C h a p t e r 9

Transportation Problem
“We want these assets to be productive. We buy them. We own them. To say we care only
about the short term is wrong. What I care about is seeing these assets in the best hands.”
– Carl Icahn

PREVIEW
The structure of transportation problem involves a large number of shipping routes from several supply
centres to several demand centres. The objective is to determine the number of units of an item (commodity
or product) that should be shipped from an origin to a destination in order to satisfy the required quantity
of goods or services at each destination centre.

LEARNING OBJECTIVES

After studying this chapter, you should be able to

z recognize and formulate a transportation problem involving a large number of shipping routes.
z drive initial feasible solution using several methods.
z drive optimal solution by using Modified Distribution Method.
z handle the problem of degenerate and unbalanced transportation problem.
z examine multiple optimal solutions, and prohibited routes in the transportation problem.
z construct the initial transportation table for a trans-shipment problem.
z solve a profit maximization transportation problem using suitable changes in the transportation algorithm.

CHAPTER OUTLINE
9.1 Introduction 9.6 Variations in Transportation Problem
9.2 Mathematical Model of Transportation Problem 9.7 Maximization Transportation Problem
9.3 The Transportation Algorithm 9.8 Trans-shipment Problem
9.4 Methods of Finding Initial Solution • Conceptual Questions C
• Conceptual Questions A • Self Practice Problems C
• Self Practice Problems A • Hints and Answers
• Hints and Answers ‰ Chapter Summary
9.5 Test for Optimality ‰ Chapter Concepts Quiz
• Conceptual Questions B ‰ Case Study
• Self Practice Problems B ‰ Appendix: Theorem and Results
• Hints and Answers
 Transportation Problem 257

9.1 INTRODUCTION
One important application of linear programming is in the area of physical distribution (transportation) of
goods and services from several supply centres to several demand centres. A transportation problem when
expressed in terms of an LP model can also be solved by the simplex method. However a transportation
problem involves a large number of variables and constraints, solving it using simplex methods takes a
long time. Two transportation algorithms, namely Stepping Stone Method and the MODI (modified
distribution) Method have been developed for solving a transportation problem.
The structure of transportation problem involves a large number of shipping routes from several supply
centres to several demand centres. Thus, objective is to determine shipping routes between supply centres
and demand centres in order to satisfy the required quantity of goods or services at each destination centre,
with available quantity of goods or services at each supply centre at the minimum transportation cost and/
or time.
The transportation algorithms help to minimize the total cost of transporting a homogeneous The study of
commodity (product) from supply centres to demand centres. However, it can also be applied to the transportation
maximization of total value or utility. problem helps to
There are various types of transportation models and the simplest of them was first presented by identify optimal
transportation routes
F L Hitchcock (1941). It was further developed by T C Koopmans (1949) and G B Dantzig (1951). Several along with units of
extensions of transportation models and methods have been subsequently developed. commodity to be
shipped in order to
minimize total
9.2 MATHEMATICAL MODEL OF TRANSPORTATION PROBLEM transportation cost.

Let us consider Example 9.1 to illustrate the mathematical model formulation of transportation problem of
transporting a single commodity from three sources of supply to four demand destinations. The sources
of supply are production facilities, warehouses, or supply centres, each having certain amount of
commodity to supply. The destinations are consumption facilities, warehouses or demand centres each
having certain amount of requirement (or demand) of the commodity.

Example 9.1 A company has three production facilities S1, S2 and S3 with production capacity of 7,
9 and 18 units (in 100s) per week of a product, respectively. These units are to be shipped to four
warehouses D1, D2, D3 and D4 with requirement of 5, 6, 7 and 14 units (in 100s) per week, respectively.
The transportation costs (in rupees) per unit between factories to warehouses are given in the table below:

D1 D2 D3 D4 Supply
(Availability)

S1 19 30 50 10 7

S2 70 30 40 60 9

S3 40 8 70 20 18

Demand 5 8 7 14 34
(Requirement)

Formulate this transportation problem as an LP model to minimize the total transportation cost.
Model formulation Let xij = number of units of the product to be transported from a production facility
i (i = 1, 2, 3) to a warehouse j ( j = 1, 2, 3, 4)
The transportation problem is stated as an LP model as follows:
Minimize (total transportation cost) Z = 19x11 + 30x12 + 50x13 + 10x14 + 70x21 + 30x22 + 40x23
+ 60x24 + 40x31 + 8x32 + 70x33 + 20x34
subject to the constraints
x11 + x12 + x13 + x14 = 17 
x21 + x22 + x23 + x24 = 19  (Supply)
x31 + x32 + x33 + x34 = 18 
258 Operations Research: Theory and Applications

x11 + x21 + x31 = 15

x12 + x22 + x32 = 18

 (Demand)
x13 + x23 + x33 = 17
x14 + x24 + x34 = 14
and xij ≥ 0 for i = 1, 2, 3 and j = 1, 2, 3, and 4.
In the above LP model, there are m × n = 3 × 4 = 12 decision variables, xij and m + n = 7 constraints,
where m are the number of rows and n are the number of columns in a general transportation table.

9.2.1 General Mathematical Model of Transportation Problem

Let there be m sources of supply, S1, S2, . . ., Sm having ai (i = 1, 2, . . ., m) units of supply (or
capacity), respectively to be transported to n destinations, D1 , D2 , . . ., D n with b j ( j = 1, 2, . . ., n)
units of demand (or requirement), respectively. Let cij be the cost of shipping one unit of the
commodity from source i to destination j. If x ij represents number of units shipped from source i to
destination j, the problem is to determine the transportation schedule so as to minimize the total
transportation cost while satisfying the supply and demand conditions. Mathematically, the
transportation problem, in general, may be stated as follows:
m n
Minimize (total cost) Z = Σ Σ cij xij (1)
i =1 j =1

subject to the constraints

n
Σ xij = ai , i = 1, 2, . . ., m (supply constraints) (2)
j =1
m
Σ xij = b j , j = 1, 2, . . ., n (demand constraints) (3)
i =1

and xij ≥ 0 for all i and j. (4)

For easy presentation and solution, a transportation problem data is generally presented as shown
in Table 9.1.
Transportation
table is a Existence of feasible solution A necessary and sufficient condition for a feasible solution to the
convenient way to transportation problems is:
summarize data.
Total supply = Total demand
m n
Σ ai = Σ b j (also called rim conditions)
i =1 j =1
For proof, see Appendix at the end of this chapter.

To D1 D2 ... Dn Supply
From ai
c11 c12 ... c1n
S1 x11 x12 x1n a1

c21 c22 ... c2n

S2 x21 x22 x2n a2

.. .. .. .. ..
. . . . .
cm1 cm2 ... cmn
Sm xm1 xm2 xmn am
Table 9.1
General
m n
Transportation Demand b1 b2 ... bn Σ ai = Σ b j
Table. bj i =1 j =1
 Transportation Problem 259

In this problem, there are (m + n) constraints, one for each source of supply, and distinction and
m × n variables. Since all (m + n) constraints are equations, therefore, one of these equations is extra
(redundant). The extra constraint (equation) can be derived from the other constraints (equations), without
affecting the feasible solution. It follows that any feasible solution for a transportation problem must have
exactly (m + n – 1) non-negative basic variables (or allocations) xij satisfying the rim conditions.
Remarks 1. When the total supply is equal to the total demand, the problem is called a balanced
transportation problem, otherwise it is called an unbalanced transportation problem. The unbalanced
transportation problem can be made balanced by adding a dummy supply centre (row) or a dummy
demand centre (column) as the need arises.
2. When the number of positive allocations (values of decision variables) at any stage of the feasible When total demand
solution is less than the required number (rows + columns – 1), i.e. number of independent constraint equals total supply,
equations, the solution is said to be degenerate, otherwise non-degenerate. For proof, see Appendix the transportation
at the end of this chapter. problem is said to
be balanced.
3. Cells in the transportation table having positive allocation, i.e., xij > 0 are called occupied cells,
otherwise are known as non-occupied (or empty) cells.

9.3 THE TRANSPORTATION ALGORITHM

The algorithm for solving a transportation problem may be summarized into the following steps:
Step 1: Formulate the problem and arrange the data in the matrix form The formulation
of the transportation problem is similar to the LP problem formulation. In transportation problem, the
objective function is the total transportation cost and the constraints are the amount of supply and demand
available at each source and destination, respectively.
Step 2: Obtain an initial basic feasible solution In this chapter, following three different methods
are discussed to obtain an initial solution:
• North-West Corner Method,
• Least Cost Method, and
• Vogel’s Approximation (or Penalty) Method.
The initial solution obtained by any of the three methods must satisfy the following conditions:
(i) The solution must be feasible, i.e. it must satisfy all the supply and demand constraints (also called
rim conditions).
(ii) The number of positive allocations must be equal to m + n – 1, where m is the number of rows
and n is the number of columns.
Any solution that satisfies the above conditions is called non-degenerate basic feasible solution,
otherwise, degenerate solution.
Step 3: Test the initial solution for optimality In this chapter, the Modified Distribution (MODI)
method is discussed to test the optimality of the solution obtained in Step 2. If the current solution is
optimal, then stop. Otherwise, determine a new improved solution.
Step 4: Updating the solution Repeat Step 3 until an optimal solution is reached.

9.4 METHODS OF FINDING INITIAL SOLUTION

There are several methods available to obtain an initial basic feasible solution. In this chapter, we shall
discuss only following three methods:

9.4.1 North-West Corner Method (NWCM)

This method does not take into account the cost of transportation on any route of transportation. The
method can be summarized as follows:
Step 1: Start with the cell at the upper left (north-west) corner of the transportation table (or matrix) and
allocate commodity equal to the minimum of the rim values for the first row and first column, i.e. min (a1, b1).
260 Operations Research: Theory and Applications

Step 2: (a) If allocation made in Step 1 is equal to the supply available at first source (a1, in first row),
then move vertically down to the cell (2, 1), i.e., second row and first column. Apply Step 1 again, for next
allocation.
(b) If allocation made in Step 1 is equal to the demand of the first destination (b1 in first column),
then move horizontally to the cell (1, 2), i.e., first row and second column. Apply Step 1 again for next
allocation.
(c) If a1 = b1, allocate x11 = a1 or b1 and move diagonally to the cell (2, 2).
Step 3: Continue the procedure step by step till an allocation is made in the south-east corner cell of
the transportation table.
Remark If during the process of making allocation at a particular cell, the supply equals demand, then
the next allocation of magnitude zero can be made in a cell either in the next row or column. This condition
is known as degeneracy.
Example 9.2 Use North-West Corner Method (NWCM) to find an initial basic feasible solution to the
transportation problem using data of Example 9.1
Solution The cell (S1, D1) is the north-west corner cell in the given transportation table. The rim values
for row S1 and column D1 are compared. The smaller of the two, i.e. 5, is assigned as the first allocation;
otherwise it will violate the feasibility condition. This means that 5 units of a commodity are to be
transported from source S1 to destination D1. However, this allocation leaves a supply of 7 – 5 = 2 units
of commodity at S1.
Move horizontally and allocate as much as possible to cell (S1, D2). The rim value for row S1 is 2 and
for column D2 is 8. The smaller of the two, i.e. 2, is placed in the cell. Proceeding to row S2, since the demand
of D1 is fullfilled. The unfulfilled demand of D2 is now 8 – 2 = 6 units. This can be fulfilled by S2 with
capacity of 9 units. So 6 units are allocated to cell (S2, D2). The demand of D2 is now satisfied and a balance
of 9 – 6 = 3 units remains with S2.

D1 D2 D3 D4 Supply

19 30 50 10
S1 5 2 7

70 30 40 60
S2 6 3 9

40 8 70 20
S3 4 14 18
Table 9.2
Initial Solution
using NWCM Demand 5 8 7 14 34

Continue to move horizontally and vertically in the same manner to make desired allocations. Once the
procedure is over, count the number of positive allocations. These allocations (occupied cells) should be
equal to m + n – l = 3 + 4 – l = 6. If yes, then solution is non-degenerate feasible solution. Otherwise
degenerate solution.
The total transportation cost of the initial solution is obtained by multiplying the quantity xij in the
occupied cells with the corresponding unit cost cij and adding all the values together. Thus, the total
transportation cost of this solution is
Total cost = 5 × 19 + 2 × 30 + 6 × 30 + 3 × 40 + 4 × 70 + 14 × 20 = Rs 1,015

9.4.2 Least Cost Method (LCM)

Since the main objective is to minimize the total transportation cost, transport as much as
possible through those routes (cells) where the unit transportation cost is lowest. This method takes into
account the minimum unit cost of transportation for obtaining the initial solution and can be summarized
as follows:
 Transportation Problem 261

Step 1: Select the cell with the lowest unit cost in the entire transportation table and allocate as much
as possible to this cell. Then eliminate (line out) that row or column in which either the supply or demand
is fulfilled. If a row and a column are both satisfied simultaneously, then crossed off either a row or a column.
In case the smallest unit cost cell is not unique, then select the cell where the maximum allocation can
be made.
Step 2: After adjusting the supply and demand for all uncrossed rows and columns repeat the procedure
to select a cell with the next lowest unit cost among the remaining rows and columns of the transportation
table and allocate as much as possible to this cell. Then crossed off that row and column in which either
supply or demand is exhausted.
Step 3: Repeat the procedure until the available supply at various sources and demand at various
destinations is satisfied. The solution so obtained need not be non-degenerate.
Example 9.3 Use Least Cost Method (LCM) to find initial basic feasible solution to the transportation
problem using data of Example 9.1.
Solution The cell with lowest unit cost (i.e., 8) is (S3, D2). The maximum units which can be allocated
to this cell is 8. This meets the complete demand of D2 and leave l0 units with S3, as shown in Table 9.3.
In the reduced table without column D2, the next smallest unit transportation cost, is 10 in cell
(S1, D4). The maximum which can be allocated to this cell is 7. This exhausts the capacity of S1 and
leaves 7 units with D4 as unsatisfied demand. This is shown in Table 9.3.

D1 D2 D3 D4 Supply

19 30 50 10
S1 7
7
70 30 40 60
S2 9

40 8 70 20
S3 18
8

Demand 5 8 7 14 34 Table 9.3

In Table 9.3, the next smallest cost is 20 in cell (S3, D4). The maximum units that can be allocated to
this cell is 7 units. This satisfies the entire demand of D4 and leaves 3 units with S3, as the remaining supply,
shown in Table 9.4.
In Table 9.4, the next smallest unit cost cell is not unique. That is, there are two cells – (S2, D3) and (S3,
D1) – that have the same unit transportation cost of 40. Allocate 7 units in cell (S2, D3) first because it can
accommodate more units as compared to cell (S3, D1). Then allocate 3 units (only supply left with S3) to cell
(S3, D1). The remaining demand of 2 units of D1 is fulfilled from S2. Since supply and demand at each supply
centre and demand centre is exhausted, the initial solution is arrived at, and is shown in Table 9.4.

D1 D2 D3 D4 Supply

19 30 50 10
S1 7
7
70 30 40 60
S2 9
2 7
40 8 70 20
S3 18
3 8 7

Demand 5 8 7 14 34 Table 9.4

The total transportation cost of the initial solution by LCM is calculated as given below:
Total cost = 7 × 10 + 2 × 70 + 7 × 40 + 3 × 40 + 8 × 8 + 7 × 20 = Rs 814
The total transportation cost obtained by LCM is less than the cost obtained by NWCM.
262 Operations Research: Theory and Applications

9.4.3 Vogel’s Approximation Method (VAM)

Vogel’s approximation (penalty or regret) is preferred over NWCR and LCM methods. In this method, an
allocation is made on the basis of the opportunity (or penalty or extra) cost that would have been incurred
if the allocation in certain cells with minimum unit transportation cost were missed. Hence, allocations are
made in such a way that the penalty cost is minimized. An initial solution obtained by using this method
is nearer to an optimal solution or is the optimal solution itself. The steps of VAM are as follows:
Step 1: Calculate the penalties for each row (column) by taking the difference between the smallest and
next smallest unit transportation cost in the same row (column). This difference indicates the penalty or
extra cost that has to be paid if decision-maker fails to allocate to the cell with the minimum unit
transportation cost.
Step 2: Select the row or column with the largest penalty and allocate as much as possible in the cell
that has the least cost in the selected row or column and satisfies the rim conditions. If there is a tie in
the values of penalties, it can be broken by selecting the cell where the maximum allocation can be made.
Step 3: 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 them is crossed out and the remaining row (column) is assigned
a zero supply (demand). Any row or column with zero supply or demand should not be used in computing
future penalties.
Step 4: Repeat Steps 1 to 3 until the available supply at various sources and demand at various
destinations is satisfied.
Example 9.4 Use Vagel’s Approximation Method (VAM) to find the initial basic feasible solution to
the transportation problem using the data of Example 9.1.
Solution The differences (penalty costs) for each row and column have been calculated as shown in Table
9.5. In the first round, the maximum penalty, 22 occurs in column D2. Thus the cell (S3, D2) having the least
transportation cost is chosen for allocation. The maximum possible allocation in this cell is 8 units and it
satisfies demand in column D2. Adjust the supply of S3 from 18 to 10 (18 – 8 = 10).

D1 D2 D3 D4 Supply Row differences

S1 19 30 50 10 7 9 9 40 40
5 2

S2 70 30 40 60 9 10 20 20 20
7 2
S3 40 8 70 20 18 12 20 50 –
8 10

Demand 5 8 7 14 34

Column 21 22 10 10
Table 9.5 differences 21 – 10 10
Initial Solution – – 10 10
Using VAM – – 10 50

The new row and column penalties are calculated except column D2 because D2’s demand has been
satisfied. In the second round, the largest penalty, 21 appears at column D1. Thus the cell (S1, D1) having
the least transportation cost is chosen for allocating 5 units as shown in Table 9.5. After adjusting the
supply and demand in the table, we move to the third round of penalty calculations.
In the third round, the maximum penalty 50 appears at row S3. The maximum possible allocation of 10
units is made in cell (S3, D4) that has the least transportation cost of 20 as shown in Table 9.5.
The process is continued with new allocations till a complete solution is obtained. The initial solution
using VAM is shown in Table 9.5. The total transportation cost associated with this method is:
Total cost = 5 × 19 + 2 × 10 + 7 × 40 + 2 × 60 + 8 × 8 + 10 × 20 = Rs 779
 Transportation Problem 263

Example 9.5 A dairy firm has three plants located in a state. The daily milk production at each plant
is as follows:
Plant 1 : 6 million litres, Plant 2 : 1 million litres, and Plant 3 : 10 million litres
Each day, the firm must fulfil the needs of its four distribution centres. The minimum requirement of each
centre is as follows:
Distribution centre 1 : 7 million litres, Distribution centre 2 : 5 million litres,
Distribution centre 3 : 3 million litres, and Distribution centre 4 : 2 million litres
Cost (in hundreds of rupees) of shipping one million litre from each plant to each distribution centre is given
in the following table:

Distribution Centre
D1 D2 D3 D4

P1 2 3 11 7
Plant P2 1 0 6 1
P3 5 8 15 9

Find the initial basic feasible solution for given problem by using following methods:
(a) North-west corner rule
(b) Least cost method
(c) Vogel’s approximation method

Solution (a) North-West Corner Rule

Distribution Centre

D1 D2 D3 D4 Supply

2 3 11 7
P1 6 = a1
6

1 0 6 1
Plant P2 1 = a2
1

5 8 15 9
P3 10 = a3 Table 9.6
5 3 2
Initial Solution by
NWCR
Demand 7 = b1 5 = b2 3 = b3 2 = b4

(i) Comparing a1 and b1, since a1 < b1; allocate x11 = 6. This exhausts the supply at P1 and leaves
1 unit as unsatisfied demand at D1.
(ii) Move to cell (P2, D1). Compare a2 and b1 (i.e. 1 and 1). Since a2 = b1, allocate x21 = 1.
(iii) Move to cell (P3, D2). Since supply at P3, is equal to the demand at D2, D3 and D4, therefore,
allocate x32 = 5, x33 = 3 and x34 = 2.
It may be noted that the number of allocated cells (also called basic cells) are 5 which is one less than
the required number m + n – 1 (3 + 4 – 1 = 6). Thus, this solution is the degenerate solution. The
transportation cost associated with this solution is:
Total cost = Rs (2 × 6 + l × l + 8 × 5 + 15 × 3 + 9 × 2) × 100 = Rs 11,600
264 Operations Research: Theory and Applications

(b) Least Cost Method

Distribution Centre

D1 D2 D3 D4 Supply

2 3 11 7
P1 6
6

1 0 6 1
Plant P2 1
1
Table 9.7
Initial Solution by 5 8 15 9
P3 10
LCM 1 4 3 2

Demand 7 5 3 2

(i) The lowest unit cost in Table 9.7 is 0 in cell (P2, D2), therefore the maximum possible allocation that
can be made is 1 unit. Since this allocation exhausts the supply at plant P2, therefore row 2 is crossed
off.
(ii) The next lowest unit cost is 2 in cell (P1, D1). The maximum possible allocation that can be made
is 6 units. This exhausts the supply at plant P1, therefore, row P1 is crossed off.
(iii) Since the total supply at plant P3 is now equal to the unsatisfied demand at all the four distribution
centres, therefore, the maximum possible allocations satisfying the supply and demand conditions,
are made in cells (P3, D1), (P3, D2), (P3, D3) and (P3, D4).
The number of allocated cells in this case are six, which is equal to the required number
m + n – 1 (3 + 4 – 1 = 6). Thus, this solution is non-degenerate. The transportation cost associated with
this solution is
Total cost = Rs (2 × 6 + 5 × l + 8 × 4 + 15 × 3 + 9 × 2) × 100 = Rs 11,200
(c) Vogel’s Approximation Method: First calculating penalties as per rules and then allocations are made
in accordance of penalties as shown in Table 9.8.

