TI234310

Transportation, Transshipment, and

Assignment Problems

Effi Latiffianti, Ph.D.

Translated from the original version authored by Stefanus Eko Wiratno.
 Outline

For each of the transportation, assignment, and transshipment problems, we will

discuss the following subtopics:
▪ The network model (visualization).
▪ LP Formulation
▪ Solving methods.

2
 Network Models

⚫ A network model is one which can be represented by

– a set of nodes,
– a set of arcs, and
– functions (e.g. costs, supplies, demands, etc.) associated with the arcs
and/or nodes.
⚫ Transportation, assignment, and transshipment problems of this chapter, as
well as the
⚫ The shortest route, minimal spanning tree, maximal flow, and minimum cost
flow problems
⚫ PERT/CPM problems are all examples of network problems.

3
 The Problems
⚫ Each of these three models (transportation, assignment, and transshipment
models) can be formulated as linear programs and solved by general purpose
linear programming codes.
⚫ For each of the three models, if the right-hand side of the linear programming
formulations are all integers, the optimal solution will be in terms of integer
values for the decision variables.
⚫ However, there are many computer packages which contain separate
computer codes for these models which take advantage of their network
structure.

4
 The Transportation Problem

The transportation problem seeks to minimize the total shipping costs of

transporting goods
⚫ from 𝑚 origins (each with a supply 𝑠𝑖)
⚫ to 𝑛 destinations (each with a demand 𝑑𝑗),
⚫ when the unit shipping cost from an origin, 𝑖, to a destination, 𝑗, is 𝑐𝑖𝑗.

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 The Transportation Problem: Network Model

⚫ Network Representation
1 𝑑1
𝑐11
𝑠1 1 𝑐12
𝑐13
2 𝑑2
𝑐21 𝑐22
𝑠2 2
𝑐23
3 𝑑3

SOURCES DESTINATIONS

6
 Transportation Problem: LP Formulation
⚫ The linear programming formulation in terms of the amounts shipped from the
origins to the destinations, 𝑥𝑖𝑗, can be written as:

Min ෍ ෍ 𝑐𝑖𝑗 𝑥𝑖𝑗

𝑖 𝑗

s.t.
෍ 𝑥𝑖𝑗 ≤ 𝑠𝑖 for each origin 𝑖
𝑗

෍ 𝑥𝑖𝑗 = 𝑑𝑗 for each destination 𝑗

𝑖
𝑥𝑖𝑗 ≥ 0 for all 𝑖 and 𝑗

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 The Transportation Problem Interpretation

⚫ Write the objective function for the general LP formulation of the

Transportation Problem using only words -- do not use any mathematical
symbols.
⚫ Write constraints for the general LP formulation of the Transportation
Problem using only words -- do not use any mathematical symbols.

8
 Transportation Problem: Special Situations

⚫ LP Formulation Special Cases or Situations.

Special-case modifications to the linear programming formulation can be
made, such as:
– Minimum shipping guarantees from 𝑖 to 𝑗:
𝑥𝑖𝑗 ≥ 𝐿𝑖𝑗
– Maximum route capacity from i to j:
𝑥𝑖𝑗 ≤ 𝐿𝑖𝑗
– Unacceptable routes:
delete the variable, or assign a large coefficient in the OF.

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 Transportation Problem (1)

⚫ To solve the transportation problem by its special purpose algorithm, it is

required that the sum of the supplies at the origins equal the sum of the
demands at the destinations.
– If the total supply is greater than the total demand, a dummy destination is
added with demand equal to the excess supply, and shipping costs from all
origins are zero.
– Similarly, if total supply is less than total demand, a dummy origin is added.
⚫ When solving a transportation problem by its special purpose algorithm,
unacceptable shipping routes are given a cost of +M (a very large number).

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 Transportation Problem (2)
⚫ A transportation tableau is given below. Each cell represents a shipping route
(which is an arc on the network and a decision variable in the LP formulation), and
the unit shipping costs are given in an upper right hand box in the cell.

D1 D2 D3 Supply

15 30 20
S1 50

30 40 35
S2 30

Demand 25 45 10

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 Formulation problem (3)
⚫ Write the formulation for the following Transportation Problem:

12
 Transportation Problem (4)

⚫ The transportation problem is solved in two phases:

– Phase I — Obtaining an initial feasible solution
– Phase II — Moving toward optimality
⚫ In Phase I, the Least-Cost Method/Minimum-Cost Procedure (or North-West
Corner Method or Vogel Approximation Method) can be used to establish an
initial basic feasible solution without doing numerous iterations of the simplex
method.
⚫ In Phase II, the Stepping Stone Method, using the MODI method for evaluating
the reduced costs may be used to move from the initial feasible solution to the
optimal one.

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 Transportation Algorithm: Northwest-corner method (1)

The method starts at the northwest-corner cell (route) of the tableau

(variable 𝑥11 ).
Step 1. Allocate as much as possible to the selected cell, and adjust the associated
amounts of supply and demand by subtracting the allocated amount.
Step 2. Cross out the row or column with zero supply or demand to indicate that
no further assignments can be made in that row or column. If both a row
and a column net to zero simultaneously, cross out one only, and leave a
zero supply (demand) in the uncrossed-out row (column).
Step 3. If exactly one row or column is left uncrossed out, stop. Otherwise, move to
the cell to the right if a column has just been crossed out or below if a row
has just been crossed out. Go to step 1.

