Moines 5 4 3
R 1 (D) 100 100

Evansville 8 4 3
R 100 200 300
2 (E)
Ft Lauderdale 9 7 5
R 3 (F)
100 200 300

Warehouse
Req. 300 200 200 700
 Transportation Problem

If R1=0 Solve for R2, R3, K1, K2, K3

Albuquerque Boston Cleveland Factory

5K
(A)1
1K
(B)2
K
1
(C)3 Capacity
Des Moines 5 4 3
R
0 1 (D) 100 100

Evansville 8 4 3
R
3 100 200 300
2 (E)
Ft Lauderdale 9 7 5
R
4 3 (F)
100 200 300

Warehouse
Req. 300 200 200 700
 Transportation Problem

Finding Best Improvement Index

Albuquerque Boston Cleveland Factory

5K
(A)1
1K
(B)2
K
1
(C)3 Capacity
Des Moines 5 4 3
R
0 1 (D) 100 4-0-1=3 3-0-1=2
100

Evansville 8 4 3
R
3 100 200 300
2 (E) 3-3-1=-1
Ft Lauderdale 9 7 5
R
4 3 (F)
100
7-4-1=2 200 300

Warehouse
Req. 300 200 200 700
 Transportation Problem

Again, a Single Stepping-Stone is Needed

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 Start 3
100 - 200 300
(E) +
Ft Lauderdale 9 7 5
100 200 300
(F) + -
Warehouse
Req. 300 200 200 700

Can Add in Evansville to Cleveland Max of 100

 Transportation Problem

Resulting Step

Albuquerque Boston Cleveland Factory

(A) (B) (C) Capacity
Des Moines 5 4 3
100 100
(D)
Evansville 8 4 3
200 100 300
(E)
Ft Lauderdale 9 7 5
200 100 300
(F)
Warehouse
Req. 300 200 200 700
 Transportation Problem

Is it Optimal?

Albuquerque Boston Cleveland Factory

5
(A)
2
(B)
1
(C) Capacity
Des Moines 5 4 3
0 (D) 100 4-0-2=2 3-0-1=2 100

Evansville 8 4 3
2 (E) 8-2-5=1 200 100 300

Ft Lauderdale 9 7 5
4 (F)
200
7-4-2=1 100 300

Warehouse
Req. 300 200 200 700

No further Reduction Possible. $500+1800+800+300+500=$3900

 Transportation Problem

Special Problems in Transportation Method

• Unbalanced Problem

– Demand Less than Supply

– Demand Greater than Supply

• Degeneracy
• More Than One Optimal Solution
 Transportation Problem

Unbalanced Problem Demand Less than Supply

Customer Dummy
1 Customer 2 Factory
Capacity
Factory 1 8 5 0
170

Factory 2 15 10 0
130

Factory 3 3 9 0
80

Customer
Requirements 150 80 150 380
 Transportation Problem

Unbalanced Problem Supply Less than Demand

Customer Customer Customer Factory

1 2 3 Capacity

Factory 1 8 5 16
170

Factory 2 15 10 7
130

Dummy 0 0 0
80

Customer
Requirements 150 80 150 380
 Transportation Problem

Degeneracy
Customer Customer Customer Factory
1 2 3 Capacity

Factory 1 5 4 3
100 100

Factory 2 8 4 3
100 20 120

Factory 3 9 7 5
80 80

Customer
Requirements 100 100 100 300
 Transportation Problem

Degeneracy - Coming Up!

Customer Customer Customer Factory

1 2 3 Capacity

Factory 1 8 5 16
70 70

Factory 2 15 10 7
50 80 130

Factory 3 3 9 10
30 50 80

Customer
Requirements 150 80 50 280
 Transportation Problem

Stepping-Stone Method - The Des Moines-to-Cleveland Route

Albuquerque Cleveland
Boston Factory
(A) (C)
(B) Capacity

Des Moines 5 4 Start 3

100 100
(D) - +
Evansville 8 4 3
200 100 300
(E)
+ -
Fort 9 7 5
Lauderdale 100 200 300
(F)
+ -
Warehouse
Req. 300 200 200 700
Transportation Problem

Thank you for your attention