D1 D2 D3 D4 Supply Row penalty

2 3 11 7 6 1 1 5
P1
1 5
1 0 6 1 1 0 – –
Plant P2
1
5 8 15 9 10 3 3 4
P3
6 3 1

Demand 7 5 3 2
Column penalty 1 3 5 6
Table 9.8 3 5 4 2
Initial Solution by 3 – 4 2
VAM Distribution Centre

The number of allocated cells in Table 9.8 are six, which is equal to the required number
m + n – 1 (3 + 4 – 1 = 6), therefore, this solution is non-degenerate. The transportation cost associated
with this solution is:
Total cost = Rs (2 × 1 + 3 × 5 + 1 × 1 + 5 × 6 + 15 × 3 + 9 × 1) × 100 = Rs 10,200
Remark: Total transportation cost found by VAM is lower than the costs of transportation determined
by the NWCR and LCM methods. Therefore, it is of advantage to use this method in order to reduce
computational time required to obtain optimum solution.
 Transportation Problem 265

CONCEPTUAL QUESTIONS A

1. Show that all the bases for a transportation problem are 8. What is meant by the triangular form of a system of linear
triangular. equations? When does a system of linear equations have a
2. With reference to a transportation problem define the following triangular basis? (See Appendix for proof.)
terms: 9. What is meant by non-degenerate basic feasible solution of a
ii(i) Feasible solution v(ii) Basic feasible solution transportation problem?
(iii) Optimal solution 10. Explain in brief three, methods of initial feasible solution for
(iv) Non-degenerate basic feasible solution transportation problem.
3. Given a mathematical formulation of the transportation problem 11. Explain the various steps involved in solving transportation
and the simplex methods, what are the differences in the nature problem using (i) Least cost method, and (ii) Vogel’s
of problems that can be solved by using these methods? approximation method.
4. Prove that there are only m + n – 1 independent equations in 12. Explain the (i) North-West Corner method, (ii) Least-Cost method,
a transportation problem, m and n being the number of origins and (iii) Vogel’s Approximation method, for obtaining an initial
and destination, and only one equation can be dropped as being basic feasible solution of a transportation problem.
redundant. (For proof see Appendix).
13. State the transportation problem. Describe clearly the steps
5. Describe the transportation problem with its general mathematical
involved in solving it.
formulation.
14. Is the transportation model an example of decision-making
6. Show that a transportation problem is a special type of LP under certainty or under uncertainty? Why?
problem. In what areas of management can the transportation
model be effectively used? Discuss. 15. Why does Vogel’s approximation method provide a good initial
feasible solution? Can the North-West Corner method ever be
7. What are the characteristics of transportation problem of linear able to provide an initial solution with a cost as low as this?
programming?

SELF PRACTICE PROBLEMS A

1. Determine an initial basic feasible solution to the following 3. Determine an initial basic feasible solution to the following
transportation problem by using (a) NWCR, (b) LCM and (c) transportation problem by using (a) NWCM, (b) LCM, and (c)
VAM. VAM.
Destination Destination

D1 D2 D3 D4 Supply D1 D2 D3 D4 Supply

S1 21 16 15 3 11 A 11 13 17 14 250
Source S2 17 18 14 23 13 Source B 16 18 14 10 300
S3 32 27 18 41 19 C 21 24 13 10 400

Demand 6 6 8 23 Demand 200 225 275 250

2. Determine an initial basic feasible solution to the following 4. Determine an initial basic feasible solution to the following
transportation problem by using (a) the least cost method, and transportation problem by using the North-West corner rule,
(b) Vogel’s approximation method. where O i and Dj represent ith origin and jth destination,
respectively.
Destination
Destination

D1 D2 D3 D4 Supply D1 D2 D3 D4 Supply
S1 1 2 1 4 30 O1 6 4 1 5 14
Source S2 3 3 2 1 30 Source O2 8 9 2 7 16
S3 4 2 5 9 40 O3 4 3 6 2 5

Demand 20 40 30 10 Demand 6 10 15 4

HINTS AND ANSWERS

1. x14 = 11, x21 = 6, x22 = 3, x24 = 4, x32 = 3, x33 = 4, x34 = 12; Total cost = 686.
2. (a) and (b): x11 = 20, x13 = 10, x22 = 20, x33 = 20, x24 = 10, x32 = 20; Total cost = 180.
3. (a) x11 = 200, x12 = 50, x22 = 175, x23 = 125, x33 = 150, x34 = 250; Total cost = 12,200.
(b) x11 = 200, x12 = 50, x22 = 175, x23 = 125, x33 = 150, x34 = 250; Total cost = 12,200.
(c) x11 = 200, x12 = 50, x22 = 175, x24 = 125, x33 = 275, x34 = 125; Total cost = 12,075.
4. x11 = 6; x12 = 8; x22 = 2; x23 = 14; x33 = 1; x34 = 4 ; Total cost = Rs 128.
266 Operations Research: Theory and Applications

9.5 TEST FOR OPTIMALITY

Once an initial solution is obtained, the next step is to check its optimality in terms of feasibility of the solution
and total minimum transportation cost.
The test of optimality begins by calculating an opportunity cost associated with each unoccupied cell
(represents unused route) in the transportation table. An unoccupied cell with the largest negative
opportunity cost is selected to include in the new set of transportation routes (allocations). This value
indicates the per unit cost reduction that can be achieved by making appropriate allocation in the
unoccupied cell. This cell is also known as an incoming cell (or variable). The outgoing cell (or variable)
The negative from the current solution is the occupied cell (basic variable) where allocation will become zero as allocation
opportunity cost is made in the unoccupied cell with the largest negative opportunity cost. Such an exchange reduces the
indicates the per
unit cost reduction
total transportation cost. The process is continued until there is no negative opportunity cost. That is, the
that can be current solution is an optimal solution.
achieved by raising The Modified-distribution (MODI) method (also called u-v method or method of multipliers) is used
the shipment to calculate opportunity cost associated with each unoccupied cell and then improving the current solution
allocation in the
unoccupied cell from
leading to an optimal solution. The steps of MODI method based on the concept of duality are summarized
its present level of in section 9.5.3.
zero.
9.5.1 Dual of Transportation Model
For a given basic feasible solution if we associate numbers (also called dual variables or multipliers) ui
and vj with row i (i = 1, 2, . . ., m) and column j ( j = 1, 2, . . ., n) of the transportation table, respectively,
then ui and vj must satisfy the equation
ui + vj = cij , for each occupied cell (i, j)
These equations yield m + n – 1 equations in m + n unknown dual variables. The values of these
variables can be determined by arbitrarily assigning a zero value to any one of these variables. The value
of the remaining m + n – 2 variables can then be obtained algebraically by using the above equation for
the occupied cells. The opportunity cost of each unoccupied cell (called non-basic variable or unused
route) is calculated by using following equation that involves ui and vj values.:
drs = crs – (ur + vs ) , for each unoccupied cell (r, s)
This equation also indicates the per unit reduction in the total transportation cost for the route (r, s). To
prove these two results, consider the general transportation model:
m n
Minimize Z = Σ Σ cij xij
i =1 j =1

subject to the constraints

n
Σ xij = ai , i = 1, 2, . . ., m (Supply)
j =1
Modi method helps m
in comparing the Σ xij = bj , j = 1, 2, . . ., n (Demand)
relative advantage i =1
of alternative
allocations for all the
and xij ≥ 0 for all i and j
unoccupied cells Since all of the constraints are equalities, write each equality constraint equivalent to two inequalities
simultaneously.
as follows:
n 
Σ xij ≥ a , i = 1, 2, . . ., m 
j =1 i
 (Supply constraints)
n 
Σ – (xij) ≥ – ai 
j =1
m
Σ xij ≥ bj , 
j = 1, 2, . . ., m
i =1 

m  (Demand constraints)
Σ – (xij) ≥ – bj 
i =1

Let ui+ and ui be the dual variables, one for each supply constraint i. Similarly v j+ , v j− be the dual
−

variables one for each demand constraint j. Then, the dual of the transportation model can be written as:
 Transportation Problem 267

m n
Maximize Z * = Σ ( ui+ − ui− ) a i + Σ ( vj + − vj− ) bj
i =1 j =1
subject to the constraints
( u i+ − u i− ) + ( vj + − vj − ) ≤ cij
and u i+ , u i− , vj + , vj − ≥ 0 , for all i and j.
The variables ui+
and ui−
that appear in the objective function, may take positive, negative or zero
values. Thus, either of these will appear in the optimal basic feasible solution because one is the negative
of the other. The same argument may be given for vj+ and vj −. Thus, let
ui = ui+ − ui− , i = 1, 2, . . ., m
vj = vj + − vj − , j = 1, 2, . . ., n`
The values of ui and vj will then be unrestricted in sign. Hence, the dual of the transportation model can
now be written as
m n
Maximize Z * = Σ ui ai + Σ v j b j
i =1 j =1
subject to the constraints
ui + vj ≤ cij
and ui, vj unrestricted in sign for all i and j.
The relationship (cij – ui – vj) xij = 0 is known as complementary slackness for a transportation problem
and indicates that
(a) if xij > 0 and solution is feasible, then cij – ui – vj = 0 or cij = ui + vj, for each occupied cell,
(b) if xij = 0 and cij > ui + vj, then it is not desirable to have xij > 0 in the solution mix because it would
cost more to transport on a route (i, j),
(c) if cij ≤ ui + vj for some xij = 0, then xij can be brought into the solution mix.

9.5.2 Economic Interpretation of ui’s and vj’s

The ui values measures the comparative advantage of additional unit of supply or shadow price (or value) The dual variables
of available supply at centre i. This may also be termed as location rent. Similarly, the vj values measures ui s and vj s
the comparative advantage of an additional unit of commodity demanded at demand centre j. This may also represent the
shadow price (value
be termed as market price.
of the commodity)
Illustration The concept of duality in transportation problem is applied on Example 9.1 in the following manner: for the supply
centres and demand
Reproducing transportation data of Example 9.1 for ready reference in Table 9.9. In Table 9.9, there are centres,
m = 3 rows and n = 4 columns. Let u1, u2 and u3 be dual variables corresponding to each of the supply respectively.
constraint in that order. Similarly, v1, v2, v3 and v4 be dual variables corresponding to each of demand
constraint in that order. The dual problem then becomes
D1 D2 D3 D4 Supply ui

S1 19 30 50 10 7 u1

S2 70 30 40 60 9 u2

S3 40 8 70 20 18 u3

Demand 5 8 7 14 34

vj v1 v2 v3 v4 Table 9.9

Maximize Z = (7u1 + 9u2 + 18u3) + (5v1 + 8v2 + 7v3 + 14v4)

subject to the constraints
(i) u1 + v1 ≤ 19, (ii) u1 + v2 ≤ 30, (iii) u1 + v3 ≤ 50, (iv) u1 + v4 ≤ 10,
(v) u2 + v1 ≤ 70, (vi) u2 + v2 ≤ 30, (vii) u2 + v3 ≤ 40, (viii) u2 + v4 ≤ 60,
(ix) u3 + v1 ≤ 40, (x) u3 + v2 ≤ 8, (xi) u3 + v3 ≤ 70, (xii) u3 + v4 ≤ 20,
and ui, vj unrestricted in sign for all i and j.
268 Operations Research: Theory and Applications

Interpretation Consider the dual constraint u1 + v1 ≤ 19 or v1 ≤ 19 – u1. This represents the delivered
market value of the commodity at destination D1 which should be less than or equal to the unit cost of
transportation from S1 to D1 minus the per unit value of commodity at D1. A similar interpretation can also
be given for other constraints.
The optimal value of dual variables can be obtained either by simplex method or by reading values of
these variables from the optimal solution of transportation problem. It may be noted that the total
transportation cost at optimal solution would be the same as obtained by putting values of ui’s and vj’s from
optimal solution of transportation problem in the dual objective function:
3 4
Maximize Z = Σ ai ui + Σ b j v j
i =1 j =1

9.5.3 Steps of MODI Method (Transportation Algorithm)

The steps to evaluate unoccupied cells are as follows:
Step 1: For an initial basic feasible solution with m + n – 1 occupied cells, calculate ui and vj for rows
and columns. The initial solution can be obtained by any of the three methods discussed earlier.
To start with, any one of uis or vjs is assigned the value zero. It is better to assign zero to a particular
ui or vj where there are maximum number of allocations in a row or column respectively, as this will reduce
the considerably arithmetic work. The value of uis and vjs for other rows and columns is calculated by using
the relationship.
cij = ui + vj , for all occupied cells (i, j).
Step 2: For unoccupied cells, calculate the opportunity cost by using the relationship
dij = cij – (ui + vj) , for all i and j.
Step 3: Examine sign of each dij
(i) If dij > 0, then the current basic feasible solution is optimal.
(ii) If dij = 0, then the current basic feasible solution will remain unaffected but an alternative solution
Changing the exists.
shipping route
involves adding to (iii) If one or more dij < 0, then an improved solution can be obtained by entering an unoccupied cell
cells on the closed (i, j) into the solution mix (basis). An unoccupied cell having the largest negative value of dij is
path with plus signs
chosen for entering into the solution mix (new transportation schedule).
and subtracting from
cells with negative Step 4: Construct a closed-path (or loop) for the unoccupied cell with largest negative value of dij. Start
signs.
the closed path with the selected unoccupied cell and mark a plus sign (+) in this cell. Trace a path along
the rows (or columns) to an occupied cell, mark the corner with a minus sign (–) and continue down the
column (or row) to an occupied cell. Then mark the corner with plus sign (+) and minus sign (–) alternatively.
Close the path back to the selected unoccupied cell.
Step 5: Select the smallest quantity amongst the cells marked with minus sign on the corners of closed
loop. Allocate this value to the selected unoccupied cell, add it to occupied cells marked with plus signs,
and subtract it from the occupied cells marked with minus signs.
Step 6: Obtain a new improved solution by allocating units to the unoccupied cell according to Step
5 and calculate the new total transportation cost.
Step 7: Test optimality of the revised solution. The procedure terminates when all dij ≥ 0 for unoccupied
cells.
Remarks 1. The closed-loop (path) starts and ends at the selected unoccupied cell. It consists of
successive horizontal and vertical (connected) lines whose end points must be occupied cells, except an
end point associated with entering unoccupied cell. This means that every corner element of the loop must
be an occupied cell.
It is immaterial whether the loop is traced in a clockwise or anti-clockwise direction and whether it starts
up, down, right or left (but never diagonally). However, for a given solution only one loop can be
constructed for each unoccupied cell.
2. There can only be one plus (+) sign and only one minus (–) sign in any given row or column.
3. The closed path indicates changes involved in reallocating the shipments.
 Transportation Problem 269

Fig. 9.1
Flow Chart of
MODI Method

The steps of MODI method for solving a transportation problem are summarized in the flow chart
shown in Fig. 9.1.

9.5.4 Close-Loop in Transportation Table and its Properties

Any basic feasible solution must contain m + n – 1 non-zero allocations provided. An ordered set of at
(i) any two adjacent cells of the ordered set lie either in the same row or in the same column, and least four cells in a
(ii) no three or more adjacent cells in the ordered set lie in the same row or column. The first cell of the set must transportation table
follow the last in the set, i.e. each cell (except the last) must appear only once in the ordered set. forms a loop.
Consider the following two cases represented in Tables 9.10(a) and 9.10(b). In Table 9.10(a), if we join
the positive allocations by horizontal and vertical lines, then a closed loop is obtained. The ordered set
of cells forming a loop is:
L = {(a, 2), (a, 4), (e, 4), (e, 1), (b, 1), (b, 2), (a, 2)}
The loop in Table 9.10(b) is not allowed because it does not satisfy the conditions in the definition
of a loop. That is, the cell (b, 2) appears twice.

Table 9.10

(a) (b)
270 Operations Research: Theory and Applications

Remarks 1. Every loop has an even number of cells and has at least four cells.
2. The allocations are said to be in independent position if it is not possible to increase or decrease any
individual allocation without changing the positions of these allocations, or if a closed loop cannot
be formed through these allocations without violating the rim conditions.
3. Each row and column in the transportation table should have only one plus and minus sign. All cells
that have a plus or a minus sign, except the starting unoccupied cell, must be occupied cells.
4. Closed loops may or may not be in the shape of a square.
Example 9.6 Apply MODI method to obtain optimal solution of transportation problem using the data
of Example 9.1.

D1 D2 D3 D4 Supply

S1 19 30 50 10 17

S2 70 30 40 60 9

S3 40 18 70 20 18

Demand 5 8 7 14 34

Solution Applying Vogel’s approximation method to obtain an initial basic feasible solution. This
solution is shown in Table 9.11 [for ready reference see Table 9.5].
1. In Table 9.11, since number of occupied cells are m + n – 1 = 3 + 4 – 1 = 6 (as required), therefore
this initial solution is non-degenerate. Thus, an optimal solution can be obtained. The total transportation
cost associated with this solution is Rs 779.
2. In order to calculate the values of uis (i = 1, 2, 3) and vjs ( j = 1, 2, 3, 4) for each occupied cell, assigning
arbitrarily, v4 = 0 in order to simplify calculations. Given v4 = 0, u1, u2 and u3 can be immediately
computed by using the relation cij = ui + vj for occupied cells, as shown in Table 9.11.