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 Transportation Algorithm: Northwest-corner method (2)
SunRay Transport Company ships truckloads of grain from three silos to four mills. The supply (in truckloads) and the
demand (also in truckloads) together with the unit transportation costs per truckload on the different routes are
summarized in Table below. The unit transportation costs, cij (shown in the northeast corner of each box), are in
hundreds of dollars. The model seeks the minimum cost shipping schedule between the silos and the mills

The starting basic solution is 𝑥11 = 5, 𝑥12 = 10, 𝑥22 =

5, 𝑥23 = 15, 𝑥24 = 5, 𝑥34 = 10.
The associated cost of the schedule is 𝑧 = 5 × 10 + 10 ×
2 + 5 × 7 + 15 × 9 + 5 × 20 + 10 × 18 = $520
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 Transportation Algorithm: Least cost method (1)

The least-cost method finds a better starting solution by targeting the cheapest
routes.
Step 1. It assigns as much as possible to the cell with the smallest unit cost (ties are
broken arbitrarily).
Step 2. The satisfied row or column is crossed out and the amounts of supply and
demand are adjusted accordingly. If both a row and a column are satisfied
simultaneously, only one is crossed out, the same as in the northwest-
corner method.
Step 3. Select the uncrossed-out cell with the smallest unit cost and repeat the
process until exactly one row or column is left uncrossed out

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 Transportation Algorithm: Least cost method (2)

The starting solution (consisting of six basic variables) is 𝑥12 = 15, 𝑥14 = 0, 𝑥23 = 15, 𝑥24 = 10,
𝑥31 = 5, 𝑥34 = 5. The associated objective value is
𝑧 = 15 × 2 + 0 × 11 + 15 × 9 + 10 × 20 + 5 × 4 + 5 × 18 = $475,
which happens to be better than the northwest-corner solution

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 Transportation Algorithm: Vogel approximation method (1)
VAM is an improved version of the least-cost method that generally, but not always, produces better
starting solutions.
Step 1. For each row (column), determine a penalty measure by subtracting the smallest unit cost in the
row (column) from the next smallest unit cost in the same row (column). This penalty is actually a
measure of lost opportunity one forgoes if the smallest unit cost cell is not chosen.
Step 2. Identify the row or column with the largest penalty, breaking ties arbitrarily. Allocate as much as
possible to the variable with the least unit cost in the selected row or column. Adjust the supply
and demand, and cross out the satisfied row or column. If a row and a column are satisfied
simultaneously, only one of the two is crossed out, and the remaining row (column) is assigned
zero supply (demand).
Step 3. (a) If exactly one row or column with zero supply or demand remains uncrossed out, stop.
(b) If one row (column) with positive supply (demand) remains uncrossed out, determine the basic
variables in the row (column) by the least-cost method. Stop.
(c) If all the uncrossed-out rows and columns have (remaining) zero supply and demand,
determine the zero basic variables by the least-cost method. Stop.
(d) Otherwise, go to step 1.

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 Transportation Algorithm: VAM (2)

Continuing in the same manner, row 2 will produce the highest penalty 1= 112, and we assign
𝑥23 = 15, which crosses out column 3 and leaves 10 units in row 2. Only column 4 is left, and it has
a positive supply of 15 units. Applying the least-cost method to that column, we successively assign
𝑥14 = 0, 𝑥34 = 5, and 𝑥24 = 10 (verify!).
The associated objective value for this solution is
𝑧 = 15 × 2 + 0 × 11 + 15 × 9 + 10 × 20 + 5 × 4 + 5 × 18 = $475.
This solution happens to have the same objective value as in the least-cost method.

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 Transportation Algorithm: Stepping stone method (1)

⚫ Phase I - Minimum-Cost Method

Step 1: Select the cell with the least cost. Assign to this cell the minimum
of its remaining row supply or remaining column demand.
Step 2: Decrease the row and column availabilities by this amount and
remove from consideration all other cells in the row or column
with zero availability/demand. (If both are simultaneously
reduced to 0, assign an allocation of 0 to any other unoccupied
cell in the row or column before deleting both.) GO TO STEP 1.

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 Transportation Algorithm: Stepping stone method (2)

⚫ Phase II - Stepping Stone Method

Step 1: For each unoccupied cell, calculate the reduced cost by the MODI
method described below. Select the unoccupied cell with the most
negative reduced cost. (For maximization problems select the
unoccupied cell with the largest reduced cost.) If none, STOP.

Step 2: For this unoccupied cell generate a stepping stone path by forming
a closed loop with this cell and occupied cells by drawing
connecting alternating horizontal and vertical lines between them.
Determine the minimum allocation where a subtraction is to be
made along this path.

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 Transportation Algorithm: Stepping stone method (3)
Step 3: Add this allocation to all cells where additions are to be made, and
subtract this allocation to all cells where subtractions are to be made
along the stepping stone path. (Note: An occupied cell on the
stepping stone path now becomes 0 (unoccupied).
If more than one cell becomes 0, make only one unoccupied; make
the others occupied with 0's.) GO TO STEP 1.

The closed loop 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 (occupied cell)

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 New York Chicago Los Angeles Boston Dummy Los Angeles Boston New York Chicago Dummy
8 13 25 28 0 25 28 8 13 0
Mempis Mempis
150 -1 1 2 -10 130 3 14 13 20
15 12 26 25 0 26 25 15 12 0
Denver Denver
9 200 4 1 -8 1 130 21 12 70
0 6 16 17 0 16 17 0 6 0
New York New York
200 150 0 -1 -2 -15 -14 350 0 -6
6 0 14 16 0 14 16 6 0 0
Chichago Chichago
8 -4 130 130 90 -11 -9 12 350 0

Los Angeles Boston New York Chicago Dummy New York Chicago Los Angeles Boston Dummy
Mempis 25 28 8 13 0 8 13 25 28 0
Mempis
130 20 -10 -11 -24 20 -7 130 -5 -8
Denver 26 25 15 12 0 15 12 26 25 0
Denver
4 110 90 -9 -21 15 0 9 130 70
New York 16 17 0 6 0 0 6 16 17 0
New York
9 7 260 90 -6 330 -6 -1 -8 20
Chichago 14 16 6 0 0 6 0 14 16 0
Chichago
13 12 12 260 90 18 350 9 3 12

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 Transportation Algorithm: Stepping stone method (4)

⚫ MODI Method (for obtaining reduced costs)

Associate a number, 𝑢𝑖 , with each row and 𝑣𝑗 with each column.
Step 1: Set 𝑢1 = 0.
Step 2: Calculate the remaining 𝑢𝑖 's and 𝑣𝑖 's by solving the
relationship 𝑐𝑖𝑗 = 𝑢𝑖 + 𝑣𝑗 for occupied cells.
Step 3: For unoccupied cells 𝑖, 𝑗 , the reduced cost = 𝑐𝑖𝑗 −𝑢𝑖 − 𝑣𝑗

24
 Example: BBC (1)
Building Brick Company (BBC) has orders for 80 tons of bricks at three suburban
locations as follows: Northwood — 25 tons, Westwood — 45 tons, and
Eastwood — 10 tons. BBC has two plants, each of which can produce 50 tons
per week.
How should end of week shipments be made to fill the above orders given the
following delivery cost per ton:

Northwood Westwood Eastwood

Plant 1 24 30 40
Plant 2 30 40 42

25
 Example: BBC (2)
⚫ Initial Transportation Tableau
Since total supply = 100 and total demand = 80, a dummy destination is created
with demand of 20 and 0 unit costs.

