M.B.A.

Semester - I Operation Research Unit 2: Transportation Problem: It involves a large number of shipping routes from several supply origins to several demand destinations. The objective is to minimize the transportation cost or time. General Transportation Table From S1 S2 . . Sm Demand bj To D1 c11 x11 c21 x21 . . cm1 xm1 b1 b2 . . cm2 xm2 .. bn c22 x22 . . .. . . cmn xmn Total Supply = Total Demand D2 c12 x12 .. c2n x2n . . am .. .. Dn c1n x1n a2 Supply ai a1

In this problem there are (m + n) constraints. x11, x12 etc. are allocations. A necessary and sufficient condition for the existence of a feasible solution to the transportation problem is Total Supply = Total Demand or

a = b
i =1 i j =1

(Also called rim conditions)

The number of basic variables (positive allocations) in any basic feasible solution are m + n 1 satisfying all the rim conditions.

Remarks: 1. When the total supply equals total demand, the problem is called a balanced transportation problem, otherwise 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. When the number of positive allocations at any stage of the feasible solutions is less than the required number (rows + columns 1), the solution is said to be degenerate, otherwise non-degenerate.

2.

3.

Cells in the transportation table having positive allocation will be called occupied cells, otherwise empty or non-occupied cells.

Algorithm to obtain an optimal solution of Transportation Problem using Transportation Method: Step 1:Construct a transportation table. Step 2:Obtain an initial basic feasible solution using any one of the following methods. (i) North West Corner Method (ii) Least Cost Method (iii) Vogels Approximation (or Penalty) Method Step 3:Test the initial solution obtained in Step 2 for optimality using Modified Distribution (MODI) method (Also called uv method). If the current solution is optimal, then stop. Otherwise determine a new improved solution. Step 4:Repeat Step 3 until an optimal solution is reached. Methods for Finding Initial Solution: (1) North West Corner Method (NWCM) Step 1:Start with the cell at the upper left (north west) corner of the transportation matrix and allocate as much as possible equal to the minimum of the rim values for the first row and first column, i.e. min (a1, b1) Step 2:(a) If allocation made in Step 1 is equal to the supply available then move vertically down to the next row and same column and apply Step 1 again, for next allocation. (b) If allocation made in Step 1 is equal to the demand of the destination then move horizontally to the next column and same row and apply Step 1 again, for next allocation. (c) If allocation is equal to the demand and supply available then move diagonally, for the next allocation. 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, supply equals demand, then next allocation of magnitude zero can be made in a cell either in the next row or column. This condition is known as degeneracy.

(2) Least Cost Method (LCM):

Step 1:Select the cell with the lowest unit cost in the entire transportation table and allocate as much as possible to this cell and eliminate that row or column in which either supply or demand is exhausted. If both row and a column are satisfied simultaneously, only one may be crossed out. In case the smallest unit cost cell is not unique, then select the cell where maximum allocation can be made. Step 2: After adjusting the supply and demand for all uncrossed-out rows and columns repeat the procedure with the next lowest unit cost among the remaining rows and columns of the table and allocate as much as possible to this cell and eliminate that row and column in which either supply or demand is exhausted. Step 3: Repeat the procedure until the entire available supply at various sources and demand at various destinations is satisfied. (3) Vogels Approximation Method (VAM): Step 1:Calculate penalties for each row (column) by taking the difference between the smallest and next smallest unit transportation cost in the same row (column). (Note: This difference indicates the penalty or extra cost which has to be pied if one 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 having the least cost in the selected row or column satisfying the rim conditions. If there is a tie in the values of penalties, it can be broken by selecting the cell where 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 entire available supply at various sources and demand at various destinations are satisfied. Test for Optimality using MODI method: Remark: For a given basic feasible solution if we associate numbers ui (i = 1, 2, , m) and vj (j = 1, 2, , n) with row i and column j of the transportation table, respectively, satisfying the equation ui + vj = cij for each occupied cell (i, j),

then ui and vj are called dual variables or multipliers.