D1 D2 D3 D4 Supply ui

S1 19 30 50 10 u1 = 10
5 + 32 + 60 2 7

S2 70 30 40 60 u2 = 60
+1 (+) 7 2 (–) 9
– 18
S3 40 8 70 20 u3 = 20
(–) 8 10 (+) 18
+ 11 + 70

Table 9.11 Demand 5 8 7 14 34

Initial Solution,
VAM vj v1 = 9 v2 = – 12 v3 = – 20 v4 = 0

c34 = u3 + v4 or 20 = u3 + 0 or u3 = 20
c24 = u2 + v4 or 60 = u2 + 0 or u2 = 60
c14 = u1 + v4 or 10 = u1 + 0 or u1 = 10
Given u1, u2, and u3, value of v1, v2 and v3 can also be calculated as shown below:
c11 = u1 + v1 or 19 = 10 + v1 or v1 = – 19
c23 = u2 + u3 or 40 = 60 + v3 or v3 = – 20
c32 = u3 + v2 or 8 = 20 + v2 or v2 = – 12
 Transportation Problem 271

3. The opportunity cost for each of the occupied cell is determined by using the relation
dij = cij – (ui + vj) and is shown below.
d12 = c12 – (u1 + v2) = 30 – (10 – 12) = 32
d13 = c13 – (u1 + v3) = 50 – (10 – 20) = 60
d21 = c2l – (u2 + v1 ) = 70 – (60 + 19) = 1
d22 = c22 – (u2 + v2) = 30 – (60 – 12) = – 18
d31 = c31 – (u3 + v1) = 40 – (20 + 19) = 11
d33 = c33 – (u3 + v3) = 70 – (20 – 20) = 70
4. According to the optimality criterion for cost minimizing transportation problem, the current solution
is not optimal, since the opportunity costs of the unoccupied cells are not all zero or positive. The
value of d22 = – 18 in cell (S2, D2) is indicating that the total transportation cost can be reduced in
the multiple of 18 by shifting an allocation to this cell.
5. A closed-loop (path) is traced along row S2 to an occupied cell (S3, D2). A plus sign is placed in cell
(S2, D2) and minus sign in cell (S3, D2). Now take a right-angle turn and locate an occupied cell in
column D4. An occupied cell (S3, D4) exists at row S3, and a plus sign is placed in this cell.
Continue this process and complete the closed path. The occupied cell (S2, D3) must be bypassed
otherwise they will violate the rules of constructing closed path.
6. In order to maintain feasibility, examine the occupied cells with minus sign at the corners of closed loop,
and select the one that has the smallest allocation. This determines the maximum number of units that
can be shifted along the closed path. The minus signs are in cells (S3, D2) and (S2, D4). The cell
(S2, D4) is selected because it has the smaller allocation, i.e. 2. The value of this allocation is then added
to cell (S2, D2) and (S3, D4), which carry plus signs. The same value is subtracted from cells (S2, D4)
and (S3, D2) because they carry minus signs.
7. The revised solution is shown in Table 9.12. The total transportation cost associated with this solution
is:
Total cost = 5 × 19 + 2 × 10 + 2 × 30 + 7 × 40 + 6 × 8 + 12 × 20 = Rs 743

D1 D2 D3 D4 Supply ui

S1 19 30 50 10 u1 = 0
5 +32 +42 2 7

S2 70 30 40 60 u2 = 32
+ 19 2 7 +14 9

S3 40 8 70 20 u3 = 10
+ 11 6 + 52 12 18

Demand 5 8 7 14 34
Table 9.12
vj v1 = 19 v2 = – 2 v3 = 8 v4 = 10 Optimal Solution

8. Test the optimality of the revised solution once again in the same way as discussed in earlier steps.
The values of uis, vjs and dijs are shown in Table 9.12. Since each of dijs is positive, therefore, the
current basic feasible solution is optimal with a mi]nimum total transportation cost of Rs 743.

Example 9.7 A company has factories at F1, F2, and F3 that supply products to warehouses at W1, W2
and W3. The weekly capacities of the factories are 200, 160 and 90 units, respectively. The weekly warehouse
requirements are 180, 120 and 150 units, respectively. The unit shipping costs (in rupees) are as follows:
272 Operations Research: Theory and Applications

Warehouse
W1 W2 W3 Supply

F1 16 20 12 200
Factory F2 14 8 18 160
F3 26 24 16 90

Demand 180 120 150 450

Determine the optimal distribution for this company in order to minimize its total shipping cost.
Solution Initial basic feasible solution obtained by North-West Corner Rule is given in Table 9.13.
Since, as required, this initial solution has m + n – l = 3 + 3 – l = 5 allocations, it is a non-degenerate solution.
The optimality test can, therefore, be performed. The total transportation cost associated with this solution is:

W1 W2 W3 Supply

F1 16 20 12
180 20 200

F2 14 8 18
100 60 160

F3 26 24 16
90 90
Table 9.13
Initial Solution Demand 180 120 150 450

Total cost = 16 × 180 + 20 × 20 + 8 × 100 + 18 × 60 + 16 × 90 = Rs 6,800

Determine the values of uis and vjs as usual, by arbitrarily assigning u1 = 0. Given u1 = 0, the values
of others variables obtained by using the equation cij = ui + vj for occupied cells, are shown in Table 9.14.

W1 W2 W3 Supply ui

At each step a non- F1 16 20 12 u1 = 0

occupied cell with 180 (–) 20 (+) 200
largest negative – 18
opportunity cost is
selected to get F2 14 8 18 u2 = – 12
maximum reduction (+) 100 60 (–) 160
in total
+10
transportation cost.
F3 26 24 16 u3 = – 14
90 90
+24 +18

Demand 180 120 150 450

Table 9.14 vj v1 = 16 v2 = 20 v3 = 30

c11 = u 1 + v1 or 16 = 0 + v1 or v1 = 16
c12 = u 1 + v2 or 20 = 0 + v2 or v2 = 20
c22 = u2 + v2 or 8 = u2 + 20 or u2 = – 12
c23 = u2 + v3 or 18 = –12 + v3 or v3 = – 30
c33 = u3 + v3 or 16 = u3 + 30 or u3 = – 14
 Transportation Problem 273

The opportunity cost for each of the unoccupied cells is determined by using the equation,
dij = cij – (ui + vj) as follows:

d13 = c13 – (u1 + v3) = 12 – (0 + 30) = – 18

d21 = c21 – (u2 + v1) = 14 – (–12 + 16) = – 10
d31 = c31 – (u3 + v1) = 26 – (–14 + 16) = – 24
d32 = c32 – (u3 + v2) = 24 – (–14 + 20) = – 18

The value of d13 = – 18 in the cell (F1, W3) indicates that the total transportation cost can be
reduced in a multiple of 18 by introducing this cell in the new transportation schedule. To see how many
units of the commodity could be allocated to this cell (route), form a closed path as shown in
Table 9.14.
The largest number of units of the commodity that should be allocated to the cell (F1, W3) is 20 units
because it does not violate the supply and demand restrictions (minimum allocation among the occupied
cells bearing negative sign at the corners of the loop). The new transportation schedule (solution) so
obtained is shown in Table 9.15.

W1 W2 W3 Supply

F1 16 20 12
180 20 200

F2 14 8 18
120 40 160

F3 26 24 16
90 90

Demand 180 120 150 450 Table 9.15

Revised Schedule

The total transportation cost associated with this solution is

Total cost = 16 × 180 + 12 × 20 + 8 × 120 + 18 × 40 + 16 × 90 = Rs 6,240
To test the optimality of the new solution shown in Table 9.15, again calculate the opportunity cost
of each unoccupied cell in the same manner as discussed earlier. The calculations for uis, vjs and dijs are
shown in Table 9.16.
c13 = u1 + v3 or 12 = u1 + 0 or u1 = – 12
c23 = u2 + v3 or 18 = u2 + 0 or u2 = – 18
c33 = u3 + v3 or 16 = u3 + 0 or u3 = – 16
c11 = u1 + v1 or 16 = 12 + v1 or v1 = – 14
c22 = u2 + v2 or 8 = 18 + v2 or v2 = – 10

d12 = c12 – (u1 + v2) or 20 – (12 – 10) = –18

d21 = c21 – (u2 + v1) or 14 – (18 + 4) = – 8
d31 = c31 – (u3 + v1) or 26 – (16 + 4) = –16
d32 = c32 – (u3 + v2) or 24 – (16 – 10) = 18

The value of d21 = – 8 in the cell (F2, W1) indicates that the total cost of transportation can further
be reduced in a multiple of 8 by introducing this cell in the new transportation schedule. The new solution
is obtained by introducing 40 units of the commodity in the cell (F2, W1), as indicated in Table 9.16. The
new solution is shown in Table 9.17.
274 Operations Research: Theory and Applications

W1 W2 W3 Supply ui

F1 16 20 12 u1 = 12
(–) 180 20 (+) 200
18

F2 14 8 18 u2 = 18
(+) 120 40 (–) 160
–8

F3 26 24 16 u3 = 16
90 90
6

Demand 180 120 150

Table 9.16 vj v1 = 4 v2 = – 10 v3 = 0

W1 W2 W3 Supply

F1 16 20 12
140 60 200

F2 14 8 18
40 120 160

F3 26 24 16
90 90

Table 9.17
Demand 180 120 150
Revised Schedule

The total transportation cost associated with this solution is

Total cost = 16 × 140 + 12 × 60 + 14 × 40 + 8 × 120 + 16 × 90 = Rs 5,920
To test the optimality of the new solution shown in Table 9.17, calculate again the opportunity cost
of each unoccupied cell in the same manner as discussed earlier. The calculations are shown in Table 9.18.

W1 W2 W3 Supply ui

F1 16 20 12 u1 = 16
140 +10 60 200

F2 14 8 18 u2 = 14
40 120 +8 160

F3 26 24 16 u3 = 20
+6 +10 90 90

Demand 180 120 150

Table 9.18 vj v1 = 0 v2 = – 6 v3 = – 4

d12 = c12 – (u1 + v2) or 20 – (16 – 6) = 10

d23 = c23 – (u2 + v3) or 18 – (14 – 4) = 18
d31 = c31 – (u3 + v1) or 26 – (20 + 0) = 16
d32 = c32 – (u3 + v2) or 24 – (20 – 6) = 10
 Transportation Problem 275

Since none of the unoccupied cells in Table 9.18 has a negative opportunity cost value, therefore, the
total transportation cost cannot be reduced further. Thus, the solution shown in Table 9.18 is the optimal
solution, giving the optimal transportation schedule with a total cost of Rs 5,920.

Example 9.8 The following table provides all the necessary information on the availability of supply
to each warehouse, the requirement of each market, and the unit transportation cost (in Rs) from each
warehouse to each market.
Market
P Q R S Supply

A 6 3 5 4 22
Warehouse B 5 9 2 7 15
C 5 7 8 6 8
Demand 7 12 17 9 45

The shipping clerk of the shipping agency has worked out the following schedule, based on his own
experience: 12 units from A to Q, 1 unit from A to R, 9 units from A to S, 15 units from B to R, 7 units from
C to P and 1 unit from C to R.
(a) Check and see if the clerk has the optimal schedule.
(b) Find the optimal schedule and minimum total transport cost.
(c) If the clerk is approached by a carrier of route C to Q, who offers to reduce his rate in the hope of
getting some business, by how much should the rate be reduced before the clerk would offer him the
business.
Solution (a) The shipping schedule determined by the clerk based on his experience is shown in
Table 9.19. The total transportation cost associated with this solution is
Total cost = 3 × 12 + 5 × 1 + 4 × 9 + 2 × 15 + 5 × 7 + 8 × 1 = Rs 150
Since the number of occupied cells (i.e. 6) is equal to the required number of occupied cells (i.e.
m + n – 1) in a feasible solution, therefore the solution is non-generate feasible solution. Now, to test the
optimality of the solution given in Table 9.19, evaluate each unoccupied cell in terms of the opportunity
cost associated with it. This is done in the usual manner and is shown in Table 9.20.

P Q R S Supply

A 6 3 5 4
12 1 9 22
B 5 9 2 7
15 15
C 5 7 8 6
7 1 8
Table 9.19
Demand 7 12 17 9 45 Initial Solution

In Table 9.20, cell (C, S) has a negative opportunity cost (i.e. – 1). Thus, this solution is not the optimal
solution and, therefore, the schedule prepared by the shipping clerk is not optimal.
(b) By forming a closed-loop to introduce the cell (C, S) into the new transportation schedule as shown
in Table 9.20, we get a new solution that is shown in Table 9.21.
276 Operations Research: Theory and Applications

P Q R S Supply ui

A 6 3 5 4 u1 = 0

+4 12 (+) 1 9 (–) 22

B 5 9 2 7 u2 = – 3
15 15
+9 +6
C 5 7 8 6 u3 = 3
7 (–) 1 (+) 8
+1 –1

Demand 7 12 17 9 45

Table 9.20 vj v1 = 2 v2 = 3 v3 = 5 v4 = 4

While testing the optimality of the improved solution shown in Table 9.21, we found that the
opportunity costs in all the unoccupied cells are positive. Thus the current solution is optimal and the
optimal schedule is to transport 12 units from A to Q; 2 units from A to R; 8 units from A to S; 15 units
from B to R; 7 units from C to P and 1 unit from C to S. The total minimum transportation cost associated
with this solution is
Total cost = 3 × 12 + 5 × 2 + 4 × 8 + 2 × 15 + 5 × 7 + 6 × 1 = Rs 149

P Q R S Supply ui

A 6 3 5 4 u1 = 0

+3 12 2 8 22

B 5 9 2 7 u2 = – 3

+5 +9 15 +6 15

C 5 7 8 6 u3 = 2
7 +2 +1 1 8

Demand 7 12 17 9 45
Table 9.21
Optimal Solution vj v1 = 3 v2 = 3 v3 = 5 v4 = 4

(c) The total transportation cost will increase by Rs 2 (opportunity cost) if one unit of commodity is
transported from C to Q. This means that the rate of the carrier on the route C to Q should be reduced
by Rs 2, i.e. from Rs 7 to Rs 5 so as to get some business of one unit of commodity only.
In case all the 8 units available at C are shipped through the route (C, Q), then the solution presented
in Table 9.21 may be read as shown in Table 9.22.

P Q R S Supply

A 6 3 5 4
7 4 2 9 22

B 5 9 2 7
15 15

C 5 7 8 6
8 8

Table 9.22 Demand 7 12 17 9 45

 Transportation Problem 277

The total cost of transportation associated with this solution is

Total cost = 6 × 7 + 3 × 4 + 5 × 2 + 4 × 9 + 2 × 15 + 7 × 8 = Rs 186.
Thus, the additional cost of Rs 37 (= 186 – 149) should be reduced from the transportation cost of 8 units
from C to Q. Hence transportation cost per unit from C to Q should be at the most 7 – (37/8) = Rs 2.38.

Example 9.10 ABC Limited has three production shops that supply a product to five warehouses. The
cost of production varies from shop to shop and cost of transportation from one shop to a warehouse also
varies. Each shop has a specific production capacity and each warehouse has certain amount of
requirement. The costs of transportation are given below:
Warehouse
I II III IV V Supply

A 6 4 4 7 5 100

Shop B 5 6 7 4 8 125

C 3 4 6 3 4 175

Demand 60 80 85 105 70 400

The cost of manufacturing the product at different production shops is

Shop Variable Cost Fixed Cost

A 14 7,000
B 16 4,000
C 15 5,000

Find the optimum quantity to be supplied from each shop to different warehouses at the minimum total
cost. [Delhi Univ., MBA, 2007]
Solution In this case, the fixed cost data is of no use. The transportation cost matrix will include the
given transportation cost plus the variable cost, as shown in Table 9.23.

I II III IV V Supply

A 6 + 14 = 20 4 + 14 = 18 4 + 14 = 18 7 + 14 = 21 5 + 14 = 19 100

B 5 + 16 = 21 6 + 16 = 22 7 + 16 = 23 4 + 16 = 20 8 + 16 = 24 125

C 3 + 15 = 18 4 + 15 = 19 6 + 15 = 21 3 + 15 = 18 4 + 15 = 19 175

Demand 60 80 85 105 70 400 Table 9.23

The optimal solution obtained by applying MODI method is shown in Table 9.24.

I II III IV V Supply ui

A 20 18 18 21 19 u1 = 18
15 85 100
+3 +5 +1

B 21 22 23 20 24 u2 = 22
20 105 125
0 +1 +2

C 18 19 21 18 19 u3 = 19
60 45 70 175
+2 +1

Demand 60 80 85 105 70
Table 9.24
vj v1 = – 1 v2 = 0 v3 = 0 v4 = – 2 v5 = 0 Optimal Solution
278 Operations Research: Theory and Applications

The transportation cost associated with the solution is

Total cost = 18 × 15 + 18 × 85 + 22 × 20 + 20 × 105 + 18 × 60 + 19 × 45 + 19 × 70 = Rs 7,605

CONCEPTUAL QUESTIONS B

1. Describe the computational procedure of the optimality test in m n

a transportation problem. Σ Si = Σ D j
i =1 j =1
2. Indicate how you will test for optimality of initial feasible solution Symbolically state the transportation problem. Establish that the
of a transportation problem. optimal solution is not altered when the cij’s are replaced by
3. Let Si and Dj (i = 1, 2, . . ., m; j = 1, 2, . . ., n) be the supply c ij* s, where c ij* = cij + ui + vj, ui (i = 1, 2, . . ., m) and vj ( j
and demand available, respectively, for a commodity at m
godowns and n markets. Let cij be the cost of transporting one = 1, 2, . . ., n) are arbitrary real numbers.
unit of the commodity from godown i to market j. Assuming that

SELF PRACTICE PROBLEMS B

1. Consider four bases of operation Bi and three targets Tj. The product to the five customers. The net unit cost of transporting
tons of bombs per aircraft from any base that can be delivered from the three plants to the five customers is given below:
to any target are given in the following table:
Customers
Target (Tj )
A B C D E
T1 T2 T3
I 4 1 3 4 4
B1 8 6 5
Plants II 2 3 2 2 3
Base (Bi ) B2 6 6 6
B3 10 8 4 III 3 5 2 4 4

B4 8 6 4 4. The following table gives the cost of transporting material from

supply points A, B, C and D to demand points E, F, G, H and I.
The daily sortie capability of each of the four bases is 150
sorties per day. The daily requirement of sorties spread over To
each individual target is 200. Find the allocation of sorties from
E F G H I
each base to each target which maximizes the total tonnage
over all three targets. Explain each step in the process. A 8 10 12 17 15
2. A company has four warehouses, a, b, c and d. It is required From B 15 13 18 11 9
to deliver a product from these warehouses to three customers
A, B and C. The warehouses have the following amounts in C 14 20 6 10 13
stock:
D 13 19 7 15 12
Warehouse : a b c d
No. of units : 15 16 12 13 The present allocation is as follows:
and the customers’ requirements are A to E 90; A to F 10; B to F 150; C to F 10; C to G 50; C to
Customer : A B C I 120; D to H 210; D to I 70.
No. of units : 18 20 18 (a) Check if this allocation is optimum. If not, find an optimum
The table below shows the costs of transporting one unit from schedule.
warehouse to the customer. (b) If in the above problem, the transportation cost from A to
G is reduced to 10, what will be the new optimum schedule?
Warehouse
5. A whole selling company has three warehouses from which the
a b c d supplies are drawn for four retail customers. The company
A 8 9 6 3 deals in a single product, the supplies of which at each
warehouse are:
Customer B 6 11 5 10
Warehouse Supply Customer Demand
C 3 8 7 9 Number (units) Number (units)