Northwood Westwood Eastwood Supply

24 30 40
Plant 1 50

30 40 42
Plant 2 50

Demand 25 45 10

26
 Example: BBC (3)
⚫ Initial Transportation Tableau
Since total supply = 100 and total demand = 80, a dummy destination is
created with demand of 20 and 0 unit costs.

Northwood Westwood Eastwood Dummy Supply

24 30 40 0
Plant 1 50

30 40 42 0
Plant 2 50

Demand 25 45 10 20
27
 Transportation Problem: Assess your understanding

1. Write the objective function for the example problem.

2. Write the constraints for the example problem.
3. Think of an example of this type of problem (“transportation”) that
might occur in your field of expertise.

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 Example: BBC – Least Cost Algorithm

⚫ Least Cost Starting Procedure

Iteration 1: Tie for least cost (0), arbitrarily select 𝑥14. Allocate 20. Reduce 𝑠1
by 20 to 30 and delete the Dummy column.
Iteration 2: Of the remaining cells the least cost is 24 for 𝑥11. Allocate 25.
Reduce 𝑠1 by 25 to 5 and eliminate the Northwood column.
Iteration 3: Of the remaining cells the least cost is 30 for 𝑥12. Allocate 5.
Reduce the Westwood column to 40 and eliminate the Plant 1
row.
Iteration 4: Since there is only one row with two cells left, make the final
allocations of 40 and 10 to 𝑥22 and 𝑥23, respectively.

29
 Example: BBC – Iteration 1 (1)
MODI Method
1. Set 𝑢1 = 0
2. Since 𝑢1 + 𝑣𝑗 = 𝑐1𝑗 for occupied cells in row 1, then 𝑣1 = 24, 𝑣2 = 30, 𝑣4 = 0.
3. Since 𝑢𝑖 + 𝑣2 = 𝑐𝑖2 for occupied cells in column 2, then 𝑢2 + 30 = 40, hence
𝑢2 = 10.
4. Since 𝑢2 + 𝑣𝑗 = 𝑐2𝑗 for occupied cells in row 2, then 10 + 𝑣3 = 42, hence 𝑣3 =
32.
Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 25 5 20 0

30 40 42 0
Plant 2 40 10 10

𝑣𝑗 24 30 32 0

30
 Example: BBC – Iteration 1 (2)
Calculate the reduced costs by 𝑐𝑖𝑗 − 𝑢𝑖 − 𝑣𝑗.
Unoccupied Cell Reduced Cost
1,3 40 − 0 − 32 = 8
(2,1) 30 − 24 − 10 = −4
(2,4) 0 − 10 − 0 = −10

Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 25 5 +8 20 0

30 40 42 0
Plant 2 -4 40 10 -10 10

𝑣𝑗 24 30 32 0
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 Example: BBC – Iteration 1 (3)
⚫ Stepping Stone Method
The stepping stone path for cell (2,4) is (2,4), (1,4), (1,2), (2,2). The allocations in
the subtraction cells are 20 and 40, respectively. The minimum is 20, and hence
reallocate 20 along this path. Thus for the next tableau:
𝑥24 = 0 + 20 = 20 (0 is its current allocation)
𝑥14 = 20 − 20 = 0 (blank for the next tableau)
𝑥12 = 5 + 20 = 25
𝑥22 = 40 − 20 = 20
The other occupied cells remain the same.

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 Example: BBC – Iteration 1 tableau
Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 25 5 +8 20 0

30 40 42 0
Plant 2 -4 40 10 -10 10

𝑣𝑗 24 30 32 0
Northwood Westwood Eastwood Dummy
24 30 40 0
Plant 1 25 25 0

30 40 42 0
Plant 2 20 10 20

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 Example: BBC – Iteration 2 (1)
MODI Method
The reduced costs are found by calculating the 𝑢𝑖 's and 𝑣𝑗's for this tableau.
1. Set 𝑢1 = 0.
2. Since 𝑢1 + 𝑣𝑗 = 𝑐𝑖𝑗 for occupied cells in row 1, then 𝑣1 = 24, 𝑣2 = 30.
3. Since 𝑢𝑖 + 𝑣2 = 𝑐𝑖2 for occupied cells in column 2, then 𝑢2 + 30 = 40, or 𝑢2 = 10.
4. Since 𝑢2 + 𝑣𝑗 = 𝑐2𝑗 for occupied cells in row 2, then 10 + 𝑣3 = 42 or 𝑣3 = 32; and, 10 + 𝑣4 =
0 or 𝑣4 = −10.

Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 25 25 0

30 40 42 0
Plant 2 20 10 20 10

𝑣𝑗 24 30 32 -10

34
 Example: BBC – Iteration 2 (2)
Calculate the reduced costs (circled numbers on thenext slide) by 𝑐𝑖𝑗 − 𝑢𝑖 + 𝑣𝑗.
Unoccupied Cell Reduced Cost
1,3 40 − 0 − 32 =8
1,4 0 − 0 − −10 = 10
(2,1) 30 − 10 − 24 = −4

Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 25 25 +8 +10 0

30 40 42 0
Plant 2 -4 20 10 20 10

𝑣𝑗 24 30 32 -10

35
 Example: BBC – Iteration 2 (3)

Stepping Stone Method

The most negative reduced cost is = −4 determined by 𝑥21. The stepping stone
path for this cell is (2,1), (1,1), (1,2), (2,2). The allocations in the subtraction cells
are 25 and 20 respectively. Thus the new solution is obtained by reallocating 20 on
the stepping stone path. Thus for the next tableau:
𝑥21 = 0 + 20 = 20 (0 is its current allocation)
𝑥11 = 25 − 20 = 5
𝑥12 = 25 + 20 = 45
𝑥22 = 20 − 20 = 0 (blank for the next tableau)
The other occupied cells remain the same.

