1. A company has four warehouses, a, b, c and d.

It is required to deliver a product from these warehouses to three

customers
A, B and C. The warehouses have the following amounts in stock:

Warehouse W X Y Z
No. of units 15 16 12 13

and the customers’ requirements are

Customer A B C
No. of units 18 20 18

The table below shows the costs of transporting one unit from warehouse to the customer.

Warehouse / W X Y Z
Customer
A 8 9 6 3
B 6 11 5 10
C 3 8 7 9

Find the optimal transportation routes

2. A company has three factories, say F1,F2, and F3 that are feeding 5 zones – North, South,
Eastern, Western and central-whose monthly demands are 20, 30, 25,25 and 20 thousands
unit respectively. The cost of transporting one unit from each factory to each destination are
given below:

Fact Zone
ory
No So East West Cent
rth uth ern ern ral

F1 5 4 7 10 12

F2 13 10 7 5 6

F3 12 9 8 7 10

If the factories
capacities are 40, 30 and 50 thousands units respectively, then make a transportation Model
and find its initial solution using NWCR, LCM and VAM

3. A company has four terminals S,T,U and V. At the start of a particular day 10, 14, 6 and 5
trailers respectively are available at these terminals. During the previous night 13, 10, 6 and
6 trailers respectively were loaded at plants A, B, C and DD, the company despatcher has
come up with the costs between the terminals and plants are as follows:

Terminals Plants
A B C D
S 20 36 10 28
T 40 20 45 20
U 75 35 45 50
V 30 35 40 25
 Find the allocation of loaded trailers from plants to terminals in order to minimise
transportation cost.

9. A company has three factories at Amethi, Baghpat and Gwalior that have a production capacity of 5,000, 6,000, and 2,500
tonnes, respectively. Four distribution centres at Allahabad, Bombay, Kolkata and Delhi, require 6,000 tonnes, 4,000 tonnes,
2,000 tonnes and 1,500 tonnes, respectively, of the product.

The transportation costs per tonne from different factories to different centres are given below:

Distribution Centres / Allahabad Bombay Kolkata Delhi

Factories
Amethi 3 2 7 6
Baghpat 7 5 2 3
Gwalior 2 5 4 5

Suggest an optimum transportation schedule and find the minimum cost of transportation.

11. A baking firm can produce a special bread in either of its two
plants, the details of which are as follows:
Plant Production Capacity Production Cost
Loaves Rs/Loaf
A 2,500 2.30
B 2,100 2.50
Four restaurant chains are willing to purchase this bread; their
demand and the prices they are willing to pay are as follows:
Chain Maximum Demand Price Offered
Loaves Rs/Loaf
1 1,800 3.90
2 2,300 3.70
3 0,550 4.00
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
chain is:
Chain 1 Chain 2 Chain 3 Chain 4
Plant A 6 8 11 9
Plant B 12 6 8 5
Determine a delivery schedule for the baking firm that will
maximize its profit from this bread.
Write the dual of this transportation problem and use it for
checking the optimal solution to the given problem.
[Delhi Univ., MBA, 2005]
HINTS AND ANSWERS
1. The initial solution obtained by VAM is also the optimal
solution: x11 = 50, x12 = 100, x21 = 150, x33 = 150,
x42 = 100, x43 = 50. Maximum total tonnage = 3,300.
2. (A, b) = 5, (A, d ) = 13, (B, b) = 8, (B, c) = 12, (C, a ) = 15
and (C, b) = 3, Total cost = Rs 301.
3. (I, B) = 45, (I, F ) = 15, (II, A) = 17, (II, D) = 18,
(III, A) = 5, (III, C) = 20 and (III, E) = 15,
Total cost = Rs 290.
4. (a) (A, F ) = 100, (B, F ) = 70, (B, I ) = 80, (C, E ) = 90,
(C, G) = 50, (C, I ) = 40, (D, H) = 210, (D, I ) = 70,
Total cost = Rs 6,600.
(b) When transportation cost from A to G is reduced to 10, the
optimal schedule given in (a) remains unchanged.
5. x11 = 15, x14 = 5, x22 = 19, x24 = 9, x33 = 13, x34 = 4, Total
cost = Rs 209.
6. x11 = 5, x12 = 10, x13 = 20, x14 = 5, x21 = 20, x34 = 25,
x35 = 15, Total cost = Rs 3,650.
7. x12 = 2, x13 = 4, x15 = 2, x21 = 4, x31 = 1, x34 = 6, x35 = 1,
Total cost = Rs 720.
8. x11 = 10,000, x14 = 10,000, x22 = 18,000, x23 = 6,000,
x24 = 14,000, x33 = 16,000, Total cost = Rs 1,66,000.
9. x11 = 3,500, x12 = 1,500, x22 = 2,500, x23 = 2,000, x24 = 1,500,
x31 = 2,500, Total cost = Rs 39,500.
10. (a) The solution is feasible because it satisfies supply and
demand constraints.
(b) The solution is non-degenerate because the number of
occupied cells are equal to the required number of
(m + n – 1) of occupied cells in the solution.
(c) Solution is optimal.
(d) The problem has alternative optimal solution because
opportunity cost for cell (B, III) is zero;
x11 = 10, x21 = 15, x23 = 5, x24 = 5, x31 = 10 and x32 = 10,
Total cost = Rs 235.
(e) If cell (B, III) has a unit cost of 6, the opportunity cost
in this cell will be – 1 and, therefore, the given solution will
not be optimal. The new solution obtained will be:
x13 = 10, x21 = 15, x23 = 5, x24 = 5, x31 = 10, x32 = 10,
Total cost = Rs 230.
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