Find the optimal transportation routes. 1 20 1 15

3. A firm manufacturing a single product has three plants I, II and 2 28 2 19
III. They have produced 60, 35 and 40 units, respectively during 3 17 3 13
this month. The firm had made a commitment to sell 22 units to 4 18
customer A, 45 units to customer B, 20 units to customer C, 18
Total supply at the warehouses is equal to total demand from
units to customer D and 30 units to customer E. Find the
the customers. The table below gives the transportation costs,
minimum possible transportation cost of shifting the manufactured
per unit, shipped from each warehouse to each customer.
 Transportation Problem 279

Customer Calculate a transportation plan that will minimize the distribution

cost for the steel company. State the cost of this distribution
C1 C2 C3 C4 plan.
9. A company has three factories at Amethi, Baghpat and Gwalior
W1 3 6 8 5 that have a production capacity of 5,000, 6,000, and 2,500
tonnes, respectively. Four distribution centres at Allahabad,
Warehouse W2 6 1 2 5 Bombay, Kolkata and Delhi, require 6,000 tonnes, 4,000 tonnes,
2,000 tonnes and 1,500 tonnes, respectively, of the product.
W3 7 8 3 9
The transportation costs per tonne from different factories to
Determine what supplies should be dispatched from each of the different centres are given below:
warehouses to each customer so as to minimize the overall
transportation cost. Factories Distribution Centres
6. A manufacturer has distribution centres at Agra, Allahabad and
Kolkata. These centres have availability of 40, 20 and 40 units of Allahabad Bombay Kolkata Delhi
his product, respectively. His retail outlets at A, B, C, D and E Amethi 3 2 7 6
require 25, 10, 20, 30 and 15 units of the products, respectively.
The transport cost (in rupees) per unit between each centre outlet Baghpat 7 5 2 3
is given below: Gwalior 2 5 4 5

Distribution Retail Outlets Suggest an optimum transportation schedule and find the minimum
Centre cost of transportation.
A B C D E
10. A company has three plants and four warehouses. The supply
Agra 55 30 40 50 40 and demand in units and the corresponding transportation costs
are given. The table below has been taken from the solution
Allahabad 35 30 100 45 60 procedure of a transportation problem:
Kolkata 40 60 95 35 30 Warehouses

Determine the optimal distribution so as to minimize the cost of I II III IV Supply

transportation. [Delhi Univ., MBA, 2002]
7. A manufacturer has distribution centres located at Agra, Allahabad A 5 10 4 10 5 10
and Kolkata. These centres have available 40, 20 and 40 units
of his product. His retail outlets at A, B, C, D and E requires 25, Plants B 6 20 8 7 2 5 25
10, 20, 30 and 15 units of the product, respectively. The
shipping cost per unit (in rupees) between each centre and
outlet is given in the following table. C 4 5 2 10 5 5 7 20

Retail Outlets Demand 25 10 15 5 55

Distribution
Centre
A B C D E
Answer the following questions, giving brief reasons for the
Agra 55 30 40 50 40 same:
Allahabad 35 30 100 45 60 (a) Is this solution feasible?
(b) Is this solution degenerate?
Kolkata 40 60 95 35 30 (c) Is this solution optimum?
(d) Does this problem have more than one optimum solution?
Determine the optimal shipping cost.
If so, show all of them.
[Delhi Univ. MBA, 2003]
(e) If the cost for the route B-III is reduced from Rs 7 to Rs
8. A steel company is concerned with the problem of distributing
6 per unit, what will be the optimum solution?
imported ore from three ports to four steel mills. The supplies
11. A baking firm can produce a special bread in either of its two
of ore arriving at the ports are:
plants, the details of which are as follows:
Port Tonnes per week
a 20,000 Plant Production Capacity Production Cost
b 38,000 Loaves Rs/Loaf
c 16,000
The demand at the steel mills is as follows: A 2,500 2.30
Steel mills : A B C D B 2,100 2.50

Tonnes per week : 10,000 18,000 22,000 24,000

Four restaurant chains are willing to purchase this bread; their
The transportation cost is Re 0.05 per tonne per km. The demand and the prices they are willing to pay are as follows:
distance between the ports and the steel mills is as given below:

A B C D Chain Maximum Demand Price Offered

Loaves Rs/Loaf
a 50 60 100 50
1 1,800 3.90
b 80 40 70 50 2 2,300 3.70
3 0,550 4.00
c 90 70 30 50
4 1,750 3.60
280 Operations Research: Theory and Applications

The cost (in paise) of shipping a loaf from a plant to a restaurant Determine a delivery schedule for the baking firm that will
chain is: maximize its profit from this bread.
Write the dual of this transportation problem and use it for
Chain 1 Chain 2 Chain 3 Chain 4 checking the optimal solution to the given problem.
[Delhi Univ., MBA, 2005]
Plant A 6 8 11 9
Plant B 12 6 8 5

HINTS AND ANSWERS

1. The initial solution obtained by VAM is also the optimal 8. x11 = 10,000, x14 = 10,000, x22 = 18,000, x23 = 6,000,
solution: x11 = 50, x12 = 100, x21 = 150, x33 = 150, x24 = 14,000, x33 = 16,000, Total cost = Rs 1,66,000.
x42 = 100, x43 = 50. Maximum total tonnage = 3,300. 9. x11 = 3,500, x12 = 1,500, x22 = 2,500, x23 = 2,000, x24 = 1,500,
2. (A, b) = 5, (A, d ) = 13, (B, b) = 8, (B, c) = 12, (C, a ) = 15 x31 = 2,500, Total cost = Rs 39,500.
and (C, b) = 3, Total cost = Rs 301. 10. (a) The solution is feasible because it satisfies supply and
3. (I, B) = 45, (I, F ) = 15, (II, A) = 17, (II, D) = 18, demand constraints.
(III, A) = 5, (III, C) = 20 and (III, E) = 15, (b) The solution is non-degenerate because the number of
Total cost = Rs 290. occupied cells are equal to the required number of
4. (a) (A, F ) = 100, (B, F ) = 70, (B, I ) = 80, (C, E ) = 90, (m + n – 1) of occupied cells in the solution.
(C, G) = 50, (C, I ) = 40, (D, H ) = 210, (D, I ) = 70, (c) Solution is optimal.
Total cost = Rs 6,600. (d) The problem has alternative optimal solution because
(b) When transportation cost from A to G is reduced to 10, the opportunity cost for cell (B, III) is zero;
optimal schedule given in (a) remains unchanged. x11 = 10, x21 = 15, x23 = 5, x24 = 5, x31 = 10 and x32 = 10,
Total cost = Rs 235.
5. x11 = 15, x14 = 5, x22 = 19, x24 = 9, x33 = 13, x34 = 4, Total
(e) If cell (B, III) has a unit cost of 6, the opportunity cost
cost = Rs 209.
in this cell will be – 1 and, therefore, the given solution will
6. x11 = 5, x12 = 10, x13 = 20, x14 = 5, x21 = 20, x34 = 25, not be optimal. The new solution obtained will be:
x35 = 15, Total cost = Rs 3,650. x13 = 10, x21 = 15, x23 = 5, x24 = 5, x31 = 10, x32 = 10,
7. x12 = 2, x13 = 4, x15 = 2, x21 = 4, x31 = 1, x34 = 6, x35 = 1, Total cost = Rs 230.
Total cost = Rs 720.

9.6 VARIATIONS IN TRANSPORTATION PROBLEM

Some of the variations that often arise while solving a transportation problem are as follows.

9.6.1 Unbalanced Supply and Demand

For a feasible solution to exist, it is necessary that the total supply must equal the total demand. That is,
Total supply = Total demand
m n
Σ ai = Σ b j
A dummy source i =1 j =1
or destination is
added to balance But a situation may arise when the total available supply is not equal to the total demand [For proof see
transportation appendix]. The following two cases may arise:
problem where
demand is not equal (a) If the total supply exceeds the total demand, then an additional column (called a dummy demand centre)
to supply. can be added to the transportation table in order to absorb the excess supply. The unit transportation
cost for the cells in this column is set equal to zero because these represent product items that are
neither made nor sent.
(b) If the total demand exceeds the total supply, a dummy row (called a dummy supply centre) can be added
to the transportation table to account for the excess demand quality. The unit transportation cost in
such a case also, for the cells in the dummy row is set equal to zero.
Example 9.10 A company has received a contract to supply gravel to three new construction projects
located in towns A, B and C. The construction engineers have estimated that the required amounts of gravel
which will be needed at these construction projects are:
 Transportation Problem 281

Project Location Weekly Requirement

(Truckloads)
A 72
B 102
C 41

The company has 3 gravel pits located in towns X, Y and Z. The gravel required by the construction
projects can be supplied by three pits. The amount of gravel that can be supplied by each pit is as follows:
Plant : X Y Z
Amount available (truckloads) : 76 82 77
The company has computed the delivery cost from each pit to each project site. These costs (in Rs)
are shown in the following table:
Project Location
A B C
X 4 8 8
Pit Y 16 24 16
Z 8 16 24

Schedule the shipment from each pit to each project in such a manner that it minimizes the total
transportation cost within the constraints imposed by pit capacities and project requirements. Also find the
minimum cost.
Solution The total plant availability of 235 truckloads exceeds the total requirement of 215 truckloads
by 20 truckloads. The excess truckload capacity of 20 is handled by adding a dummy project location
(column), Dexcess with a requirement of 20 truck loads, Assigning unit transportation costs to the dummy
project location, modified transportation table is shown in Table 9.25.

A B C Dexcess Supply

W 4 8 8 0
35 41 76

X 16 24 16 0
62 20 82

Y 8 16 24 0
72 5 77
Table 9.25
Demand 72 102 41 20 235 Initial Solution

The initial solution is obtained by using Vogel’s approximation method as shown in Table 9.25. It may be
noted that 20 units are allocated from pit X to dummy project location D. This means pit X is short by 20 units.
To test the optimality of the initial solution shown in Table 9.25, calculate uis and vjs corresponding
to rows and columns respectively. These values are shown in Table 9.26.

A B C Dexcess Supply ui

W 4 8 8 0 u1 = 8
+4 (+) 35 41 (–) +16 76

X 16 24 16 0 u2 = 24
(–) 62 (+) 20 82
–8
Y 8 16 24 0 u3 = 16
72 5 77
+8 +8

Demand 72 102 41 20 235

vj v1 = – 8 v2 = 0 v3 = 0 v4 = – 24 Table 9.26
282 Operations Research: Theory and Applications

In Table 9.26, opportunity cost shown in the cell (X, C) is negative, the current solution is not optimal.
Thus, the unoccupied cell (X, C), where d23 = – 8 must enter into the basis and cell (W, C) must leave the
basis, as shown by the closed path in Table 9.26. The new solution is shown in Table 9.27.

A B C Dexcess Supply ui

W 4 8 8 0 u1 = – 16
+4 76 +8 +16 76

X 16 24 16 0 u2 = 0
0 21 41 20 82

Y 8 16 24 0 u3 = – 8
72 5 +16 +8 77

Demand 72 102 41 20 235

Table 9.27
Optimal Solution vj v1 = 16 v2 = 24 v3 = 16 v4 = 0

Since all opportunity costs, dij are non-negative in Table 9.27, the current solution is optimal. The total
minimum transportation cost associated with this solution is:
Total cost = 8 × 76 + 24 × 21 + 16 × 41 + 0 × 20 + 8 × 72 + 16 × 5 = Rs 2,424.
Example 9.11 A product is manufactured at four factories A, B, C and D. Their unit production costs are
Rs 2, Rs 3, Re 1 and Rs 5, respectively. Their production capacities are 50, 70, 30 and 50 units, respectively.
These factories supply the product to four stores, demands of which are 25, 35, 105 and 20 units respectively.
Unit transportation cost in rupees from each factory to each store is given in the table below.
Stores

I II III IV
A 2 4 6 11
B 10 8 7 5
Factories
C 13 3 9 12
D 4 6 8 3

Determine the extent of deliveries from each of the factories to each of the stores, so that the total
production and transportation cost is the minimum.
Solution The new transportation costs that include both the production and the transportation costs
is given in Table 9.28.

I II III IV Supply

A 2 + 2 = 4 4 + 2 = 6 6 + 2 = 8 11 + 2 = 13 50

B 10 + 3 = 13 8 + 3 = 11 7 + 3 = 10 5 + 3 = 8 70

C 13 + 1 = 14 3 + 1 = 4 9 + 1 = 10 12 + 1 = 13 30

D 4 + 5 = 9 6 + 5 = 11 8 + 5 = 13 3 + 5 = 8 50

Demand 25 35 105 20 200

Table 9.28 185

Since the total supply of 200 units exceeds the total demand of 185 units by 15 units, a dummy
destination (store) is added (or created) to absorb the excess capacity. The associated cost coefficients in
dummy store are taken as zero. This may be due to the reason that the surplus quantity remains lying in
the respective factories and is not shipped at all. The modified table is shown in Table 9.29.
 Transportation Problem 283

I II III IV Dummy Supply

A 4 6 8 13 0 50
25 5 20

B 13 11 10 8 0 70
70

C 14 4 10 13 0 30
30

D 9 11 13 8 0 50
15 20 15
Table 9.29
Demand 25 35 105 20 15 200 Initial Solution

Using the VAM method the initial solution is shown in Table 9.29. It can be seen that 15 units are
allocated to dummy store from factory D. This means that the company may cut down the production by
15 units at the factory that is proving to be uneconomical. Now to test the optimality of the solution shown
in Table 9.29, evaluate each unoccupied cell in terms of opportunity cost associated with it as shown in
Table 9.30.

I II III IV Dummy Supply ui

A 4 6 8 13 0 50 u1 = –5
25 5 20 +10 +5

B 13 11 10 8 0 70 u2 = –3
+7 +3 70 +3 +3

C 14 4 10 13 0 30 u3 = –7
30
+12 +4 +12 +7
D 9 11 13 8 0 50 u4 = 0
0 0 15 20 15

Demand 25 35 105 20 15 200

vj v1 = 9 v2 = 11 v3 = 13 v4 = 8 v5 = 0 Table 9.30

Since the opportunity cost in all the unoccupied cells is positive, the initial solution is an optimal
solution. The total cost of transportation associated with this solution is
Total cost = 4 × 25 + 6 × 5 + 8 × 20 + 10 × 70 + 4 × 30 + 13 × l5 + 8 × 20 + 0 × l5 = Rs l,465.

9.6.2 Degeneracy and its Resolution

A basic feasible solution for the general transportation problem must have exactly m + n – 1 (number of
rows + number of columns – 1) positive allocations in the transportation table. If the number of occupied
cells is less than the required number, m + n – 1, then such a solution is called degenerate solution. In
such cases, the current solution cannot be improved further because it is not possible to draw a closed
Degeneracy arises
path for every occupied cell. Also, the values of dual variables ui and vj that are used to test the optimality when the number of
cannot be computed. Thus, degeneracy needs to be removed in order to improve the given solution. The occupied cells are
degeneracy in the transportation problems may occur at two stages: less than the
number of rows +
(a) At initial basic feasible solution the number of occupied cells may be less than m + n – 1 allocations. columns – 1.
(b) At any stage while moving towards optimal solution two or more occupied cells may become
simultaneously unoccupied.

Case 1: Degeneracy at the initial solution To resolve degeneracy at the initial solution, allocate
a very small quantity close to zero to one or more (if needed) unoccupied cells so as to get m + n – 1
number of occupied cells. This amount is denoted by a Greek letter ε (epsilon) or ∆ (delta). This quantity
284 Operations Research: Theory and Applications

would neither affect the total cost nor the supply and demand values. In a minimization transportation
problem it is better to allocate ∆ to unoccupied cells that have lowest transportation costs, whereas in
maximization problems it should be allocated to a cell that has a high payoff value. In some cases, ∆ must
be added in one of those unoccupied cells that may help in the determination of ui and vj values.
The quantity ∆ is considered to be so small that if it is transferred to an occupied cell it does not
change the quantity of allocation. That is,
xij + ∆ = xij – ∆ = xij
∆ – ∆ = 0; ∆+∆=∆
0 + ∆ = ∆; k × ∆=∆
The ∆ value also does not affect the total transportation cost. Hence, the quantity ∆ is used to evaluate
unoccupied cells and to reduce the number of improvement cycles necessary to reach an optimal solution.
Once the purpose is over, ∆ can be removed from the transportation table.
Example 9.12 A manufacturer wants to ship 22 loads of his product as shown below. The matrix gives
the kilometres from sources of supply to the destinations.

Destination

D1 D2 D3 D4 D5 Supply

S1 5 8 6 6 3 8
Source S2 4 7 7 6 5 5
S3 8 4 6 6 4 9
Demand 4 4 5 4 8 22
25

The shipping cost is Rs 10 per load per km. What shipping schedule should be used in order to minimize
the total transportation cost? [Delhi Univ., MBA, 2001]

Solution Since the total destination requirement of 25 units exceeds the total resource capacity of 22 by
3 units, the problem is unbalanced. The excess requirement is handled by adding a dummy plant, Sexcess
with a capacity equal to 3 units. Assign zero unit transportation cost to the dummy plant, the modified
transportation table is shown in Table 9.31.

D1 D2 D3 D4 D5 Supply

S1 5 8 6 6 3
5 3 8

S2 4 7 7 6 5
4 1 5

S3 8 4 6 6 4
4 5 9

Sexcess 0 0 0 0 0
Table 9.31 3 3
Initial Solution,
but Degenerate Demand 4 4 5 4 8 25

The initial solution is obtained by using Vogel’s approximation method as shown in Table 9.31. Since
solution does not have required number of m + n – 1 = 4 + 5 –1 = 8 occupied cells, therefore, the initial
solution is degenerate. In order to remove degeneracy, assign ∆ to unoccupied cell (S2, D5), which has the
minimum cost amongst the unoccupied cells, as shown in Table 9.32.
 Transportation Problem 285

D1 D2 D3 D4 D5 Supply ui

S1 5 8 6 6 3 u1 = 0
8
+3 +5 (–) 5 +2
3 (+)

S2 4 7 7 6 5 u2 = 2
4 1 ∆ 5
+2 –1 (+) (–)

S3 8 4 6 6 4 u3 = 1
4 5 9
+5 –1 +1
Sexcess 0 0 0 0 0 u4 = – 4
3
(+) 3
+2 +1 –2 (–) +1 1

Demand 4 4 5 4 8 25

vj v1 = 2 v2 = 3 v3 = 6 v4 = 4 v5 = 3 Table 9.32

Determine ui and vj for occupied cells as shown in Table 9.32. Since opportunity cost in the cell (Sexcess,
D3) is largest negative, it is entered into the new solution mix and the cell (S2, D5) leaves the current solution
mix. The new solution is shown in Table 9.33.