36
 Example: BBC (Iteration 2 tableau)
Northwood Westwood Eastwood Dummy 𝑢𝑖
24 30 40 0
Plant 1 25 25 +8 +10 0

30 40 42 0
Plant 2 -4 20 10 20 10

𝑣𝑗 24 30 32 -10

Northwood Westwood Eastwood Dummy

24 30 40 0
Plant 1 5 45

30 40 42 0
Plant 2 20 0 10 20

37
 Example: BBC – Iteration 3 (1)
MODI Method
The reduced costs are found by calculating the 𝑢𝑖's and 𝑣𝑗's for this tableau.
1. Set 𝑢1 = 0
2. Since 𝑢1 + 𝑣𝑗 = 𝑐1𝑗 for occupied cells in row 1, then 𝑣1 = 24 and 𝑣2 = 30.
3. Since 𝑢𝑖 + 𝑣1 = 𝑐𝑖1 for occupied cells in column 2, then 𝑢2 + 24 = 30 or
𝑢2 = 6.
4. Since 𝑢2 + 𝑣𝑗 = 𝑐2𝑗 for occupied cells in row 2, then 6 + 𝑣3 = 42 or 𝑣3 = 36,
and 6 + 𝑣4 = 0 or 𝑣4 = −6.
Northwood Westwood Eastwood Dummy 𝑢𝑖
24 30 40 0
Plant 1 5 45 0

30 40 42 0
Plant 2 20 10 20 6

𝑣𝑗 24 30 36 -6
38
 Example: BBC – Iteration 3 (2)
Calculate the reduced costs (circled numbers on the next slide) by 𝑐𝑖𝑗 − 𝑢𝑖 + 𝑣𝑗.
Unoccupied Cell Reduced Cost
1,3 40 − 0 − 36 = 4
(1,4) 0 − 0 − −6 = 6
(2,2) 40 − 6 − 30 = 4

Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 5 45 +4 +6 0

30 40 42 0
Plant 2 20 4 10 20 10

𝑣𝑗 24 30 32 -10
39
 Example: BBC – Iteration 3 tableau

Since all the reduced costs are non-negative, this is the optimal tableau.

Northwood Westwood Eastwood Dummy 𝑢𝑖

24 30 40 0
Plant 1 5 45 +4 +6 0

30 40 42 0
Plant 2 20 +4 10 20 6

𝑣𝑗 24 30 36 -6

40
 Example: BBC Optimal Solution

⚫ Optimal Solution

From To Amount Cost

Plant 1 Northwood 5 120
Plant 1 Westwood 45 1,350
Plant 2 Northwood 20 600
Plant 2 Eastwood 10 420
Total Cost = $2,490

41
 Example: Production - Distribution
A company owns four plants located in different places. Each plant manufactures the same product,
but production and raw material costs differ from plant to plant. There are five regional warehouses
and customers pay different price at each. Find the best production and distribution schedule for the
data given in table below
Plant 1 2 3 4
Production 20 25 19 20
Raw materials 10 9 12 8
Transportation costs per unit
Warehouse 1 4 10 12 19
Warehouse 2 3 7 5 6
Warehouse 3 5 9 4 7
Warehouse 4 7 5 9 3
Warehouse 5 6 8 7 6
Assume that the capacities of the four plants, for a given planning horizon are 200, 250, 325, and 150
units. Also, assume that the maximum sales are 130, 160, 200, 150, and 210 for the five warehouses.
The sales prices for these warehouses are 40, 42, 41, 42, and 41 dollars per unit

42
 Example: Production - Distribution
Total supply = 200 + 250 + 325 + 150 = 925 and total demand = 130 + 160 + 200 +
150 + 210 = 850  add dummy warehouse = 75.
Transportation model for profit maximization

WAREHOUSE
W1 W2 W3 W4 W5 Dummy
P1 6 9 6 5 5 0 200
P2 -4 1 -2 3 -1 0 250
PLANT
P3 -3 6 6 2 3 0 325
P4 -7 8 6 11 7 0 150
130 160 200 150 210 75

To convert this maximization problem into an equivalent minimization problem, we can

multiply all entries of the profit matrix by -1 and add 11 (the maximal profit entry)

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 Example: Production - Distribution
Transportation model for cost minimization
WAREHOUSE
W1 W2 W3 W4 W5 Dummy
P1 5 2 5 6 6 11 200
P2 15 10 13 8 12 11 250
PLANT P3 14 5 5 9 8 11 325
P4 18 3 5 0 4 11 150
130 160 200 150 210 75
Optimal solution is :
WAREHOUSE
W1 W2 W3 W4 W5 Dummy
P1 130 70 0 0 0 0
P2 0 0 0 150 25 75
PLANT
P3 0 90 200 0 35 0
P4 0 0 0 0 150 0

44
 TI234310

Assignment Problems
 Assignment Problem (1)
⚫ An assignment problem seeks to minimize the total cost assignment of 𝑚
workers to 𝑚 jobs, given that the cost of worker 𝑖 performing job j is 𝑐𝑖𝑗.
⚫ It assumes all workers are assigned and each job is performed.
⚫ An assignment problem is a special case of a transportation problem in
which all supplies and all demands are equal to 1; hence assignment
problems may be solved as linear programs.
⚫ The network representation of an assignment problem with three
workers and three jobs is shown on the next slide.

46
 Assignment Problem (2)
⚫ Network Representation

𝑐11
1 1
𝑐12
𝑐13

𝑐21
2 𝑐22 2
𝑐23
𝑐31
𝑐32
3 𝑐33 3
WORKERS JOBS

47
 Assignment Problem (3)
⚫ Linear Programming Formulation

Min cij xij

i j

s.t
x
j
ij =1 for each worker i

x
i
ij =1 for each job j

xij = 0 or 1 for all i and j

48
 Assignment Problem (4)
Assess your understanding:
1. Write the objective function for the general LP formulation of the
Assignment Problem using only words – do not use any mathematical
symbols.
2. Write contraint for the general LP formulation of the Assignment
Problem using only words – do not use any mathematical symbols.