i
m
ai
1 = 
j
n
bj
1
But a situation may arise when the total available supply is not equal to the total demand [For proof see
appendix]. The following two cases may arise:
(a) If the total supply exceeds the total demand, then an additional column (called a dummy demand centre)
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:
A dummy source
or destination is
added to balance
transportation
problem where
demand is not equal
to supply.
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
ABC
X488
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
W4880
35 41 76
X 16 24 16 0
62 20 82
Y 8 16 24 0
72 5 77
Demand 72 102 41 20 235
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 (+)–8 20 82
Y 8 16 24 0 u3 = 16
72 5 +8 +8 77
Demand 72 102 41 20 235
vj v1 = – 8 v2 = 0 v3 = 0 v4 = – 24
Table 9.25
Initial Solution
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
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
Factories
B 10 8 7 5
C 13 3 9 12
D4683
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
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.
Table 9.27
Optimal Solution
Table 9.28
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
Demand 25 35 105 20 15 200
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
+12
30
+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
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
path for every occupied cell. Also, the values of dual variables ui and vj that are used to test the optimality
cannot be computed. Thus, degeneracy needs to be removed in order to improve the given solution. The
degeneracy in the transportation problems may occur at two stages:
(a) At initial basic feasible solution the number of occupied cells may be less than m + n – 1 allocations.
(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 (epsilon) or (delta). This quantity
Table 9.29
Initial Solution
Table 9.30
Degeneracy arises
when the number of
occupied cells are
less than the
number of rows +
columns – 1.
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 25 22
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
538
S2 4 7 7 6 5
415
S3 8 4 6 6 4
459
Sexcess 0 0 0 0 0
33
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.
Table 9.31
Initial Solution,
but Degenerate
Transportation Problem 285
D1 D2 D3 D4 D5 Supply ui
S1 5 8 6 6 3
8
u1 = 0
+3 +5 (–) 5
+2
3 (+)
S2 4 7 7 6 5
5
u2 = 2
4 +2 – 1
1 (+) (–)
S3 8 4 6 6 4
9
u3 = 1
+5
4
– 1 +1
5
Sexcess 0 0 0 0 0
3
u4 = – 4
+2 +1 (+) – 2
3
(–) +1 1
Demand 4 4 5 4 8 25
vj v1 = 2 v2 = 3 v3 = 6 v4 = 4 v5 = 3
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
8
u1 = 0
+1 +5 (–) 5
0
3 (+)
S2 4 7 7 6 5
5
u2 = 0
4
+4 +1
1
+2
S3 8 4 6 6 4
9
u3 = 1
+3
4
–1 (+)
–1
5 (–)
Sexcess 0 0 0 0 0
3
u4 = – 6
+2 +3
(+) 3 (–)
+3
Demand 4 4 5 4 8 25
vj v1 = 4 v2 = 3 v3 = 6 v4 = 6 v5 = 3
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
88
S2 4 7 7 6 5
415
S3 8 4 6 6 4
4239
Sexcess 0 0 0 0 0
33
Demand 4 4 5 4 8 25
Table 9.32
Table 9.33
Table 9.34
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.
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.
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.
D1 D2 D3 Supply
S1 8 5 6
120 120
S2 15 10 12
30 50 80
S3 3 9 10
30 50 80
Demand 150 80 50 280
Table 9.35
Initial Solution
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
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
Demand 150 80 50 280
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.
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.
Table 9.37
Degenerate
Solution
D1 D2 D3 Supply
S1 8 5 6
120
70 50
S2 15 10 12
80
80
S3 3 9 10
80
80
Demand 150 80 50 280
Table 9.38
Optimal Solution
Table 9.39
A B C Dexcess Supply ui
W4880
76 u1 = – 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
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.
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.
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
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
(+) 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
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
Demand 72 102 41 20 235
vj v1 = 16 v2 = 24 v3 = 16 v4 = 0
Table 9.40
Optimal Solution
Table 9.41
Alternative
Optimal Solution
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
D957
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
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
(+) 0
80 (–) +12 80 u3 = 7
D957
(–) 40 20 (+) + 6 60 u4 = 9
Dummy 0 0 0
50 + 4 + 8 50 u5 = 0
Demand 120 100 110 330
vj v1 = 0 v2 = – 4 v3 = – 8
Table 9.42
Table 9.43
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
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.
Table 9.44
Transportation Problem 291
RST
RST
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
Demand 300 700 900 800 500 3,200
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
II
R2 700 – 700 – –
O2 Nil
III
R3 700 – – 700 –
O3 Nil
IV 700 – – – 700
Demand 300 700 900 800
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:
Table 9.45
Optimal Solution
Table 9.46
Production
Schedule
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