D1 D2 D3 D4 D5 Supply ui

S1 5 8 6 6 3 u1 = 0
5 3 8
+1 +5 (–) 0 (+)

S2 4 7 7 6 5 u2 = 0
4 1 5
+4 +1 +2
S3 8 4 6 6 4 u3 = 1
4 (+) 5 9
+3 –1 –1 (–)

Sexcess 0 0 0 0 0 u4 = – 6
(+) ∆ 3 (–) 3
+2 +3 +3

Demand 4 4 5 4 8 25

vj v1 = 4 v2 = 3 v3 = 6 v4 = 6 v5 = 3 Table 9.33

Repeat the procedure of testing optimality of the solution given in Table 9.33. The optimal solution
is shown in Table 9.34.
D1 D2 D3 D4 D5 Supply

S1 5 8 6 6 3
8 8

S2 4 7 7 6 5
4 1 5

S3 8 4 6 6 4
4 2 3 9

Sexcess 0 0 0 0 0
3 3
Table 9.34
Demand 4 4 5 4 8 25 Optimal Solution
286 Operations Research: Theory and Applications

The minimum total transportation cost associated with this solution is

Total cost = (3 × 8 + 4 × 4 + 6 × 1 + 4 × 4 + 6 × 2 + 6 × 3) × 10 = Rs 920

Case 2: Degeneracy at subsequent iterations To resolve degeneracy, which occurs during

optimality test, the quantity may be allocated to one or more cells that have recently been unoccupied, to
have m + n – 1 number of occupied cells in the new solution.
Example 9.13 Goods have to be transported from sources S1, S2 and S3 to destinations D1, D2 and D3.
The transportation cost per unit, capacities of the sources, and the requirements of the destinations are
given in the following table.
D1 D2 D3 Supply
S1 8 5 6 120
S2 15 10 12 80
S3 3 9 10 80
Demand 150 80 50

Determine a transportation schedule so that cost is minimized.

Solution Using North-West Corner Method, the non-degenerate initial basic feasible solution so
obtained is given in Table 9.35.

D1 D2 D3 Supply

S1 8 5 6
120
120

S2 15 10 12
80
30 50

S3 3 9 10
80
30 50
Table 9.35
Initial Solution Demand 150 80 50 280

To test the optimality of the solution given in Table 9.35, calculate ui, vj and dij as usual as shown
in Table 9.36.

D1 D2 D3 Supply ui

S1 8 5 6 120 u1 = –7
120 +2 +2
S2 15 10 12 80 u1 = 0
(–) 30 50 (+)
+1
S3 3 9 10 80 u1 = –1
(+) –11 30 (–) 50

Demand 150 80 50 280

Table 9.36 vj v1 = 15 v2 = 10 v3 = 11

Since the unoccupied cell (S3, D1) has the largest negative opportunity cost of – 11, therefore, cell
(S3, D1) is entered into the new solution mix. The closed path for (S3, D1) is shown in Table 9.36. The
maximum allocation to (S3, D1) is 30. However, when this amount is allocated to (S3, D1) both cells
(S2, D1) and (S3, D2) become unoccupied because these two have same allocations. Thus, the number of
positive allocations become less than the required number, m + n – 1 = 3 + 3 – 1 = 5. Hence, this is a
degenerate solution as shown in Table 9.37.
 Transportation Problem 287

D1 D2 D3 Supply

S1 8 5 6
120
120
S2 15 10 12
80
80
S3 3 9 10
80
30 ∆ 50 Table 9.37
Degenerate
Demand 150 80 50 280 Solution

To remove degeneracy a quantity ∆ is assigned to one of the cells that has become unoccupied so
that there are m + n – 1 occupied cells. Assign ∆ to (S3, D2) and proceed with the usual solution procedure.
The optimal solution is given in Table 9.38.

D1 D2 D3 Supply

S1 8 5 6
120
70 ∆ 50
S2 15 10 12
80
80
S3 3 9 10
80
80
Table 9.38
Demand 150 80 50 280 Optimal Solution

The total minimum transportation cost associated with this solution is:
Total cost = 8 × 70 + 6 × 50 + 10 × 80 + 3 × 80 = Rs 1,900

9.6.3 Alternative Optimal Solutions

The existence of alternative optimal solutions can be determined by an inspection of the opportunity costs,
dij for the unoccupied cells. If dij = 0, for an unoccupied cell in an optimal solution, then an alternative
optimal solution exists and can be obtained by bringing such an unoccupied cell in the solution mix without
increasing the total transportation cost.
Illustration Consider the optimal solution of Example 9.10 given in Table 9.27. For ready reference Table
9.27 is reproduced as Table 9.39.

A B C Dexcess Supply ui

W 4 8 8 0
76 u 1 = – 16
+4 76 +8 + 16

X 16 24 16 0
82 u2 = 0
0 21 41 20

Y 8 16 24 0
77 u3 = – 8
72 5 + 16 +8

Demand 72 102 41 20 235

vj v1 = 16 v2 = 24 v3 = 16 v4 = 0 Table 9.39
288 Operations Research: Theory and Applications

The opportunity costs in all unoccupied cells are positive except for the cell (X, A) where d21 = 0. This
means, if (X, A) is entered into the new solution mix, no change in the transportation cost would occur.
To determine this alternative solution, form a closed path for cell (X, A) as shown in Table 9.40.

A B C Dexcess Supply ui

W 4 8 8 0 76 u1 = – 16
+4 76 +8 +16

X 16 24 16 0 82 u2 = 0
(+) 21 (–) 41 20
0
Y 8 16 24 0 77 u3 = – 8
(–) 72 5 (+) + 16 +8

Demand 72 102 41 20 235

Table 9.40
Optimal Solution vj v1 = 16 v2 = 24 v3 = 16 v4 = 0

The maximum quantity that can be allocated to cell (X, A) is 21. After this change, the new solution
is shown in Table 9.41.
Since all dij values are positive or zero, the solution given in Table 9.41 is optimal with a minimum total
transportation cost of Rs 2,424, which is same as in the previous solution.

A B C Dexcess Supply ui

W 4 8 8 0 76 u1 = – 16
+4 76 +8 + 16

X 16 24 16 0 82 u2 = – 0
21 0 41 20

Y 8 16 24 0 77 u3 = – 8
51 26 + 16 +8

Table 9.41 Demand 72 102 41 20 235

Alternative
Optimal Solution vj v1 = 16 v2 = 24 v3 = 16 v4 = 0

Example 9.14 XYZ tobacco company purchases tobacco and stores in warehouses located in the
following four cities:
Warehouse Location (City) : A B C D
Capacity (Tonnes) : 90 50 80 60
The warehouses supply tobacco to cigarette companies in three cities that have the following demand:

Cigarette Company Demand (Tonnes)

Bharat 120
Janata 100
Red Lamp 110
 Transportation Problem 289

The following railroad shipping costs per tonne (in hundred rupees) have been determined:

Warehouse Location Bharat Janata Red Lamp

A 7 10 5
B 12 9 4
C 7 3 11
D 9 5 7

Because of railroad construction, shipments are temporarily prohibited from warehouse at city A to Bharat
Cigarette company.
(a) Find the optimum distribution for XYZ tobacco company.
(b) Are there multiple optimum solutions? If yes, identify them.
(c) Write the dual of the given transportation problem and use it for checking the optimum solution.
[Delhi Univ., MBA, 2003, 2005, 2008]
Solution Since the total demand of 330 units exceeds the total capacity of 280 units by 50 units of
the product, a dummy company is created to handle the excess demand. The associated cost coefficients
for the dummy warehouse location are taken as zero. Further, the cost element (i.e. 7) on the route city A–
Bharat company is replaced by M, since the route is prohibited. The modified table is shown in
Table 9.42.

Bharat Janata Red Lamp Supply

A M 10 5 90

B 12 9 4 50

C 7 3 11 80

D 9 5 7 60

Dummy 0 0 0 50

Demand 120 100 110 330 Table 9.42

Using the VAM method, the initial solution is shown in Table 9.43. To test the optimality of this solution
evaluate each unoccupied cell in terms of opportunity cost associated with it as shown in Table 9.43.

Bharat Janata Red Lamp Supply ui

A M 10 5
M – 13 +1 90 90 u1 = 13

B 12 9 4
30 20 50 u2 = 12

C 7 3 11 11
(+) 80 (–) 80 u3 = 7
0 +12
D 9 5 7
(–) 40 20 (+) +6 60 u4 = 9

Dummy 0 0 0
50 +4 +8 50 u5 = 0
Demand 120 100 110 330
Table 9.43
vj v1 = 0 v2 = – 4 v3 = – 8 Optimal Solution
290 Operations Research: Theory and Applications

Since the opportunity cost in all the unoccupied cells is positive, the initial solution shown in
Table 9.43 is also an optimal solution. The total transport cost associated with this solution is
Total cost = 5 × 90 + 12 × 30 + 4 × 20 + 3 × 80 + 9 × 40 + 5 × 20 = Rs 1,59,000
(b) Since opportunity cost in cell (C, Bharat), d31 = 0, there exists an alternative optimal solution:
x13 = 90, x21 = 30, x23 = 20, x31 = 40, x32 = 40, x42 = 60 and x51 = 50
and total cost = Rs 1,59,000
(c) The dual of the given problem is
Maximize Z = (90 u1 + 50 u2 + 80 u3 + 60 u4 + 50 u5) + (120 v1 + 100 v2 + 110 v3)
subject to the constraints
u1 + v1 ≤ M u2 + v1 ≤ 12 u3 + v1 ≤ 17 u4 + v1 ≤ 9
u1 + v2 ≤ 10 u2 + v2 ≤ 19 u3 + v2 ≤ 13 u4 + v2 ≤ 5
u1 + v3 ≤ 15 u2 + v3 ≤ 14 u3 + v3 ≤ 11 u4 + v3 ≤ 7
and ui, vj unrestricted in sign, for all i and j.
Substituting the values of uis and vjs from the optimal solution of transportation problem shown in
Table 9.43, we get
Maximize Z = 90 × 13 + 50 × 12 + 80 × 7 + 60 × 9 + 50 × 0 + 120 × 0 + 100 × – 4
+ 110 × – 8 = Rs 1,59,000
which is the same value as obtained earlier.

9.6.4 Prohibited Transportation Routes

If situations like road hazards (snow, flood, etc.), traffic regulations, etc., arise, then it may not be possible
to transport goods from certain sources to certain destinations. Such situations can be handled by
assigning a very large cost, say M (or ∞ ) to such a route(s) (or cell).
Example 9.15 Consider the problem of scheduling the weekly production of certain items for the next
four weeks. The production cost of the item is Rs 10 for the first two weeks and Rs 15 for the last two
weeks. The weekly demands are 300, 700, 900 and 800, which must be met. The plant can produce a maximum
of 700 units per week. In addition, the company can use overtime during the second and third week. This
increases the weekly production by an additional 200 units, but the production cost also increases by
Rs 5. Excess production can be stored at a unit cost of Rs 3 per week. How should the production be
scheduled so as to minimize the total cost?
Solution The given information is presented as a transportation problem in Table 9.44. The cost elements
in each cell are determined by adding the production cost, the overtime cost of Rs 5, and the storage cost
of Rs 3. Thus, in the first row, the cost of Rs 3 is added during second week onward. Since the output
of any period cannot be used in a period preceding it, the cost element is written in the appropriate cells.
A dummy column has been added because the supply exceeds demand.
Week (Origin) Production Cost per Week (Destination) Supply

I II III IV Dummy
Rl 10 13 16 19 0 700
R2 – 10 13 16 0 700
O2 – 15 18 21 0 200
R3 – – 15 18 0 700
O3 – – 20 23 0 200
R4 – – – 15 0 700
Table 9.44 Demand 300 700 900 800 500 3,200

Apply Vogel’s method to get initial solution of the given transportation problem and then apply
MODI method to get optimal transportation schedule. Degeneracy occurs at the initial basic feasible
solution stage. Degeneracy may be removed by adding ∆ in the cell (R2, Dummy). The optimal solution
is shown in Table 9.45.
 Transportation Problem 291

I II III IV Dummy Supply

R1 10 13 16 19 0 700
300 200 100 100
R2 – 10 13 16 0 700
700 ∆
O2 – 15 18 21 0 200
200
R3 – – 15 18 0 700
700
O3 – – 20 23 0 200
200
R4 – – – 15 0 700
700
Table 9.45
Demand 300 700 900 800 500 3,200 Optimal Solution

The production schedule is given in Table 9.46.

Production Units For Use in Week

in Week I II III IV

I 700 300 – 200 100

RS R2 700 – 700 – –
II T O2 Nil
RS R3 700 – – 700 –
III T O3 Nil
Table 9.46
IV 700 – – – 700
Production
Demand 300 700 900 800 Schedule

The total minimum cost for the optimal production schedule given in Table 9.47 is
Total cost = 10 × 300 + 16 × 200 + 19 × 100 + 10 × 700 + 15 × 700 + 15 × 700 = Rs 36,100

Example 9.16 ABC company wishes to develop a monthly production schedule for the next three
months. Depending upon the sales commitments, the company can either keep the production constant,
allowing fluctuations in inventory, or inventories can be maintained at a constant level, with fluctuating
production. Fluctuating production necessitates working overtime, the cost of which is estimated to be
double the normal production cost of Rs 12 per unit. Fluctuating inventories result in inventory carrying
cost of Rs 2 per unit. If the company fails to fulfill its sales commitment, it incurs a shortage cost of Rs
4 per unit per month. The production capacities for the next three months are shown in the following table:

Production Capacity
Month Regular Overtime Sales

M1 50 30 60
M2 50 0 120
M3 60 50 40

Determine the optimal production schedule. [Delhi Univ, MBA, 2002, 2005, AMIE 2009]
Solution The given information is presented as a transportation problem in Table 9.47. The cost elements
in each cell are determined as follows:
292 Operations Research: Theory and Applications

(i) If items are produced in a month for sales during the same month, there will be no inventory carrying
cost. Thus, the total cost will either be the normal production cost or the overtime production cost.
Thus the cost elements for cells (R1, 1), (R2, 2) and (R3, 3) are Rs 12 each and for cells (O1, 1),
(O2, 3) are Rs 24 each.
(ii) If items are produced in a particular month for sales during the subsequent month, in addition to
the production costs (normal or overtime) inventory carrying cost at the rate of Rs 2 per month will
be incurred.

Cell Production Inventory Total Cost

Cost (Rs) Carrying Cost (Rs) (Rs)
(R1, 2) 12 2 14
(R1, 3) 12 4 16
(O1, 2) 24 2 26
(O1, 3) 24 4 28
(R2, 3) 12 2 14

(iii) If the company fails to fulfil its sales commitment, it incurs a shortage cost of Rs 4 per unit per
month, in addition to the production costs (normal or overtime), carrying (storage) cost at the rate
of Rs 2 per month will be incurred.

Cell Production Cost Shortage Cost Total Cost

(Rs) (Rs) (Rs)
(R2, 1) 12 4 16
(R3, 2) 12 4 16
(R3, 1) 12 8 20
(O3, 2) 24 4 28
(O3, 1) 24 8 32

The solution is left as an exercise for the reader. The initial basic feasible solution obtained by Vogel’s
method (shown in Table 9.47) is also the optimal solution.

M1 M2 M3 Dummy Product
Supply

R1 12 14 16 0
50 50

O1 24 26 28 0
10 20 30

R2 16 12 14 0
50 50

R3 20 16 12 0
20 40 60

O3 32 28 24 0
30 20 50

Table 9.47 Sales Demand 60 120 40 20 240

 Transportation Problem 293

The production schedule is given in Table 9.48.

Production Units For Use in Month

in Month M1 M2 M3

M1
RS R
1 50 50 – –
TO 1 30 10 20 –
M2 R2 50 – 50 –

M3
RS R3 60 – 20 40
T O3 30 – 30 – Table 9.48
Production
Demand 60 120 40 Schedule

The total minimum cost for the optimal production schedule given in Table 9.49 is
Total cost = 12 × 50 + 24 × 10 + 16 × 20 + 12 × 50 + 16 × 20 + 12 × 40 + 28 × 30
Total cost = Rs 3,400.
Example 9.17 The following is the information that concerns the operations of the XYZ manufacturing
company. The production cost of the company is estimated to be Rs 5 per unit.

Month 1 Month 2

Units on order 800 1,400

Production Capacity
Regular time 920 920
Overtime 250 250
Excess cost/unit (overtime) 1.25 1.25
Storage cost/unit 0.50 0.50
Formulate and solve the above problem as transportation problem. [Delhi Univ., MBA, 2004; AMIE 2006]
Solution The storage cost of Re 0.50 per unit per month is charged only if production during the month 1 is
used for supplies during month 2.
Costs for supplies against first month’s order from the previous month have been assumed at infinity as
this is treated not only as prohibitive but also as undesirable. This is because the order quantity of first month
is even less than a regular time production capacity for the same month.
This problem is unbalanced as net supply is of 2,340 units while the demand is only of 2,200 units. A
dummy demand centre of 140 units with supply cost zero is added to solve the problem. The data are summa-
rized in Table 9.49 along with initial solution.
The initial basic solution obtained by Vogel’s method (shown in Table 9.49) is updated in order to obtain
optimal solution, which is shown in Table 9.50.
The least cost production schedule to meet the sale demand is shown below:
M1 M2 Dummy Supply M1 M2 Dummy Supply
5.0 5.5 0 5.0 5.5 0
Table 9.49
M1 800 120 920 M1 800 120 920 Initial Solution

6.25 6.75 0 6.25 6.75 0

M1(OT) 250 250 M1(OT) 110 140 250
∞ 5.0 0 ∞ 5.0 0

M2 920 920 M2 920 920

∞ 6.25 0 ∞ 6.25 0

M2(OT) 110 140 250 M2(OT) 250 250

Table 9.50
Demand 800 1,400 140 Demand 800 1,400 140 Optimal Solution
294 Operations Research: Theory and Applications

Production Supply
M1 M2 M1 M2

Regular time 920 110 800 230

Overtime 920 250 – 1,170
800 1,400

9.7 MAXIMIZATION TRANSPORTATION PROBLEM

In general, the transportation model is used for cost minimization problems. However, it may also be used
to solve problems in which the objective is to maximize total profit. That is, instead of unit cost cij, the
unit profit or payoff pij associated with each route, (i, j) is given. The objective function in terms of total
profit (or payoff) is then stated as follows:
m n
Maximize Z = Σ Σ pij xij
i =1 j =1
The procedure for solving such problems is same as that for the minimization problem. However, a few
adjustments in Vogel’s approximation method (VAM) for finding initial solution and in the MODI optimality
test are required.
For finding the initial solution by VAM, the penalties are computed as difference between the largest
and next largest payoff in each row or column. In this case, row and column differences represent payoffs.
Allocations are made in those cells where the payoff is largest, corresponding to the highest row or column
difference.
Since it is a maximization problem, the criterion of optimality is the converse of the rule for minimi-
zation. The rule is: A solution is optimal if all opportunity costs dij for the unoccupied cells are zero or
negative.
Example 9.18 A company has four manufacturing plants and five warehouses. Each plant manufactures
the same product, which is sold at different prices in each warehouse area. The cost of manufacturing and
cost of raw materials are different in each plant due to various factors. The capacities of the plants are also
different. The relevant data is given in the following table:

Plant
Item 1 2 3 4
Manufacturing cost (Rs) per unit 112 110 118 18
Raw material cost (Rs) per unit 118 117 117 15
Capacity per unit time 100 200 120 80

The company has five warehouses. The sale prices, transportation costs and demands are given in the
following table:

Warehouse Transportation Cost (Rs) per Unit Sale Price Demand

per Unit (Rs)
1 2 3 4
A 14 7 4 13 30 80
B 18 9 7 18 32 120
C 12 7 6 10 28 150
D 10 7 5 18 34 70
E 12 5 8 19 30 90

(a) Formulate this problem as a transportation problem in order to maximize profit.

(b) Find the solution using VAM method.
(c) Test for optimality and find the optimal solution.

Solution Based on the given data, the profit matrix can be derived by using following equation.
Profit = Sales price – Production cost – Raw material cost – Transportation cost
The matrix, so obtained, is shown in Table 9.51.
 Transportation Problem 295

Converting data on profit into cost by subtracting all the profit values in the table from the highest
profit value. Since highest profit value is 15, therefore, subtracting all cell values including itself from it.
The new values so obtained are shown in Table 9.52. The problem now becomes a usual cost minimizing
transportation problem.