For each unoccupied cell (r, s) if we associate numbers drs satisfying equation drs = crs (ur + vs), then drs are called opportunity cost. Steps of MODI Method: The initial solution can be obtained by any of the three methods discussed earlier. Step 1:For an initial basic feasible solution with m + n 1 occupied cells, calculate ui and vj for rows and columns using the relationship ui + vj = cij for each occupied cell (i, j).

Note: To start with, any one of uis or vjs is assigned the value zero. It is better to assign zero for a particular ui or vj where there are maximum number of allocations in a row or column respectively, as it will reduce arithmetic work considerable. Step 2: For unoccupied cells, calculate opportunity cost by using the relationship dij = cij (ui + vj) Step 3: Examine sign of each dij (i) (ii) (iii) If dij > 0, then current basic feasible solution is optimal. If dij = 0, then current basic feasible solution will remain unaffected but an alternative solution exists. If one or more dij < 0, then an improved solution can be obtained by entering unoccupied cell (i, j) in the basis. An unoccupied cell having the largest negative value of dij is chosen for entering into the solution mix.

Step 4:Construct a closed path (or loop) for the unoccupied cell with largest negative opportunity cost. Start 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 minus sign () and continue down the column (or row) to an occupied cell and 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 and add it to other 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 the revised solution further for optimality. The procedure terminates when all dij 0, for unoccupied cells. Assignment Problem: Given n resources (or facilities) and n activities ( or jobs), and effectiveness (in terms of cost, profit, time, etc.), of each resource (facility) for each activity (job), the problem lies in assigning each resource to one and only one activity (job) so that the given measure of effectiveness is optimized. Data Matrix Resources (Workers) W1 W2 . . Wn Demand J1 c11 x11 c21 x21 . . cn1 xn1 1 Activities (jobs) J2 .. c12 .. x12 c22 .. x22 . . . . cn2 .. xn2 1 .. Jn c1n x1n c2n x2n . . cnn xnn 1 n . . 1 1 Supply 1

xij denote the assignment of facility i to job j such that xij = 1 if facility i is assigned to job j = 0 otherwise. Solution methods of Assignment Problem: (i) (ii) (iii) (iv) Enumeration method Simplex method Transportation method Hungarian method

Hungarian Method: Step 1:Develop the cost table from the given problem. If the number of rows are not equal to the number of columns and vice versa, a dummy row or dummy column must be added. The assignment cost for dummy cells are always zero. Step 2: Find the opportunity cost table

(a) (b)

Locate the smallest element in each row of the given cost table and then subtract that from each element of that row, and In the reduced matrix obtained, locate the smallest element in each column and then subtract that from each element of that column.

Step 3:Make assignments in the opportunity cost matrix (a) Examine rows successively until a row with exactly one unmarked zero is obtained. Make an assignment to this single zero by making a square around it. (b) For each zero value that becomes assigned, eliminate (strike off) all other zeros in the same row and/or column. (c) Repeat 3(a) and 3(b) for each column also with exactly single zero value cell that has not been assigned. (d) If a row and/or column has two or more unmarked zeros and one cannot be chosen by inspection, then choose the assigned zero cell arbitrarily. (e) Continue this process until all zeros in rows/columns are either enclosed (assigned) or struck off. Step 4:Optimality criterion If the number of assigned cells is equal to the number of rows/columns, then it is an optimal solution. The total cost associated with this solution is obtained by adding original cost figures in the occupied cells. If a zero cell was chosen arbitrarily in Step 3, there exists an alternative optimal solution. But if no optimal solution is found, then go to Step 5. Step 5:Revise the opportunity cost table Draw a set of horizontal and vertical lines to cover all the zeros in the revised cost table obtained from Step 3, by using the following procedure: (a) For each row in which no assignment was made, mark a tick (b) Examine the marked rows. If any zero cell occurs in those rows, mark a tick to the respective columns that contain those zeros. (c) Examine marked columns. If any assigned zero occurs in those columns, tick the respective rows that contain those 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. Step 6:Develop the new revised opportunity cost table (a) From among the cells not covered by any line, choose the smallest element. Call this value k. (b) Subtract k from every element in the cell not covered by line. (c) Add k to every element in the cell covered by the two lines, i.e. intersection of two lines. (d) Elements in cells covered by one line remain unchanged. Step 7:Repeat Steps 3 to 6 until an optimal solution is obtained.