RST
RST
The production schedule is given in Table 9.48.
Production Units For Use in Month
in Month M1 M2 M3
M1
R1 50 50 – –
O1 30 10 20 –
M2 R2 50 – 50 –
R3 60 – 20 40
M3 O3 30 – 30 –
Demand 60 120 40
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
summarized
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:
Table 9.48
Production
Schedule
M1 M2 Dummy Supply
5.0 5.5 0
M1 800 120 920
6.25 6.75 0
M1(OT) 110 140 250
∞5.0 0
M2 920 920
∞6.25 0
M2(OT) 250 250
Demand 800 1,400 140
Table 9.50
Optimal Solution
M1 M2 Dummy Supply
5.0 5.5 0
M1 800 120 920
6.25 6.75 0
M1(OT) 250 250
∞5.0 0
M2 920 920
∞6.25 0
M2(OT) 110 140 250
Demand 800 1,400 140
Table 9.49
Initial 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:
Maximize Z = 
i
m
j
n
pij xij
1 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 minimization.
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
1 2 3 4 per Unit (Rs)
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
Supply 100 200 120 80 10 510
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 u3 = 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
vj v1 = – 2 v2 = 0 v3 = – 4 v4 = – 4 v5 = – 1
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).
Table 9.51
Profit Matrix
Table 9.52
Initial Feasible
Solution
296 Operations Research: Theory and Applications
1 2 3 4 Dummy Demand ui
A 9 9 4 0 15 80 u1 = – 5
+5 +3 +2
80
+5
B 11 9 5 3 15 120 u2 = – 2
+4 70 50 + 2
C 9 11 8 11 15 150 u3 = 0
100 40 +1 + 6 10
D 11 5 1 1 15 70 u4 = – 6
+8 0 70 + 2 + 6
E 7 7 8 6 15 90 u5 = – 4
+2 90 +5 + 5 + 4
Supply 100 200 120 80 10 510
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).
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
Table 9.53
Optimal Solution
Fig. 9.2
Transportation Problem 297
of m × n. If the total number of units transported from all sources to all destinations is N, then the given
supply at each source and demand at each destination are added to N. The demand at source and the
supply at each destination are set to be equal to N. The problem can then be solved by the usual MODI
method for transportation problems. In the final solution, ignore the units transported from a point to itself,
i.e. diagonal cells, because they do not have any physical meaning (no transportation).
Example 9.19 Consider a firm having two factories. The firm is to ship its products from the factories
to three retail stores. The number of units available at factories X and Y are 200 and 300, respectively, while
those demanded at retail stores A, B and C are 100, 150 and 250, respectively. Rather than shipping the
products directly from factories to retail stores, it is asked to investigate the possibility of trans-shipment.
The transportation cost (in rupees) per unit is given in the table:
Factory Retail Store
XYABC
Factory X 0 8 7 8 9
Y60543
A72051
Retail Store B 1 5 1 0 4
C89780
Find the optimal shipping schedule.
Solution The number of units available at X and Y are 200 and 300, respectively and the demand at A,
B and C is 100, 150 and 250, respectively. The maximum amount which can be transported through a factory
or retail store is the total supply and demand, i.e. N = 500 units. If all these 500 units are not transported
through a factory or retail store, then the remaining units will play the role of dummy. The trans-shipment
table is shown in Table 9.54 where 500 units have been added to the supply and demand at factory and
to a retail store.
X Y A B C Supply
X 0 8 7 8 9 200 + 500
Y 6 0 5 4 3 300 + 500
A 7 2 0 5 1 500
B 1 5 1 0 4 500
C 8 9 7 8 0 500
Demand 500 500 100 + 500 150 + 500 250 + 500
The initial solution to trans-shipment problem given in Table 9.55 can be obtained by putting 500 units
to each route on the diagonal and making allocation in the matrix, by using Vogel’s approximation method.
A B C Supply
X 7 8 9 700
Y 5 4 3 800
Demand 600 650 750
Applying the MODI method to test the optimality of the solution given in Table 9.55. Since the
opportunity cost corresponding to each unoccupied cell is positive, the solution given in Table 9.55 is also
optimal. In order to interpret the optimal solution, allocations in the diagonal cells are ignored as these
values show the extra dummies that have been added in order to allow as much as flow possible.