1 2 3 4 Dummy Demand

A 6 6 11 15 0 80
B 4 6 10 12 0 120
C 6 4 7 6 0 150
D 4 10 14 14 0 70
E 8 8 7 9 0 90
Table 9.51
Supply 100 200 120 80 10 510 Profit Matrix

Apply Vogel’s method to find the initial basic feasible solution, as shown in Table 9.52.

1 2 3 4 Dummy Demand ui

A 9 9 4 0 15 80 u1 = 4
+7 +5 +4 80 + 12
B 11 9 5 3 15 120 u2 = 9
(+)
+4 70 (–) 50 –2 +7
C 9 11 8 11 15 150 u 3 = 11
100 40 +1 +4 10

D 11 5 1 1 15 70 u4 = 5
+8 0 (+) 70 ∆ (–) +11
E 7 7 8 6 15 90 u5 = 7
+2 90 +5 +3 +9

Supply 100 200 120 80 10 510 Table 9.52

Initial Feasible
vj v1 = – 2 v2 = 0 v3 = – 4 v4 = – 4 v5 = – 1 Solution

Since at initial solution stage, the number of occupied cells are only 8, which is one less than the required
number, m + n – 1 = 9, therefore, the solution is degenerate. However, after making an allocation of ∆ to
the cell (D, 4), the initial solution has now become eligible for optimality test.
Apply MODI method to evaluate each unoccupied cell in terms of opportunity cost associated with
it in the usual manner. This is shown in Table 9.52.
The cell (B, 4) has a negative opportunity cost (i.e. – 2) as shown in Table 9.52. Introduce it into the
new solution by constructing a loop shown in Table 9.52. The new solution is given in Table 9.53, where
∆ has shifted from cell (D, 4) to cell (B, 4).
296 Operations Research: Theory and Applications

1 2 3 4 Dummy Demand ui

A 9 9 4 0 15 80 u1 = – 5
80
+5 +3 +2 +5
B 11 9 5 3 15 120 u2 = – 2
70 50 ∆
+4 +2
C 9 11 8 11 15 150 u3 = 0
100 40 10
+1 +6
D 11 5 1 1 15 70 u4 = – 6
0 70
+8 +2 +6
E 7 7 8 6 15 90 u5 = – 4
90
+2 +5 +5 +4

Table 9.53 Supply 100 200 120 80 10 510

Optimal Solution vj v1 = 9 v2 = 11 v3 = 7 v4 = 5 v5 = 15

Since there is no negative opportunity cost in any of the unoccupied cells in Table 9.53, therefore, this
solution is the optimal solution. However, the zero opportunity cost in cell (D, 2) indicates the existence
of an alternative solution. The total maximization profit associated with the solution is
Total profit = 9 × 70 + 5 × 50 + 9 × 100 + 11 × 40 + 15 × 10 + 1 × 70 + 7 × 90 = Rs 4,580.

9.8 TRANS-SHIPMENT PROBLEM

In a transportation problem, the shipment of a commodity takes place among sources and destinations. But
instead of direct shipments to destinations, the commodity can be transported to a particular destination
through one or more intermediate or trans-shipment points. Each of these points, in turn supply to other
points. Thus, when the shipments are done from destination to destination and from source to source, such
type of transportation problems are referred as trans-shipment problems. A trans-shipment problem
involving four sources and three destinations is shown diagrammatically in Figs. 9.2(a) and (b).

Fig. 9.2

Since the flow of commodity can be in both directions, arrows are not shown in Fig. 9.2(b). The solution
to this problem can be obtained by using the transportation model. The solution procedure is as follows:
If there are m sources and n destinations, a transportation table shall be of size (m + n) × (m + n) instead
 C h a p t e r 10
Assignment Problem
“We don’t have as many managers as we should, but we would rather have too few than too
many.”
– Larry Page

PREVIEW
An assignment problem is a particular case of a transportation problem where the given resources are
allocated to an equal number of activities with an aim of either minimizing total cost, distance, time or
maximizing profit. Travelling salesman is a specific application of assignment model.

LEARNING OBJECTIVES

After studying this chapter, you should be able to

z understand the features of assignment problems and transportation problems.
z formulate an assignment problem as a square matrix.
z apply the Hungarian method to solve an assignment problem.
z make appropriate changes in the Hungarian method to solve an unbalanced assignment problem,
profit maximization assignment problem, etc.
z solve a travelling salesman problem.

CHAPTER OUTLINE
10.1 Introduction 10.5 A Typical Assignment Problem
10.2 Mathematical Model of Assignment Problem 10.6 Travelling Salesman Problem
10.3 Solution Methods of Assignment Problem • Self Practice Problems C
• Conceptual Questions A • Hints and Answers
• Self Practice Problems A ‰ Chapter Summary
• Hints and Answers ‰ Chapter Concepts Quiz
10.4 Variations of the Assignment Problem ‰ Case Study
• Conceptual Questions B ‰ Appendix: Important Results and Theorems
• Self Practice Problems B
• Hints and Answers
 Assignment Problem 311

10.1 INTRODUCTION
An assignment problem is a particular case of a transportation problem where the resources (say facilities)
are assignees and the destinations are activities (say jobs). Given n resources (or facilities) and n activities
(or jobs), with effectiveness (in terms of cost, profit, time, etc.) of each resource for each activity. Then
problem becomes to assign (or allocate) each resource to only one activity (job) and vice-versa so that the
given measure of effectiveness is optimized.
The problem of assignment arises because the resources that are available such as men, machines, etc.,
have varying degree of efficiency for performing different activities. Therefore, the cost, profit or time of
performing different activities is also different. Thus, the problem becomes: How should the assignments
be made in order to optimize the given objective.
Some of the problems where the assignment technique may be useful are assignment of (i) workers
to machines, (ii) salesmen to different sales areas, (iii) clerks to various checkout counters, (iv) classes to Assignment table
rooms, (v) vehicles to routes, (vi) contracts to bidders, etc. is a convenient way
to summarize
available data.
10.2 MATHEMATICAL MODEL OF ASSIGNMENT PROBLEM
The general data matrix for assignment problem is shown in Table 10.1. It may be noted that this data matrix
is the same as the transportation cost matrix except that the supply (or availability) of each of the resources
and the demand at each of the destinations is taken to be one. It is due to this fact that assignments are
made on a one-to-one basis.

Resources Activities ( jobs) Supply

(workers) J1 J2 . . . Jn
W1 c11 c12 . . . c1n 1
W2 c21 c22 . . . c2n 1
. . . . .
. . . . .
. . . . .
Table 10.1
Wn cn1 cn2 . . . cnn 1 Assignment Data
Demand 1 1 . . . 1 n Matrix

Suppose, xij represents the assignment of resource (facility) i to activity (job) j such that

1 if resource i is assigned to activity j

xij = 
0 otherwise
Then mathematical model of the assignment problem can be stated as:
n n
Minimize Z = Σ Σ cij xij
i =1 j =1

subject to the constraints

n
Σ xij = 1, for all i (resource availability)
j =1

n
Σ xij = 1, for all j (activity requirement)
i =1

and xij = 0 or 1, for all i and j

where cij represents the cost of assignment of resource i to activity j.
This mathematical model of assignment problem is a particular case of the transportation problem for
two reasons: (i) the cost matrix is a square matrix, and (ii) the optimal solution table (matrix) for the problem
would have only one assignment in a given row or a column.
312 Operations Research: Theory and Applications

Remark If a constant is added to or subtracted from every element of any row or column of the given
cost matrix, then it would not change optimal assignments and value of objective function (See Appendix
10.A for proof.)

10.3 SOLUTION METHODS OF ASSIGNMENT PROBLEM

An assignment problem can be solved by any of the following methods:
• Enumeration method • Simplex method
• Transportation method • Hungarian method
1. Enumeration Method In this method, a list of all possible assignments among the given resources
(men, machines, etc.) and activities (jobs, sales areas, etc.) is prepared. Then an assignment that
involves the minimum cost (or maximum profit), time or distance is selected. If two or more assignments
have the same minimum cost (or maximum profit), time or distance, the problem has multiple optimal
solutions.
In general, if an assignment problem involves n workers/jobs, then in total there are n! possible
assignments. For example, for an n = 5 workers/jobs problem, we have to evaluate a total of 5! or 120
assignments. However, when n is large, the method is unsuitable for manual calculations. Hence, this
method is suitable only when the value of n is small.
2. Simplex Method Since each assignment problem can be formulated as a 0 or 1 integer linear
programming problem, such a problem can also be solved by the simplex method. The general
mathematical model of the assignment problem involves n × n decision variables and n + n or 2n
equalities. Thus, for any assignment problem that involves 5 workers/jobs, there will be 25 decision
variables and 10 equalities. Solving such an assignment problem manually is difficult.
3. Transportation Method Since an assignment problem is a special case of the transportation problem,
it can also be solved by using MODI method. However, every basic feasible solution of a general
Hungarian method assignment problem that has a square matrix of order n should have m + n – 1 = n + n – l = 2n – 1
to solve an assignments. But due to the special structure of this problem, none of the solutions can have more than
assignment problem n assignments. Consequently, solutions will be degenerate. To remove degeneracy, (n – 1) number of
is more efficient
dummy allocations (deltas or epsilons) will be required in order to proceed with MODI method. Thus, the
than using simplex
method. problem of degeneracy at each solution makes the procedure computationally inefficient for solving an
assignment problem.
4. Hungarian Method The Hungarian method (developed by Hungarian mathematician D. Konig) is
an efficient method of finding the optimal solution of an assignment problem without making a direct
comparison of every solution. The method works on the principle of reducing the given cost matrix
to a matrix of opportunity costs. Opportunity costs show the relative penalties associated with
assigning a resource to an activity. Hungarian method reduces the cost matrix to the extent of having
at least one zero in each row and column so as to make optimal assignments.

10.3.1 Hungarian Method for Solving Assignment Problem

The Hungarian method (minimization case) can be summarized in the following steps:

Step 1: Develop the cost matrix from the given problem If the number of rows are not equal
to the number of columns, then add required number of dummy rows or columns. The cost element in
dummy rows/columns are always zero.
Step 2: Find the opportunity cost matrix
(a) Identify the smallest element in each row of cost matrix and then subtract it from each element of that
row, and
(b) In the reduced matrix obtained from 2(a), identify the smallest element in each column and then subtract
it from each element of that column. Each row and column now have at least one zero element.

Step 3: Make assignments in the opportunity cost matrix The procedure of making assignments
is as follows:
 Assignment Problem 313

(a) First round for making assignments

• Identify rows successively from top to bottom until a row with exactly one zero element is found.
Make an assignment to this single zero by making a square ( ) around it. Then cross off (×) all
other zeros in the corresponding column.
• Identify columns successively from left to right hand with exactly one zero element that has not
been assigned. Make assignment to this single zero by making a square ( ) around it and then
cross off (×) all other zero elements in the corresponding row.
(b) Second round for making assignments
• If a row and/or column has two or more unmarked zeros and one cannot be chosen by inspection,
then choose zero element arbitrarily for assignment.
• Repeat steps (a) and (b) successively until one of the following situations arise.

Step 4: Optimality criterion

(a) If all zero elements in the cost matrix are either marked with square ( ) or are crossed off (×) and there is
exactly one assignment in each row and column, then it is an optimal solution. The total cost associated
with this solution is obtained by adding the original cost elements in the occupied cells.
(b) If a zero element in a row or column was chosen arbitrarily for assignment in Step 4(a), there exists
an alternative optimal solution.
(c) If there is no assignment in a row (or column), then this implies that the total number of assignments
are less than the number of rows/columns in the square matrix. In such a situation proceed to
Step 5.

Fig. 10.1
Flow Chart of
Hungarian
Method
314 Operations Research: Theory and Applications

Step 5: Revise the opportunity cost matrix Draw a set of horizontal and vertical lines to cover
all the zeros in the revised cost matrix obtained from Step 3, by using the following procedure:
(a) For each row in which no assignment was made, mark a tick (9)
(b) Examine the marked rows. If any zero element is present in these rows, mark a tick (9) to the respective
columns containing zeros.
(c) Examine marked columns. If any assigned zero element is present in these columns, tick (9) the
respective rows containing assigned zeros.
(d) Repeat this process until no more rows or columns can be marked.
(e) Draw a straight line through each marked column and each unmarked row.
If the number of lines drawn (or total assignments) is equal to the number of rows (or columns), the
current solution is the optimal solution, otherwise go to Step 6.
Zeros in the
assignment table
indicate opportunity
Step 6: Develop the new revised opportunity cost matrix
cost and show the
(a)Among the elements in the matrix not covered by any line, choose the smallest element. Call this
penalty of not
making the least value k.
cost (or best) (b) Subtract k from every element in the matrix that is not covered by a line.
assignment. (c) Add k to every element in the matrix covered by the two lines, i.e. intersection of two lines.
(d) Elements in the matrix covered by one line remain unchanged.

Step 7: Repeat steps Repeat Steps 3 to 6 until an optimal solution is obtained.

The flow chart of steps in the Hungarian method for solving an assignment problem is shown in
Fig. 10.1.
Example 10.1 A computer centre has three expert programmers. The centre wants three application
programmes to be developed. The head of the computer centre, after carefully studying the programmes
to be developed, estimates the computer time in minutes required by the experts for the application
programmes as follows:
Programmers
A B C
1 120 100 180
Programmes 2 180 190 110
3 110 140 120

Assign the programmers to the programmes in such a way that the total computer time is minimum.
Solution: Steps 1 and 2 The minimum time element in rows 1, 2 and 3 is 80, 80 and 110, respectively.
Subtract these elements from all elements in their respective row. The reduced time matrix is shown in Table
10.2(a).
(a) A B C (b) A B C
1 40 20 0 1 40 10 0
2 0 10 30 2 0 0 30
Table 10.2 3 0 30 10 3 0 20 10

In reduced Table 10.2(a) the minimum time element in columns A, B and C is 0, 10 and 0, respectively.
Subtract these elements from all elements in their respective column in order to get the reduced time matrix.
This is shown in Table 10.2(b).
Step 3 (a) Examine all the rows starting from the first, one-by-one, until a row containing single zero
element is found. In Table 10.2(b) rows 1 and 3 have only one zero in the cells (1, C) and (3, A), respectively.
Make an assignment in these cells and cross off all zero elements in the assigned column as shown in Table
10.3(a).

(a) A B C (b) A B C

1 40 20 0 1 40 10 0

2 0 0 30 2 0 0 30
Table 10.3 3 0 30 10 3 0 20 10
 Assignment Problem 315

(b) Now examine each column starting from A in Table 10.3(a). There is one zero in column B in the cell
(2, B). Make an assignment in this cell as shown in Table 10.3(b).
(c) Since the number of assignments (= 3) equals the number of rows (= 3), the optimal solution is
obtained.
The pattern of assignments among programmers and programmes with their respective time (in minutes)
is given below:

Programmer Programme Time (in minutes)

1 C 80
2 B 90
3 A 110
Total 280

Example 10.2 A department of a company has five employees with five jobs to be performed. The time
(in hours) that each man takes to perform each job is given in the effectiveness matrix.

Employees
I II III IV V

A 10 5 13 15 16
B 3 9 18 13 6
Jobs C 10 7 2 2 2
D 7 11 9 7 12
E 7 9 10 4 12

How should the jobs be allocated, one per employee, so as to minimize the total man-hours?
Solution Applying Step 2 of Hungarian algorithm, the reduced opportunity time matrix is shown in Table
10.4(a).

(a) I II III IV V (b) I II III IV V

A 5 0 8 10 11 A 5 0 8 10 11
B 0 6 15 10 3 B 0 6 15 10 3
C 8 5 0 0 0 C 8 5 0 0 0
D 0 4 2 0 5 D 0 4 2 0 5
E 3 5 6 0 8 E 3 5 6 0 8 Table 10.4

Steps 3 and 4: (a) Examine all the rows starting from A, one-by-one, until a row containing only single zero
element is found. Rows A, B and E have only one zero element in the cells (A, II ), (B, I ) and (E, IV ). Make an
assignment in these cells, and cross off all zeros in the assigned columns as shown in Table 10.4(b).
(b) Now examine each column starting from column I. There is one zero in column III, cell (C, III ).
Assignment is made in this cell. Thus cell (C, V ) is crossed off. All zeros in the table are now either
assigned or crossed off as shown in Table 10.4(b). The solution is not optimal because only four
assignments are made.

(a) I II III IV V (b) I II III IV V

A 5 0 8 10 11 A 7 0 8 12 11
B 0 6 15 10 3 9 B 0 4 13 10 1
C 8 5 0 0 0 C 10 5 0 2 0
D 0 4 2 0 5 9 D 0 2 0 0 3
E 3 5 6 0 8 9 E 3 3 4 0 6
Table 10.5
9 9
316 Operations Research: Theory and Applications

Step 5: Cover the zeros with minimum number of lines (= 4) as explained below:
(a) Mark (9) row D where there is no assignment.
(b) Mark (9) columns I and IV since row D has zero element in these columns.
(c) Mark (9) rows B and E since columns I and IV have an assignment in rows B and E, respectively.
(d) Since no other rows or columns can be marked, draw straight lines through the unmarked rows A and
C and the marked columns I and IV, as shown in Table 10.5(a).
Step 6: Develop the revised matrix by selecting the smallest element among all uncovered elements by
the lines in Table 10.5(a); viz., 2. Subtract k = 2 from uncovered elements including itself and add it to
elements 5, 10, 8 and 0 in cells (A, I), (A, IV), (C, I) and (C, IV), respectively, which lie at the intersection
of two lines. The revised matrix, so obtained is shown in Table 10.5(b).
Step 7: Repeat Steps 3 to 6 to find a new solution. The new assignments are shown in Table 10.6.

I II III IV V

A 7 0 8 12 11
B 0 4 13 10 1
C 10 5 0 2 0
D 0 2 0 0 3
Table 10.6 E 3 3 4 0 6

Since the number of assignments (= 5) equals the number of rows (or columns), the solution is optimal.
The pattern of assignments among jobs and employees with their respective time (in hours) is given below:

Job Employee Time (in hours)

A II 5
B I 3
C V 2
D III 9
E IV 4
Total 23

Example 10.3 A solicitors’ firm employs typists on hourly piece-rate basis for their daily work. There
are five typists and their charges and speed are different. According to an earlier understanding only one
job was given to one typist and the typist was paid for a full hour, even if he worked for a fraction of an
hour. Find the least cost allocation for the following data:

Typist Rate per hour No. of Pages Job No. of Pages

(Rs) Typed/Hour
A 5 12 P 199
B 6 14 Q 175
C 3 8 R 145
D 4 10 S 298
E 4 11 T 178

[Delhi Univ., MBA, 2000, 2002]

Solution Develop a cost matrix based on the data of the problem as shown in Table 10.7(a), where elements
represent the cost to be incurred due to assignment of jobs to various typists on a one-to-one basis.

(a) P Q R S T (b) P Q R S T
A 85 75 65 125 75 A 2 2 0 4 0
B 90 78 66 132 78 B 6 4 0 10 2
C 75 66 57 114 69 C 0 1 0 1 2
D 80 72 60 120 72 D 2 4 0 4 2
Table 10.7
E 76 64 56 112 68 E 2 0 0 0 2
 Assignment Problem 317

Applying Step 2 of Hungarian method, the reduced opportunity cost matrix is shown in Table 10.7(b).
To make assignments in Table 10.7(b), examine all the rows starting from A until a row containing only
one zero element is found. Rows B and D have only one zero element in the cells (B, R) and (D, R),
respectively. First make assignment in cells (B, R), and cross off all zeros in the assigned columns as shown
in Table 10.7(b).
Now examine each column starting from column P. There is one zero in columns P, Q, S and T in the
cells (C, P), (E, Q ), (E, S ) and (A, T ). Assignment is made in these cells. All zeros in the matrix are either
assigned or crossed off, as shown in Table 10.8(a).