49
 Assignment Problem: Special Considerations

Special considerations can include:

⚫ A modification to the right-hand side of the first constraint set can be
made if a worker is permitted to work more than 1 job.
⚫ number of workers does not equal the number of jobs — add dummy
workers/jobs with 0 assignment costs as needed. (note: this may not be
necessary if a worker/job is allowed more than one job/worker)
⚫ worker 𝑖 cannot do job 𝑗 — assign 𝑐𝑖𝑗 = +𝑀 (where +𝑀 = some very
large number--implying a very large cost!).

50
 Assignment Problem: Special Considerations

Additional special considerations can include:

⚫ maximization objective — create an opportunity loss matrix subtracting
all profits for each job from the maximum profit for that job before
beginning the Hungarian method

51
 Hungarian Method (1)
The Hungarian method solves minimization assignment problems with 𝑚 workers and 𝑚
jobs.
Step 1: For each row, subtract the minimum number in that row from all numbers in
that row.
Step 2: For each column, subtract the minimum number in that column from all
numbers in that column.
Step 3: Draw the minimum number of lines to cover all zeroes. If this number = 𝑚, STOP
— an assignment can be made.
Step 4: Determine the minimum uncovered number (call it 𝑑).
– Subtract 𝑑 from uncovered numbers.
– Add 𝑑 to numbers covered by two lines.
– Numbers covered by one line remain the same.
– Then, GO TO STEP 3.

52
 Hungarian Method (3)

⚫ Finding the Minimum Number of Lines and Determining the Optimal Solution
Step 1: Find a row or column with only one unlined zero and circle it. (If all
rows/columns have two or more unlined zeroes choose an arbitrary
zero.)
Step 2: If the circle is in a row with one zero, draw a line through its column. If
the circle is in a column with one zero, draw a line through its row. One
approach, when all rows and columns have two or more zeroes, is to
draw a line through one with the most zeroes, breaking ties arbitrarily.
Step 3: Repeat step 2 until all circles are lined. If this minimum number of lines
equals 𝑚, the circles provide the optimal assignment.

53
 Example: Hungry Owner

A contractor pays his subcontractors a fixed fee plus mileage for work performed.
On a given day the contractor is faced with three electrical jobs associated with
various projects. Given below are the distances between the subcontractors and the
projects. Project
A B C
Subcontractors

Westside 50 36 16
Federated 28 30 18
Goliath 35 32 20
Universal 25 25 14

How should the contractors be assigned to minimize total costs?

54
 Example: Hungry Owner
Network representation (note the “dummy” project)

West. 50 A
36
0 16

28
Fed. 30 B
18
0

35
32
Gol.
0
20 C

25
25
14
Univ. 0 Dum.

55
 The Assignment Problem:
Assess your understanding:
⚫ Write the LP formulation for the Hungry Owner problem.
⚫ Think of and describe an “assignment” problem that occurs in your
field of expertise.

56
 Example: Hungry Owner (1)
⚫ Initial Tableau Setup
Since the Hungarian algorithm requires that there be the same number of rows as
columns, add a Dummy column so that the first tableau is:
Project
A B C Dummy
Subcontractors

Westside 50 36 16 0
Federated 28 30 18 0
Goliath 35 32 20 0
Universal 25 25 14 0

For Practice: Write the Formulation for this problem.

57
 Example: Hungry Owner (2)
Step 1: Subtract minimum number in each row from all numbers in that row. Since
each row has a zero, we would simply generate the same matrix above.
Step 2: Subtract the minimum number in each column from all numbers in the column.
For A it is 25, for B it is 25, for C it is 14, for Dummy it is 0. This yields:

Project
A B C Dummy
Subcontractors

Westside 25 11 2 0
Federated 3 5 4 0
Goliath 10 7 6 0
Universal 0 0 0 0

58
 Example: Hungry Owner (3)
Step 3: Draw the minimum number of lines to cover all zeroes. Although one can "eyeball"
this minimum, use the following algorithm. If a "remaining" row has only one zero,
draw a line through the column. If a remaining column has only one zero in it,
draw a line through the row.
Project
A B C Dummy
Subcontractors

Westside 25 11 2 0
Federated 3 5 4 0
Goliath 10 7 6 0
Universal 0 0 0 0

Step 4: The minimum uncovered number is 2 (circled).

59
 Example: Hungry Owner (4)

Step 5: Subtract 2 from uncovered numbers; add 2 to all numbers covered

by two lines. This gives:

Project
A B C Dummy
Subcontractors

Westside 23 9 0 0
Federated 1 3 2 0
Goliath 8 5 4 0
Universal 0 0 0 2

60
 Example: Hungry Owner (5)
Step 3: Draw the minimum number of lines to cover all zeroes.
Project

A B C Dummy

Westside 23 9 0 0
Subcontractors

Federated 1 3 2 0
Goliath 8 5 4 0
Universal 0 0 0 2

Step 4: The minimum uncovered number is 1 (circled).

61
 Example: Hungry Owner (6)
Step 5: Subtract 1 from uncovered numbers. Add 1 to numbers covered by two
lines. This gives:
Project

A B C Dummy

Westside 23 9 0 1
Subcontractors

Federated 0 2 1 0
Goliath 7 4 3 0
Universal 0 0 0 3

62
 Example: Hungry Owner (7)
Step 4: The minimum number of lines to cover all 0's is four.
There is a minimum-cost assignment. The optimal assignment is:

Subcontractors Project Distance

Westside C 16
Federated A 28
Universal B 25
Goliath Unassigned
Total distance = 69 miles

63
 Solving layout problem using assignment (1)
The following figure gives a schematic layout of a
machine shop with its existing work centers
designated by squares 1, 2, 3, and 4. Four new work
centers, I, II, III, and IV, are to be added to the shop at
the locations designated by circles 𝑎, 𝑏, 𝑐, and 𝑑. The
objective is to assign the new centers to the proposed
locations to minimize the total materials handling
traffic between the existing centers and the proposed
ones. Table below summarizes the frequency of trips
between the new centers and the old ones. Materials
handling equipment travels along the rectangular
aisles intersecting at the locations of the centers. For
example, the one-way travel distance (in meters)
between center 1 and location 𝑏 is 30 + 20 = 50 m.