(a) P Q R S T (b) P Q R S T

A 2 2 0 4 0 A 2 2 2 4 0
B 6 4 0 10 2 9 B 4 2 0 8 0
C 0 1 0 1 2 C 0 1 2 1 2
D 2 4 0 4 2 9 D 0 2 0 2 0
E 2 0 0 0 2 E 2 0 2 0 2
Table 10.8
9

The solution shown in Table 10.8(a) is not optimal since only four assignments are made. Thus, in order
to get the next best solution, apply following steps.
(a) Mark (9) row D since it has no assignment.
(b) Mark (9) column R since row D has zero in this column.
(c) Mark (9) row B since column R has an assignment in row B.
(d) Since no other rows or columns can be marked, therefore draw straight lines through the unmarked
rows A, C and E and marked column R as shown in Table 10.8(a).
Develop the revised cost matrix by selecting the smallest element among all uncovered elements by
the lines (i.e., k = 2) in Table 10.8(a). Subtract this element (k = 2) from all uncovered elements including
itself and add it to elements in the cells (A, R), (C, R) and (E, R), respectively which lie at the intersection
of two lines. Another revised cost matrix so obtained is shown in Table 10.8(b).
Again repeat the procedure to find a new solution. The new assignments are shown in Table 10.9(a).

(a) P Q R S T (b) P Q R S T

A 2 2 2 4 0 9 A 2 1 2 3 0
B 4 2 0 8 0 9 B 4 1 0 7 0
C 0 1 2 1 2 9 C 0 0 2 0 2
D 0 2 0 2 0 9 D 0 1 0 1 0
E 2 0 2 0 2 E 3 0 3 0 3
Table 10.9
9 9 9

The solution shown in Table 10.9(a) is also not optimal since only four assignments are made. Thus, to
get the next best solution, follow Steps 6(a) to (d) of the algorithm to draw a minimum number of horizontal
and vertical lines to cover all zero elements in Table 10.9(a). The new opportunity cost matrix obtained from
Table 10.9(a) by subtracting the smallest element (= l) among all uncovered elements, including itself, by the
lines and adding it to elements at the intersection of two lines is shown in Table 10.9(b).
The new solution obtained by repeating the procedure as explained earlier is shown in Table 10.9(b).
Since both columns Q and S have two zeros, the arbitrary selection of a cell in any of these columns will
give us an alternative solution with same total cost of assignment.
The pattern of assignments among typists and jobs, along with cost is as follows:
318 Operations Research: Theory and Applications

Typist Job Cost (in Rs)

A T 75
B R 66
C S 114
D P 80
E Q 64
Total 399

CONCEPTUAL QUESTIONS A

1. What is an assignment problem? Give two applications. 6. State and discuss the methods of solving an assignment
2. Give the mathematical formulation of an assignment problem. problem. How is the Hungarian method better than other methods
How does it differ from a transportation problem? for solving an assignment problem?
3. Explain the conceptual justification that an assignment problem 7. (a) Give an algorithm to solve an assignment problem.
can be viewed as a linear programming problem. (b) Show that an assignment problem is a special case of a
4. Explain the difference between a transportation problem and an transportation problem.
assignment problem. 8. Explain how an assignment problem can be solved by using the
5. Specify the dual of an assignment problem. What are the transportation approach?
techniques used for solving an assignment problem?

SELF PRACTICE PROBLEMS A

1. Five men are available to do five different jobs. From past To

records, the time (in hours) that each man takes to do each job
is known and is given in the following table: 7 8 9 10 11 12

Jobs 1 31 62 29 42 15 41
I II III IV V 2 12 19 39 55 71 40
3 17 29 50 41 22 22
A 2 9 2 7 1 From 4 35 40 38 42 27 33
B 6 8 7 6 1
5 19 30 29 16 20 23
Men C 4 6 5 3 1 6 72 30 30 50 41 20
D 4 2 7 3 1
E 5 3 9 5 1 How should the trucks be displayed so as to minimize the total
distance travelled?
Find out how men should be assigned the jobs in way that will
minimize the total time taken. 4. An air freight company picks up and delivers freight where
customers want. The company has two types of aircraft, X and
2. A pharmaceutical company producing a single product sold it Y, with equal loading capacities but different operations costs.
through five agencies situated in different cities. All of a sudden, These are shown in the following Table.
there rouse a demand for the product in another five cities that
didn’t any agency of the company. The company is now facing
the problem of deciding on how to assign the existing agencies Type of Aircraft Operating Costs (Rs)
in order to despatch the product to needy cities in such a way Empty Loaded
that the travelling distance is minimized. The distance between the
surplus and deficit cities (in km) is given in the following table. X 1.00 2.00
Y 1.50 3.00
Deficit cities
a b c d e The present four locations of the aircraft that the company has
are; J – X; K – Y; L – Y, and M – X. Four customers of the
A 160 130 115 190 200
company located at A, B, C and D want to transport nearly the
B 135 120 130 160 175 same size of load to their final destinations. The final destinations
Surplus Cities C 140 110 125 170 185 are 600, 300, 1,000 and 500 km from the loading points A, B,
D 50 50 80 80 110 C and D, respectively.
E 55 35 80 80 105 The distances (in km) between the aircraft and the loading
points are as follows:
Determine the optimum assignment schedule. Loading Point
3. A national truck rental service has a surplus of one truck in each
of the cities, 1, 2, 3, 4, 5 and 6; and a deficit of one truck in A B C D
each of the cities 7, 8, 9, 10, 11 and 12. The distances (in km)
J 200 200 400 100
between the cities with a surplus and cities with deficit are
Aircraft K 300 100 300 300
displayed in the table below:
Location L 400 100 100 500
M 200 200 400 200
 Assignment Problem 319

Determine the allocations which minimize the total cost of 9. A shipbuilding company has been awarded a big contract for the
transportation. construction of five cargo vessels. The contract stipulates that
5. A departmental head has four subordinates and four tasks to be the company must subcontract a portion of the total work to at
performed. The subordinates differ in efficiency and the tasks least five small ancillary companies. The company has invited
differ in their intrinsic difficulty. His estimates of the times that bids from the small ancillary companies (A1, A2, A3, A4, and A5)
each man would take to perform each task is given in the matrix to take care of the subcontract work in five fields – materials
below: testing, fabrication, assembly, scrap removal and painting. The
Tasks bids received from the ancillary companies are given in the
I II III IV table.
Subcontract Bids (Rs)
A 8 26 17 11
Ancillary Materials Fabrication Assembly Scrap Painting
B 13 28 4 26 Companies Testing Removal
Subordinates C 38 19 18 15
A1 2,50,000 3,00,000 3,80,000 5,00,000 1,50,000
D 19 26 24 10 A2 2,80,000 2,60,000 3,50,000 5,00,000 2,00,000
A3 3,00,000 3,50,000 4,00,000 5,50,000 1,80,000
How should the tasks be allocated to subordinates so as to
A4 1,50,000 2,50,000 3,00,000 4,80,000 1,20,000
minimize the total man-hours? A5 3,00,000 2,70,000 3,20,000 4,80,000 1,60,000
6. An automobile dealer wishes to put four repairmen to four
different jobs. The repairmen have somewhat different kinds of Which bids should the company accept in order to complete the
skills and they exhibit different levels of efficiency from one job contract at minimum cost? What is the total cost of the
to another. The dealer has estimated the number of man-hours subcontracts?
that would be required for each job-man combination. This is 10. In a textile sales emporium, four salesmen A, B, C and D are
given in matrix form in the following table: available to four counters W, X, Y and Z. Each salesman can
Jobs handle any counter. The service (in hours) of each counter
when manned by each salesman is given below:
A B C D
Salesmen
1 5 3 2 8
A B C D
2 7 9 2 6
Men W 41 72 39 52
3 6 4 5 7
Counters X 22 29 49 65
4 5 7 7 8
Y 27 39 60 51
Find the optimal assignment that will result in minimum man- Z 45 50 48 52
hours needed.
How should the salesmen be allocated to appropriate counters
7. A lead draftsman has five drafting tasks to accomplish and five so that the service time is minimized? Each salesman must
idle draftsmen. Each draftsman is estimated to require the handle only one counter.
following number of hours for each task.
11. A hospital wants to purchase three different types of medical
Tasks equipments and five manufacturers have come forward to
A B C D E supply one or all the three machines. However, the hospital’s
policy is not to accept more than one machine from any one of
1 60 50 100 85 95 the manufacturers. The data relating to the price (in thousand
2 65 45 100 75 90 of rupees) quoted by the different manufacturers is given below:
Draftsmen 3 70 60 110 97 85
Machines
4 70 55 105 90 93
1 2 3
5 60 40 120 85 97
A 30 31 27
If each draftsman costs the company Rs 15.80 per hour, B 28 29 26
including overhead, find the assignment of draftsmen to tasks Manufacturers C 29 30 28
that will result in the minimum total cost. What would be the total D 28 31 27
cost? E 31 29 26
8. A construction company has requested bids for subcontracts on
Determine how best the hospital can purchase the three
five different projects. Five companies have responded. Their
machines. [Delhi Univ., MBA (HCA), 2008]
bids are represented below.
12. The secretary of a school is taking bids on the city’s four school
Bid Amounts (’000s Rs) bus routes. Four companies have made the bids (in Rs), as
I II III IV V detailed in the following table:

1 41 72 39 52 25 Route 1 Route 2 Route 3 Route 4

2 22 29 49 65 81 1 4,000 5,000 – –
Bidders 3 27 39 60 51 40 Bus 2 – 4,000 – 4,000
4 45 50 48 52 37 3 3,000 – 2,000 –
5 29 40 45 26 30 4 – – 4,000 5,000

Determine the minimum cost assignment of subcontracts to Suppose each bidder can be assigned only one route. Use the
bidders, assuming that each bidder can receive only one assignment model to minimize the school’s cost of running the
contract. four bus routes.
320 Operations Research: Theory and Applications

13. A large oil company operating a number of drilling platforms in Based on the marks awarded, what role should each of the
the North Sea is forming a high speed rescue unit in order to trainees be given in the rescue unit?
cope with emergency situations that may occur. The rescue unit 14. The personnel manager of ABC Company wants to assign Mr X,
comprises 6 personnel who, for reasons of flexibility, undergo Mr Y and Mr Z to regional offices. But the firm also has an opening
the same comprehensive training programme. The six personnel in its Chennai office and would send one of the three to that branch
are assessed as to their suitability for various specialist tasks if it were more economical than a move to Delhi, Mumbai or
and the marks they received in the training programme are Kolkata. It will cost Rs 2,000 to relocate Mr X to Chennai, Rs 1,600
given in the following table: to reallocate Mr Y there, and Rs 3,000 to move Mr Z. What is the
optimal assignment of personnel to offices?
Trainee Number
Office
Specialist Task I II III IV V VI
Delhi Mumbai Kolkata
Unit Leader 21 5 21 15 15 28
Helicopter Pilot 30 11 16 8 16 4 Mr X 1,600 2,200 2,400
First Aid 28 2 11 16 25 25 Personnel Mr Y 1,000 3,200 2,600
Drilling Technology 19 16 17 15 19 8 Mr Z 1,000 2,000 4,600
Firefighting 26 21 22 28 29 24
Communications 3 21 21 11 26 26

HINTS AND ANSWERS

1. A – III, B – V, C – I, D – IV, E – II; 6. 1 – B, 2 – C, 3 – D, 4 – A ; 1 – C, 2 – D, 3 – B, 4 – A;

Optimal value = 13 hours. Total man-hours = 17 hours.
2. A – e, B – c, C – b, D – a, E – d; 7. 1 – A, 2 – D, 3 – E, 4 – C, 5 – B;
Minimum distance = 570 km. Minimum cost = Rs 365 × 15.8
4. 1 – 11, 2 – 8, 3 – 7, 4 – 9, 5 – 10, 6 – 12; 8. 1 – V, 2 – II, 3 – I, 4 – III, 5 – IV;
Minimum distance = 125 km. Minimum cost = Rs 155.
5. A – I, B – III, C – II, D – IV; 9. A1 – scrap, A2 – Fabrication, A3 – Painting, A4 – Testing,
Total man-hours = 41 hours. A5 – Assembly; Minimum cost = Rs 14,10,000
10. W – C, X – B, Y – A, Z – D; Optimal value = 147 hours.

10.4 VARIATIONS OF THE ASSIGNMENT PROBLEM

10.4.1 Multiple Optimal Solutions
While making an assignment in the reduced assignment matrix, it is possible to have two or more ways
to strike off a certain number of zeros. Such a situation indicates that there are multiple optimal solutions
with the same optimal value of objective function.

10.4.2 Maximization Case in Assignment Problem

If instead of cost matrix, a profit (or revenue) matrix is given, then assignments are mode in such a way
that total profit is maximized. The profit maximization assignment problems are solved by converting them
into a cost minimization problem in either of the following two ways:
(i) Put a negative sign before each of the elements in the profit matrix in order to convert the profit
values into cost values.
(ii) Locate the largest element in the profit matrix and then subtract all the elements of the matrix from
the largest element including itself.
The transformed assignment problem can be solved by using usual Hungarian method.
Example 10.4 A company operates in four territories, and four salesmen available for an assignment.
The territories are not equally rich in their sales potential. It is estimated that a typical salesman operating
in each territory would bring in the following annual sales:
Territory : I II III IV
Annual sales (Rs) : 1,26,000 1,05,000 84,000 63,000
 Assignment Problem 321

The four salesmen also differ in their ability. It is estimated that, working under the same conditions, their
yearly sales would be proportionately as follows:
Salesmen : A B C D
Proportion : 7 5 5 4
If the criterion is maximum expected total sales, the intuitive answer is to assign the best salesman to the
richest territory, the next best salesman to the second richest, and so on; verify this answer by the
assignment technique. [Delhi Univ., MBA, 2004]
Solution Construct the Effectiveness Matrix: To avoid the fractional values of annual sales of each
salesman in each territory, for convenience, consider their yearly sales as 21 (i.e. the sum of sales
proportions), taking Rs 1,000 as one unit. Now divide the individual sales in each territory by 21 in order
to obtain the required annual sales by each salesman. The maximum sales matrix so obtained is given in
Table 10.10.
Territory
I II III IV Sales Proportion
A 42 35 28 21 7
B 30 25 20 15 5
Salesman
C 30 25 20 15 5 Table 10.10
D 24 20 16 12 4 Effectiveness
Matrix
Sales (in ’000 Rs) 6 5 4 3

Converting Maximization Problem into Minimization Problem: The given maximization assignment
problem (Table 10.10) can be converted into a minimization assignment problem by subtracting from the highest
element (i.e. 42) all the elements of the given table. The new data so obtained is given in Table 10.11(a).

(a) I II III IV (b) I II III IV

A 0 7 14 21 A 0 3 6 9
B 12 17 22 27 B 0 1 2 3 Table 10.11
C 12 17 22 27 C 0 1 2 3 Equivalent Cost
D 18 22 26 30 D 0 0 0 0 Matrix

Apply Hungarian Method to get Optimal Solution: Apply Step 2 of the Hungarian method in order to
get the reduced matrix that has at least one zero, either in a row or column, as shown in Table 10.11(b).
The assignment is made in row A. All zeros in the assigned column I are crossed as shown in Table
10.12. Column II has only one zero, in cell (D, II). Assignment is made in this column, and other zeros are
crossed in row D. Now all zeros are either assigned or crossed off as shown in Table 10.12.

I II III IV

A 0 3 6 9 9
B 0 1 2 3 9
C 0 1 2 3 9
D 0 0 0 0
9 Table 10.12

The solution shown in Table 10.12 is not optimal since only two assignments are made. Draw lines
through marked columns and unmarked rows to cover zeros as shown in Table 10.12.
Develop the revised cost matrix by selecting the minimum element (= 1) among all uncovered elements
by the lines. Subtract 1 from each uncovered element, including itself, and add it to the elements at the
intersection of two lines. A revised cost table so obtained is shown in Table 10.13.
322 Operations Research: Theory and Applications

I II III IV
A 0 2 5 8 9
B 0 0 1 2 9
C 0 0 1 2 9

D 1 0 0 0
Table 10.13
9 9

Repeat Steps 1 to 3 to mark the assignments in Table 10.13. Two alternative optimal assignments are
shown in Tables 10.14(a) and (b).

(a) I II III IV (b) I II III IV

A 0 2 4 7 A 0 2 4 7
B 0 0 0 1 B 0 0 0 1
Table 10.14
Alternative C 0 0 0 1 C 0 0 0 1
Optimal Solutions D 2 1 0 0 D 2 1 0 0

The pattern of two alternative optimal assignments among territories and salesmen with their respective
sales volume (in Rs 1,000) is given in the table.
Assignment Set I Assignment Set II

Salesman Territory Sales (Rs) Salesman Territory Sales (Rs)

A I 42 A I 42
B III 20 B II 25
C II 25 C III 20
D IV 12 D IV 12
Total 99 Total 99

Example 10.5 A marketing manager has five salesmen and five sales districts. Considering the
capabilities of the salesmen and the nature of districts, the marketing manager estimates that the sales per
month (in hundred rupees) for each salesman in each district would be as follows:
Districts
A B C D E
1 32 38 40 28 40
2 40 24 28 21 36
Salesmen 3 41 27 33 30 37
4 22 38 41 36 36
5 29 33 40 35 39

Find the assignment of salesmen to districts that will result in maximum sales.
Solution The given maximization problem can be converted into a minimization problem by subtracting
from the largest element (i.e. 41) all the elements of the given table. The new cost data so obtained is given
in Table 10.15.
(a) A B C D E (b) A B C D E
1 9 3 1 13 1 1 8 0 0 7 0
2 1 17 13 20 5 2 0 14 12 14 4
Table 10.15 3 0 14 8 11 4 3 0 12 8 6 4
Equivalent Cost 4 19 3 0 5 5 4 19 1 0 0 5
Data 5 12 8 1 6 2 5 11 5 0 0 1

Apply Step 2 of the Hungarian method to get the opportunity cost table as shown in Table 10.15(b).
 Assignment Problem 323

Make assignments in Table 10.15(b) by applying Hungarian method as shown in Table 10.16(a).

(a) A B C D E (b) A B C D E

1 8 0 0 7 0 1 12 0 0 7 0
2 0 14 12 14 4 9 2 0 10 8 10 0
3 0 12 8 6 4 9 3 0 8 4 2 0
4 19 1 0 0 5 4 23 1 0 0 5
5 11 5 0 0 1 5 15 5 0 0 1
Table 10.16
9
The solution shown in Table 10.16(a) is not optimal since only four assignments are made. Cover the zeros
with the minimum number of lines (= 4) as shown in Table 10.16(a).
Develop the revised cost matrix by selecting the minimum element (= 4) among all uncovered elements
by the lines. Subtract 4 from all uncovered elements, including itself, and add it to the element at the
intersection of the lines. A revised cost table, so obtained, is shown in Table 10.16(b).
Repeat the above procedure again to make the assignments in the reduced Table 10.16(b). The two
alternative assignments are shown in Tables 10.17(a) and (b). Two more alternative solutions exist due to
presence of zero element in cells (4, C ), (4, D) and cells (5, C ), (5, D).

(a) A B C D E (b) A B C D E

1 12 0 0 7 0 1 12 0 0 7 0
2 0 12 10 12 0 2 0 12 10 12 0
3 0 10 4 2 0 3 0 10 4 2 0
4 23 1 0 0 5 4 23 1 0 0 5
Table 10.17
5 15 5 0 0 1 5 15 5 0 0 1 Alternative
Optimal Solutions
Two alternative optimal assignments are as follows:
Assignment Set I Assignment Set II
Salesman District Sales Salesman District Sales
(in ’000 Rs) (in ’000 Rs)

1 B 38 1 B 38
2 A 40 2 E 36
3 E 37 3 A 41
4 C 41 4 C 41
5 D 35 5 D 35
Total 191 Total 191

10.4.3 Unbalanced Assignment Problem

The Hungarian method for solving an assignment problem requires that the number of columns and rows
in the assignment matrix should be equal. However, when the given cost matrix is not a square matrix, the
assignment problem is called an unbalanced problem. In such cases before applying Hungarian method,
dummy row(s) or column(s) are added in the matrix (with zeros as the cost elements) in order to make it
a square matrix.

10.4.4 Restrictions on Assignments

Sometimes it may so happen that a particular resource (say a man or machine) cannot be assigned to a
particular activity (say territory or job). In such cases, the cost of performing that particular activity by a
324 Operations Research: Theory and Applications

particular resource is considered to be very large (written as M or ∞) so as to prohibit the entry of this
pair of resource-activity into the final solution.
Example 10.6 In the modification of a plant layout of a factory four new machines M1, M2, M3, and
M4 are to be installed in a machine shop. There are five vacant places A, B, C, D and E available. Because
of limited space, machine M2 cannot be placed at C and M3 cannot be placed at A. The cost of locating
a machine at a place (in hundred rupees) is as follows.
Location
A B C D E
M1 9 11 15 10 11
M2 12 9 – 10 9
Machine
M3 – 11 14 11 7
M4 14 8 12 7 8

Find the optimal assignment schedule. [Delhi Univ., MBA, 2004, 2006]
Solution Since cost matrix is not balanced, add one dummy row (machine) with a zero cost elements in
that row. Also assign a high cost, denoted by M, to the pair (M2, C) and (M3, A). The cost matrix so obtained
is given in Table 10.18(a).
Apply Hungarian method for solving this problem. An optimal assignment is shown in Table 10.18(b).

(a) A B C D E (b) A B C D E
M1 9 11 15 10 11 M1 0 2 6 1 2
M2 12 9 M 10 9 M2 3 0 M 1 0
M3 M 11 14 11 7 M3 M 4 7 4 0
M4 14 8 12 7 8 M4 7 1 5 0 1
Table 10.18 M5 0 0 0 0 0 M5 0 0 0 0 0

The total minimum cost (Rs) and optimal assignments made are as follows:

Machine Location Cost (in ’000 Rs)

M1 A 9
M2 B 9
M3 E 7
M4 D 7
M5 (dummy) C 0
Total 32

Example 10.7 An airline company has drawn up a new flight schedule that involves five flights. To
assist in allocating five pilots to the flights, it has asked them to state their preference scores by giving
each flight a number out of 10. The higher the number, the greater is the preference. A few of these flights
are unsuitable to some pilots, owing to domestic reasons. These have been marked with ‘×’.

Flight Number
1 2 3 4 5
A 8 2 × 5 4
B 10 9 2 8 4
Pilot C 5 4 9 6 ×
D 3 6 2 8 7
E 5 6 10 4 3

What should be the allocation of the pilots to flights in order to meet as many preferences as possible?
[AIMA (Dip. in Mgt.), 2005]
 Assignment Problem 325

Solution Since the problem is to maximize the total preference score, in order to apply the Hungarian
method to solve this assignment problem, the equivalent cost matrix is required. This is obtained by
subtracting all the elements of the given matrix from the largest element (= 10) including itself as shown
in Table 10.19.
1 2 3 4 5
A 2 8 M 5 6
B 0 1 8 2 6
C 5 6 1 4 M Table 10.19
D 7 4 8 2 3 Equivalent Cost
E 5 4 0 6 7 Matrix

Perform the Hungarian method on Table 10.19 to make assignments as shown in Table 10.20.

1 2 3 4 5

A 0 5 M 3 3

B 0 0 8 2 5

C 4 4 0 3 M 9

D 5 1 6 0 0

E 5 3 0 6 6 9 Table 10.20
Opportunity Cost
9 Table

The solution shown in Table 10.20 is not the optimal solution because there is no assignment in row
E. Draw minimum number of lines to cover all zeros in the table and then subtract the smallest element
(= 3) from all uncovered elements including itself and add it to the element at the intersection of two lines.
The new table so obtained is shown in Table 10.21.

1 2 3 4 5

A 0 5 M 3 3

B 0 0 11 2 5

C 1 1 0 0 M

D 5 1 9 0 0

E 2 0 0 3 3 Table 10.21

Repeat the Hungarian method to make assignments in Table 10.21. Since the number of assignments
in Table 10.21 is equal to the number of rows or columns, this solution is the optimal solution. The optimal
assignment is as follows:
Pilot Flight Number Preference Score

A 1 8
B 2 9
C 4 6
D 5 7
E 3 10
Total 40

Example 10.8 A city corporation has decided to carry out road repairs on four main arteries of the city.
The government has agreed to make a special grant of Rs 50 lakh towards the cost with a condition that
the repairs be done at the lowest cost and quickest time. If the conditions warrant, a supplementary token
grant will also be considered favourably. The corporation has floated tenders and five contractors have sent
in their bids. In order to expedite work, one road will be awarded to only one contractor.
326 Operations Research: Theory and Applications

Cost of Repairs (Rs in lakh)

R1 R2 R3 R4
C1 9 14 19 15
C2 7 17 20 19
Contractors/Road C3 9 18 21 18
C4 10 12 18 19
C5 10 15 21 16

(a) Find the best way of assigning the repair work to the contractors and the costs.
(b) If it is necessary to seek supplementary grants, what should be the amount sought?
(c) Which of the five contractors will be unsuccessful in his bid? [AMIE 2005]
Solution (a) Since cost matrix is not balanced, therefore add one dummy column (road, R5) with a zero
cost elements. The revised cost matrix is given in Table 10.22.

R1 R2 R3 R4 R5

C1 9 14 19 15 0
C2 7 17 20 19 0
C3 9 18 21 18 0

Table 10.22 C4 10 12 18 19 0
Cost Matrix C5 10 15 21 16 0

Apply the Hungarian method to solve this problem. This is left as an exercise for the reader. An optimal
assignment is shown in Table 10.23.

R1 R2 R3 R4 R5

C1 1 1 0 0 1

C2 0 5 2 5 2

C3 0 4 1 2 0
C4 3 0 0 5 2
Table 10.23
Optimal Solution C5 1 1 1 0 0

The total minimum cost (in rupees) and optimal assignment made are as follows:

Road Contractor Cost (Rs in lakh)

R1 C2 7
R2 C4 12
R3 C1 19
R4 C5 16
R5 C3 0
Total 54

(b) Since the total cost exceeds 50 lakh, the excess amount of Rs 4 lakh (= 54 – 50) is to be sought
as supplementary grant.
(c) Contractor C3 who has been assigned to dummy row, R5 (roads) loses out in the bid.
 Assignment Problem 327

CONCEPTUAL QUESTIONS B

1. Can there be multiple optimal solutions to an assignment 3. Explain how can one modify an effectiveness matrix in an
problem? How would you identify the existence of multiple assignment problem, if a particular assignment is prohibited.
solutions, if any? 4. What is an unbalanced assignment problem? How is the
2. How would you deal with the assignment problems, where (a) Hungarian method applied for obtaining a solution if the matrix
the objective function is to be maximized? (b) some assignments is rectangular?
are prohibited?

SELF PRACTICE PROBLEMS B

1. A project work consists of four major jobs for which an equal available to replace one of the existing ones and the associated
number of contractors have submitted tenders. The tender of that machine costs are also given below.
amount quoted (in lakh of rupees) is given in the matrix. Machines
Job M1 M2 M3 M4 M5 M6
a b c d
W1 12 3 6 – 5 9
1 10 24 30 15
W2 4 11 – 5 – 8
Contractor 2 16 22 28 12
Workers W3 8 2 10 9 7 5
3 12 20 32 10
4 9 26 34 16 W4 – 7 8 6 12 10
W5 5 8 9 4 6 1
Find the assignment which minimizes the total cost of the project
when each contractor has to be assigned at least one job. (a) Determine whether the new machine can be accepted.
2. Alpha Corporation has four plants, each of which can manufacture (b) Also determine the optimal assignment and the associated
any one of four products A, B, C or D. Production costs differ saving in cost.
from one plant to another and so do the sales revenue. The 5. A fast-food chain wants to build four stores. In the past, the
revenue and the cost data are given below. Determine which chain has used six different construction companies, and having
product should each plant produce in order to maximize profit. been satisfied with each, has invited each to bid on each job.
Sales Revenue (in ’000 Rs) The final bids (in lakh of rupees) are shown in the following table:
Plant
Construction Companies
1 2 3 4
1 2 3 4 5 6
A 50 68 49 62
Product B 60 70 51 74 Store 1 85.3 88.0 87.5 82.4 89.1 86.7
C 52 62 49 68 Store 2 78.9 77.4 77.4 76.5 79.3 78.3
D 55 64 48 66 Store 3 82.0 81.3 82.4 80.6 83.5 81.7
Store 4 84.3 84.6 86.2 83.3 84.4 85.5
Production Cost (in ’000 Rs)
Plant
Since the fast-food chain wants to have each of the new stores
1 2 3 4
ready as quickly as possible, it will award at the most one job to
A 49 60 45 61 a construction company. What assignment would result in
Product B 55 63 45 49 minimum total cost to the fast-food chain?
C 55 67 53 70 [Delhi Univ., MBA, 2001, 2003]
D 58 65 54 68 6. A methods engineer wants to assign four new methods to three
work centres. The assignment of the new methods will increase
3. A company has four machines that are to be used for three jobs. production. The methods are given below.
Each job can be assigned to one and only one machine. The
cost of each job on each machine is given in the following table. Increase in Production (unit)
Machines Work Centres
W X Y Z
A B C
A 18 24 28 32
Jobs B 8 13 17 18 1 10 17 8
C 10 15 19 22 2 18 19 7
Method 3 17 12 6
What are the job-assignment pairs that shall minimize the cost? 4 10 10 8
[Gauhati, MCA, 2001] If only one method can be assigned to a work centre, determine
4. Five workers are available to work with the machines and the the optimum assignment.
respective costs (in rupees) associated with each worker- 7. Consider a problem of assigning four clerks to four tasks. The
machine assignment are given below. A sixth machine is time (hours) required to complete the task is given below:
328 Operations Research: Theory and Applications

Tasks Territory
A B C D 1 2 3 4 5
1 4 7 5 6 A 75 80 85 70 90
2 – 8 7 4 Salesmen B 91 71 82 75 85
Clerks C 78 90 85 80 80
3 3 – 5 3
4 6 6 4 2 D 65 75 88 85 90

Clerk 2 cannot be assigned task A and clerk 3 cannot be Suggest optimal assignment of the salesmen. If for certain
assigned task B. Find all the optimum assignment schedules. reasons, salesman D cannot be assigned to territory 3, will the
optimal assignment be different? If so, what would be the new
8. The marketing director of a multi-unit company is faced with a assignment schedule? [Delhi Univ., MCom, 2000]
problem of assigning 5 senior managers to six zones. From past 12. The personnel manager of a medium-sized company has
experience he knows that the efficiency percentage judged by decided to recruit two employees D and E in a particular section
sales, operating costs, etc., depends on the manager-zone of the organization. The section has five fairly defined tasks 1,
combination. The efficiency of different managers is given below: 2, 3, 4 and 5; and three employees A, B and C are already
Zones employed in the section. Considering the specialized nature of
task 3 and the special qualifications of the recruit D for task 3,
I II III IV V VI
the manager has decided to assign task 3 to employee D and
A 73 91 87 82 78 80 then assign the remaining tasks to remaining employees so as
B 81 85 69 76 74 85 to maximize the total effectiveness. The index of effectiveness
Manager C 75 72 83 84 78 91 of each employee of different tasks is as under.
D 93 96 86 91 83 82
Tasks
E 90 91 79 89 69 76
1 2 3 4 5
Find out which zone should be managed by a junior manager A 25 55 60 45 30
due to the non-availability of a senior manager. B 45 65 55 35 40
9. A head of department in a college has the problem of assigning Employees C 10 35 45 55 65
courses to teachers with a view to maximize educational D 40 30 70 40 60
quality in his department. He has available to him one professor, E 55 45 40 55 10
two associate professors, and one teaching assistant (TA).
Four courses must be offered. After appropriate evaluation, he Assign the tasks for maximizing total effectiveness. Critically
has arrived at the following relative ratings (100 = best rating) examine whether the decision of the manager to assign task 3
regarding the ability of each instructor to teach each of the four to employee D was correct. [Delhi Univ., MBA, 2003]
courses.
13. The casualty medical officer of a hospital has received four
Course 1 Course 2 Course 3 Course 4
requests for Ambulance van facility. Currently, six vans are
Prof. 1 60 40 60 70 available for assignment and their estimated response time (in
Prof. 2 20 60 50 70 minutes) are shown in the table below:
Prof. 3 20 30 40 60 Van
TA 30 10 20 40
1 2 3 4 5 6
How should he assign his staff to the courses in order to realize 1 16 15 13 14 15 18
his objective? [Delhi Univ., MBA (HCA), 1999] 2 18 16 12 13 17 16
10. At the end of a cycle of schedules, a transport company has Incident 3 14 14 17 16 15 15
a surplus of one truck in each of the cities 1, 2, 3, 4, 5 and a 4 13 17 19 18 14 17
deficit of one truck in each of the cities A, B, C, D, E and F.
The distance (in kilometres) between the cities with a surplus, Determine which van should respond, and what will be the
and cities with a deficit, is given below: average response time. [Delhi Univ., MBA (HCA), 1990, 96, 98]
To City 14. To stimulate interest and provide an atmosphere for intellectual
discussion a finance faculty in a management school decides to
A B C D E F
hold special seminars on four contemporary topics: Leasing,
1 80 140 180 100 156 198 portfolio management, private mutual funds, swaps and options.
2 48 164 194 126 170 100 Such seminars are to be held be held once par week in the
From City 3 56 180 120 100 170 164 afternoons. However, scheduling these seminars (one for each
4 99 100 1,100 104 180 190 topic, and not more than one seminar per afternoon) has to be
5 64 180 190 160 160 170 done carefully so that the number of students unable to attend
is kept to a minimum. A careful study indicates that the number
How should the trucks be despatched so as to minimize the total of students who cannot attend a particular seminar on a specific
distance travelled? Which city will not receive a truck? day is as follows:
[Madras, MBA, 2000]
11. A company is considering expanding into five new sales territories.
The company has recruited four new salesmen. Based on the
salesmen’s experience and personality traits, the sales manager
has assigned ratings to each of the salesmen for each of the
sales territories. The ratings are as follows:
 Assignment Problem 329

• Chandru swims all styles: back 1 : 10, butterfly 1 : 12, free

Leasing Portfolio Private Swaps
style 1 : 05 and breast stroke 1 : 20.
Management Mutual and
• Dorai swims only the butterfly 1 : 11, while Easwar swims
Funds Options
the back stroke 1 : 20, breast stroke 1 : 16, free style 1
Monday 50 40 60 20 : 06 and the butterfly 1 : 10.
Tuesday 40 30 40 30 Which swimmer should be assigned which swimming style?
Wednesday 60 20 30 20 Who will not be in the relay?
Thursday 30 30 20 30 16. (a) At the end of a cycle of schedules, a trucking company has
Friday 10 20 10 30 a surplus of one vehicle in each of the cities
– 1, 2, 3, 4 and 5 and a deficit of one vehicle in each of the cities
Find an optimal schedule of the seminars. Also find out the total A, B, C, D, E and F. The cost (in rupees) of transportation and
number of students who will be missing at least one seminar. handling between the cities with a surplus and the cities with
15. Five swimmers are eligible to compete in a relay team that is deficits are shown in the following table:
to consist of four swimmers swimming four different swimming To City
styles. The styles are – back stroke, breast stroke, free style
A B C D E F
and butterfly. The time taken by the five swimmers – Anand,
Bhasker, Chandru, Dorai and Easwar, to cover a distance of 1 134 116 167 233 164 097
100 metres in various swimming styles is given below, in 2 114 195 260 166 178 130
minutes, seconds. From City 3 129 117 048 094 066 101
• Anand swims the back stroke in 1 : 09, the breast stroke 4 071 156 092 143 114 136
in 1 : 15 and has never competed in the free style or 5 097 134 125 083 142 118
butterfly.
Find the assignment of surplus vehicles to deficit cities that will
• Bhasker is a free style specialist averaging 1 : 01 for the result in a minimum total cost? Which city will not receive a
100 metres but can also swim the breast stroke in 1 : 16 vehicle? [Delhi Univ., MBA, 2002]
and butterfly in 1 : 20.

HINTS AND ANSWERS

1. (i) 1 – b, 2 – c, 3 – d, 4 – a, 7. (i) 1 – B, 2 – D, 3 – A, 4 – C
(ii) 1 – c, 2 – b, 3 – d, 4 – a; Minimum cost = Rs 71,00,000. (ii) 1 – C, 2 – D, 3 – A, 4 – B. Minimum hours = 18.
(iii) 1 – c, 2 – d, 3 – b, 4 – a, 8. A – III, B – II, C – III, D – I, E – IV, dummy – V.
(iv) 1 – b, 2 – c, 3 – d, 4 – a 9. (i) Prof. 1 – Course 3, Prof. 2 – Course 2, Prof. 3 – Course 4,
2. Construct the profit matrix using the relationship: Profit = T.A. – Course 1
Revenue – Cost (ii) Prof. 1 – Course 1, Prof. 2 – Course 2, Prof. 3 – Course 4,
A – 2, B – 4, C – 1, D – 3 and Maximum profit = Rs 42,000 T.A. – Course 3. Maximum educational quality = 210.
3. (i) A – W, B – X, C – Y, 10. 1 – E, 2 – B, 3 – A, 4 – F, 5 – D; Cost = Rs 326.
(ii) A – W, B – Y, C – X. Minimum cost = Rs 50. 11. A – 5, B – 1, C – 2, D – 3; 359.
4. (a) W1 – M5, W2 – M6, W3 – M2, W4 – M4, W5 – M1 and W6 12. A – 4, B – 2, C – 5, D – 3, E – 1; 300.
(dummy) – M3; Minimum cost = Rs 21 15. The assignment matrix with time expressed in seconds and
(b) W1 – M5, W2 – M1, W3 – M2, W4 – M3 and W5 – M4, adding a dummy style to balance it is given by
Minimum cost = Rs 23.
Back Stroke Breast Stroke Free Style Butterfly
The sixth machine should be accepted because saving in
cost is Rs (23 – 21) = Rs 2 Anand 69 75 – –
5. S1 – 4, S2 – 3, S3 – 2, S4 – 1; Cost = Rs 325.4 Bhasker – 76 61 80
Chandru 70 80 65 72
6. (i) 1 – A, 2 – dummy, 3 – B, 4 – C
Dorai – – – 71
(ii) 1 – C, 2 – dummy, 3 – B, 4 – A. Total production = 30 Easwar 80 76 66 70
units