64
Solving layout problem using assignment (2)

a b c d
1 50 50 95 45
2 30 30 55 65
3 70 50 20 55
4 100 60 55 25

50 × 10 = 500
30 × 7 = 280
a b c d
70 × 0 = 0 I 1810 1370 1940 1180
100 × 11 = 1100 II 1090 770 625 695
1180
III 890 770 995 1095
IV 1140 820 985 745

65
Solving layout problem using assignment (3)

a b c d Min a b c d
I 1810 1370 1940 1180 1180 I 630 190 760 0
II 1090 770 625 695 625 II 465 145 0 70
III 890 770 995 1095 770 III 120 0 225 325
IV 1140 820 985 745 745 IV 395 75 240 0
Min 120 0 0 0

a b c d a b c d
I 510 190 760 0 I 435 115 760 0
II 345 145 0 70 II 270 70 0 70
III 0 0 225 325 III 0 0 300 400
IV 275 75 240 0 IV 200 0 240 0

TC= 3515

66
Example: Assignment problem

2 10 9 7

15 4 14 8

13 14 16 11

4 15 13 19

67
 Solving transportation problem using assignment (1)
Any transportation problem can be formulated as an assignment problem. To illustrate
the idea, determine an assignment problem that could be used to find the optimal
solution to the transportation problem by using five supply and five demand points. The
following table represents matrix 𝑐𝑖𝑗 . Draw an assignment matrix based on the problem.
How much the minimum cost would you get?

Demand
1 2 3 𝑆𝑖
1 5 6 8 2
Supply

2 10 4 2 2
3 4 9 7 1
𝐷𝑗 2 1 2

68
 Solving transportation problem using assignment (2)
Demand
1 2 3 𝑆𝑖
1 5 6 8 2
Supply

2 10 4 2 2 𝐷11 𝐷12 𝐷21 𝐷31 𝐷32 Supply

3 4 9 7 1
𝐷𝑗 2 1 2 5 5 6 8 8
𝑆11 1
5 5 6 8 8
𝑆12 1
10 10 4 2 2
𝑆21 1
An assignment problem is 10 10 4 2 2
a special case of a 𝑆22 1
transportation problem in
4 4 9 7 7
which all supplies and all 𝑆31 1
demands are equal to 1
Demand 1 1 1 1 1
69
 Solving transportation problem using assignment (3)
5 5 6 8 8
5 5 6 8 8 Alternative 1 0 0 0 3 3
10 10 4 2 2 𝑆1 → 𝐷1 = 1 0 0 0 3 3 𝑆1 → 𝐷1 = 1
10 10 4 2 2 𝑆1 → 𝐷2 = 1
8 8 1 0 0 𝑆1 → 𝐷2 = 1
4 4 9 7 7 𝑆2 → 𝐷3 = 1
8 8 1 0 0 𝑆2 → 𝐷3 = 2
𝑆2 → 𝐷3 = 1 𝑆3 → 𝐷1 = 1
𝑆3 → 𝐷1 = 1 0 0 4 3 3

Alternative 2 0 0 0 3 3
𝑆1 → 𝐷2 = 1 0 0 0 3 3
0 0 1 3 3
𝑆1 → 𝐷1 = 1
0 0 1 3 3 8 8 1 0 0
𝑆2 → 𝐷3 = 1
8 8 2 0 0 𝑆2 → 𝐷3 = 1 8 8 1 0 0
8 8 2 0 0 𝑆3 → 𝐷1 = 1 0 0 4 3 3
0 0 5 3 3
Alternative ……
70
Transshipment
Problems
 Transshipment problem (1)
⚫ Transshipment problems are transportation problems in which a
shipment may move through intermediate nodes (transshipment nodes)
before reaching a particular destination node.
⚫ Transshipment problems can be converted to larger transportation
problems and solved by a special transportation program (software).
⚫ Transshipment problems can also be solved by general purpose linear
programming codes.
⚫ The network representation for a transshipment problem with two
sources, three intermediate nodes, and two destinations is shown on
the next slide.

72
 Transshipment problem (2)
⚫ Network Representation

3 𝑐36
𝑐13 𝑐37
𝑠1 1 𝑐14 6 𝑑1
𝑐15 𝑐46
4
𝑐47
𝑐23 𝑐24
𝑐56 7 𝑑2
𝑠2 2
𝑐25
5 𝑐57
SOURCES INTERMEDIATE DESTINATIONS
NODES

73
 Transshipment problem (3)
⚫ Linear programming formulation
𝑥𝑖𝑗 represents the shipment from node 𝑖 to node 𝑗

Min cij xij

i j

s.t.
x
j
ij  si for each origin i

x −x
i
ik
j
kj =0 for each intermediate node k

x
i
ij = dj for each destination j

xij  0 for all i all j

74
 The transshipment problem (4)

Assess your understanding:

1. Write the objective function for the general LP formulation of the
Transshipment Problem using only words -- do not use any mathematical
symbols.
2. For each set of constraints stated above, state what it means – using only
words – do not use any mathematical symbols.

75
 Example: Transshipping (1)
Thomas Industries & Washburn Corporation supply three firms (Zrox, Hewes, Rockwright) with
customized shelving for its offices. They both order shelving from the same two manufacturers,
Arnold Manufacturers and Supershelf, Inc. Currently weekly demands by the users are 50 for Zrox,
60 for Hewes, and 40 for Rockwright. Both Arnold and Supershelf can supply at most 75 units to
its customers. Additional data is shown on the next slide. Because of long standing contracts
based on past orders, unit costs from the manufacturers to the suppliers are:

Thomas Washburn
Arnold 5 8
Supershelf 7 4

The cost to install the shelving at the various locations are:

Zrox Hewes Rockwright
Thomas 1 5 8
Washburn 3 4 4

76
 Example: Transshipping (2)
⚫ Network Representation
Zrox 50

1
5
75 Arnold Thomas 5
8 8

Hewes 60
3
7 4
Super- Wash-
75 shelf burn
4 4
Rock-
wright 40

77
 Example: Transshipping (3)
⚫ Linear Programming Formulation
Decision variables defined
𝑥𝑖𝑗 = amount shipped from manufacturer 𝑖 to supplier 𝑗
𝑥𝑗𝑘 = amount shipped from supplier 𝑗 to customer 𝑘
where 𝑖 = 1 (Arnold), 2 (Supershelf)
𝑗 = 3 (Thomas), 4 (Washburn)
𝑘 = 5 (Zrox), 6 (Hewes), 7 (Rockwright)
Note: A common mistake in formulation is to define the decision variable as 𝑥𝑖𝑗𝑘 – implying
that you have 223 = 12 decisions, when in fact, you only have (22) + (23) = 10
decisions.

78
 Example: Transshipping (4)
⚫ Objective function defined: minimize overall shipping costs
Min 5𝑥13 + 8𝑥14 + 7𝑥23 + 4𝑥24 + 1𝑥35 + 5𝑥36 + 8𝑥37 + 3𝑥45 + 4𝑥46 + 4𝑥47

⚫ Constraints defined
1) Amount out of Arnold : 𝑥13 + 𝑥14 ≤ 75
2) Amount out of Supershelf : 𝑥23 + 𝑥24 ≤ 75
3) Amount through Thomas : 𝑥13 + 𝑥23 − 𝑥35 − 𝑥36 − 𝑥37 = 0
4) Amount through Washburn : 𝑥14 + 𝑥24 − 𝑥45 − 𝑥46 − 𝑥47 = 0
5) Amount into Zrox : 𝑥35 + 𝑥45 = 50
6) Amount into Hewes : 𝑥36 + 𝑥46 = 60
7) Amount into Rockwright : 𝑥37 + 𝑥47 = 40
8) Non-negativity of Variables : 𝑥𝑖𝑗 ≥ 0, for all 𝑖 and 𝑗.

79
Example: Transshipping (5)

80
 Example: Manual solution of transshipping (1)
Widgetco manufactures widgets at two factories, one in
Memphis and one in Denver. The Memphis factory can
produce as many as 150 widgets per day, and the Denver
factory can produce as many as 200 widgets per day.
Widgets are shipped by air to customers in Los Angeles and
Boston. The customers in each city require 130 widgets per
day. Because of the deregulation of airfares, Widgetco
believes that it may be cheaper to first fly some widgets to
New York or Chicago and then fly them to their final
destinations. The costs of flying a widget are shown in the
following table. Widgetco wants to minimize the total cost
of shipping the required widgets to its customers. In this
problem, Memphis and Denver are supply points, with
supplies of 150 and 200 widgets per day, respectively. New
York and Chicago are transshipment points. Los Angeles
and Boston are demand points, each with a demand of 130
widgets per day. A graphical representation of possible
shipments is given in figure below.

81
 Example: Manual solution of transshipping (2)
How the optimal solution to a transshipment problem can be found by solving a transportation problem?
(Construct a balanced transportation problem by the following procedure
(assume that total supply exceeds total demand)).
Step 1: If necessary, add a dummy demand point (with a supply of 0 and a demand equal to the problem’s excess
supply) to balance the problem. Shipments to the dummy and from a point to itself will, of course, have a
zero shipping cost. Let 𝑠 = total available supply.
Step 2: Construct a transportation tableau as follows: A row in the tableau will be needed for each supply point
and transshipment point, and a column will be needed for each demand point and transshipment point.
Each supply point will have a supply equal to its original supply, and each demand point will have a
demand equal to its original demand. Each transshipment point will have a supply equal to (point’s
original supply) +𝑠 and a demand equal to (point’s original demand) +𝑠 . This ensures that any
transshipment point that is a net supplier will have a net outflow equal to the point’s original supply, and,
similarly, a net demander will have a net inflow equal to the point’s original demand. Although it is
unknown how many will be sent through each transshipment point, it is certain that the total amount will
not exceed 𝑠 . This explains why it is added to supply and demand at every point of delivery of goods. By
adding the same amount to supply and demand, it is ensured that the net outflow at each transshipment
point will be correct, and that transport balance is also maintained.

82
Example: Manual solution of transshipping (3)
Because 𝑠 = (total supply) 150 + 200 = 350 and (total demand)
130 + 130 = 260, the dummy demand point has a demand of
350 − 260 = 90. The other supplies and demands in the
transportation tableau are obtained by adding 𝑠 = 350 to each
transshipment point’s supply and demand.

83
 Example: Manual solution of transshipping (4)
NORTH WEST CORNER LEAST COST
New York Chicago Los Angeles Boston Dummy
New York Chicago Los Angeles Boston Dummy
8 13 25 28 0
8 13 25 28 0
Mempis
Mempis
150 150
60 90 150
15 12 26 25 0
15 12 26 25 0
Denver
Denver 70 130 200
200 200
0 6 16 17 0
0 6 16 17 0 Start
New York
New York 350 0 350
0 350 350
6 0 14 16 0
6 0 14 16 0 Chichago
Chichago 350 0 350
0 130 130 90 350
350 350 130 130 90
350 350 130 130 90

New York Chicago Los Angeles Boston Dummy New York Chicago Los Angeles Boston Dummy
8 13 25 28 0 8 13 25 28 0
Mempis Mempis
150 150 130 20 150
15 12 26 25 0 15 12 26 25 0
Denver Denver
200 0 200 90 110 200

0 6 16 17 0 0 6 16 17 0
Start
New York New York
350 0 350 350 350

6 0 14 16 0 6 0 14 16 0
Chichago Chichago
130 130 90 350 0 260 90 350

350 350 130 130 90 350 350 130 130 90

84
 Example: Manual solution of transshipping (5)
New York Chicago Los Angeles Boston Dummy New York Chicago Los Angeles Boston Dummy
8 13 25 28 0 u1= 0 8 13 25 28 0 u1= 0
Mempis Mempis
20 5 130 7 -8 150 0 1 130 3 20 150
15 12 26 25 0 u2= 4 15 12 26 25 0 u2= 0
Denver Denver
3 70 -3 130 -12 200 7 0 1 130 70 200
0 6 16 17 0 u3= -8 0 6 16 17 0 u3= -8
New York New York
330 6 -1 4 20 350 350 2 -1 0 8 350
6 0 14 16 0 u4= -8 6 0 14 16 0 u4= -12
Chichago Chichago
6 280 -3 3 70 350 10 350 1 3 12 350

350 350 130 130 90 350 350 130 130 90

v1= 8 v2= 8 v3= 25 v4= 21 v5= 8 v1= 8 v2= 12 v3= 25 v4= 25 v5= 0
TC = 7500 TC = 6500

New York Chicago Los Angeles Boston Dummy

New York Chicago Los Angeles Boston Dummy
8 13 25 28 0
8 13 25 28 0 u1= 0 Mempis
Mempis 130 1 0 3 20 150
20 -7 130 -5 -8 150
15 12 26 25 0 u2= -8 15 12 26 25 0
Denver Denver
15 0 9 130 70 200 7 0 1 130 70 200
0 6 16 17 0 u3= -8 0 6 16 17 0
New York New York
330 -6 -1 -8 20 350 220 2 130 0 8 350
6 0 14 16 0 u4= -20 6 0 14 16 0
Chichago Chichago
18 350 9 3 12 350 10 350 1 3 12 350

350 350 130 130 90 350 350 130 130 90

v1= 8 v2= 20 v3= 25 v4= 33 v5= 8 v1= 8 v2= 12 v3= 25 v4= 25 v5= 0
TC = 6660 TC = 6370

85
Example: Manual solution of transshipping (6)
Objective Cell (Min)
Cell Name Original Value Final Value
$E$20 Total cost = >= 0 6370

Variable Cells
Cell Name Original Value Final Value Integer
$E$12 Mempis Mempis 0 130 Contin
$F$12 Mempis Denver 0 0 Contin
$G$12 Mempis New York 0 0 Contin
$H$12 Mempis Chichago 0 0 Contin
$I$12 Mempis Dummy 0 20 Contin
$E$13 Denver Mempis 0 0 Contin
$F$13 Denver Denver 0 0 Contin
$G$13 Denver New York 0 0 Contin
$H$13 Denver Chichago 0 130 Contin
$I$13 Denver Dummy 0 70 Contin
$E$14 New York Mempis 0 220 Contin
$F$14 New York Denver 0 0 Contin
$G$14 New York New York 0 130 Contin
$H$14 New York Chichago 0 0 Contin
$I$14 New York Dummy 0 0 Contin
$E$15 Chichago Mempis 0 0 Contin
$F$15 Chichago Denver 0 350 Contin
$G$15 Chichago New York 0 0 Contin
$H$15 Chichago Chichago 0 0 Contin
$I$15 Chichago Dummy 0 0 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$E$16 Mempis 350 $E$16>=$E$18 Binding 0
$F$16 Denver 350 $F$16>=$F$18 Binding 0
$G$16 New York 130 $G$16>=$G$18 Binding 0
$H$16 Chichago 130 $H$16>=$H$18 Binding 0
$I$16 Dummy 90 $I$16>=$I$18 Binding 0
$J$12 Mempis 150 $J$12<=$L$12 Binding 0
$J$13 Denver 200 $J$13<=$L$13 Binding 0
$J$14 New York 350 $J$14<=$L$14 Binding 0
$J$15 Chichago 350 $J$15<=$L$15 Binding 0

86
Example: Manual solution of transshipping (7)
Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$E$12 Mempis Mempis 130 0 8 1 0
$F$12 Mempis Denver 0 1 13 1E+30 1 Objective
$G$12 Mempis New York 0 1 25 1E+30 1 Cell Name Value
$H$12 Mempis Chichago 0 3 28 1E+30 3 $E$20 Total cost = >= 6370
$I$12 Mempis Dummy 20 0 0 0 0
$E$13 Denver Mempis 0 7 15 1E+30 7
$F$13 Denver Denver 0 0 12 1 2
Variable Lower Objective Upper Objective
$G$13 Denver New York 0 2 26 1E+30 2
Cell Name Value Limit Result Limit Result
$H$13 Denver Chichago 130 0 25 0 25
$E$12 Mempis Mempis 130 130 6370 130 6370
$I$13 Denver Dummy 70 0 0 0 0
$E$14 New York Mempis 220 0 0 0 1 $F$12 Mempis Denver 0 0 6370 0 6370
$F$14 New York Denver 0 2 6 1E+30 2 $G$12 Mempis New York 0 0 6370 0 6370
$G$14 New York New York 130 0 16 1 24 $H$12 Mempis Chichago 0 0 6370 0 6370
$H$14 New York Chichago 0 0 17 1E+30 0 $I$12 Mempis Dummy 20 20 6370 20 6370
$I$14 New York Dummy 0 8 0 1E+30 8 $E$13 Denver Mempis 0 0 6370 0 6370
$E$15 Chichago Mempis 0 10 6 1E+30 10 $F$13 Denver Denver 0 0 6370 0 6370
$F$15 Chichago Denver 350 0 0 2 1E+30 $G$13 Denver New York 0 0 6370 0 6370
$G$15 Chichago New York 0 2 14 1E+30 2 $H$13 Denver Chichago 130 130 6370 130 6370
$H$15 Chichago Chichago 0 3 16 1E+30 3 $I$13 Denver Dummy 70 70 6370 70 6370
$I$15 Chichago Dummy 0 12 0 1E+30 12 $E$14 New York Mempis 220 220 6370 220 6370
$F$14 New York Denver 0 0 6370 0 6370
Constraints
$G$14 New York New York 130 130 6370 130 6370
Final Shadow Constraint Allowable Allowable
$H$14 New York Chichago 0 0 6370 0 6370
Cell Name Value Price R.H. Side Increase Decrease
$I$14 New York Dummy 0 0 6370 0 6370
$E$16 Mempis 350 8 350 0 130
$E$15 Chichago Mempis 0 0 6370 0 6370
$F$16 Denver 350 12 350 0 0
$G$16 New York 130 24 130 0 130 $F$15 Chichago Denver 350 350 6370 350 6370
$H$16 Chichago 130 25 130 0 20 $G$15 Chichago New York 0 0 6370 0 6370
$I$16 Dummy 90 0 90 0 20 $H$15 Chichago Chichago 0 0 6370 0 6370
$J$12 Mempis 150 0 150 1E+30 0 $I$15 Chichago Dummy 0 0 6370 0 6370
$J$13 Denver 200 0 200 20 0
$J$14 New York 350 -8 350 130 0
$J$15 Chichago 350 -12 350 0 0

87
Thank You.

88