RST
RST
Table 9.54
298 Operations Research: Theory and Applications
X Y A B C Supply ui
X08789
500 100 100 700 u1 = 4
+4 +2
Y60543
500 50 250 800 u2 = 0
+10 +2
A72051
500 500 u3 = – 3
+14 +5 +4 +1
B15104
500 500 u4 = – 4
+9 +9 +2 +5
C89780
500 500 u5 = – 3
+15 +12 +7 +7
Demand 500 500 600 650 750 3,000
vj v1 = – 4 v2 = 0 v3 = 3 v4 = 4 v5 = 3
CONCEPTUAL QUESTIONS C
1. What is meant by unbalanced transportation problem? Explain
the method for solving such a problem.
2. Explain how a profit maximization transportation problem can be
converted to an equivalent cost minimization transportation
problem.
3. What is degeneracy in transportation problems? How is a
transportation problem solved when the demand and supply are
not equal?
4. (a) Explain how to resolve degeneracy in a transportation
problem.
(b) How does the problem of degeneracy arise in a
transportation problem? Explain how one can overcome it.
5. State a transportation problem in general terms and explain the
problem of degeneracy. How does one overcome it?
6. Explain a trans-shipment problem.
7. What are the main characteristics of a transshipment problem?
8. Explain how a trans-shipment problem can be solved as a
transportation problem.
9. What is a trans-shipment problem? Explain how it can be
formulated and solved as a transportation problem.
[Delhi Univ., MBA, 2006]
10. Explain the method for solving trans-shipment problem.
Table 9.55
Optimal Solution
1. A steel company has three open hearth furnaces and five rolling
mills. The transportation costs (rupees per quintal) for shipping
steel from furnaces to rolling mills are given in the following table:
M1 M2 M3 M4 M5 Supply
F1 4 2 3 2 6 18
F2 5 4 5 2 1 12
F3 6 5 4 7 7 14
Demand 4 4 6 8 8
What is the optimal shipping schedule?
2. Consider the following unbalanced transportation problem.
To
I II III Supply
A 5 1 7 10
From B 6 4 6 80
C 3 2 5 15
Demand 75 20 50
Since there is not enough supply, some of the demands at these
destinations may not be satisfied. Suppose there are penalty
costs for every unsatisfied demand unit which are given by 5,
3 and 2 for destinations I, II and III, respectively. Find the optimal
solution.
SELF PRACTICE PROBLEMS C
Transportation Problem 299
3. A company produces a small component for an industrial
product and distributes it to five wholesalers at a fixed delivered
price of Rs 2.50 per unit. The sales forecasts indicate that the
monthly deliveries will be 3,000, 3,000, 10,000, 5,000 and 4,000
units to wholesalers I, II, III, IV and V, respectively. The
company’s monthly production capacities are 5,000, 10,000 and
12,500 at plants 1, 2 and 3, respectively. Respective direct
costs of production of each unit are Re 1.00, Re 0.90, and Re
0.80 at plants W, X and Y. Transportation costs of shipping a
unit from a plant to a wholesaler are as follows.
Wholesaler
I II III IV V
W 0.05 0.07 0.10 0.25 0.15
Plant X 0.08 0.06 0.09 0.12 0.14
Y 0.10 0.09 0.08 0.10 0.15
Find how many components each plant should supply to each
wholesaler in order to maximize its profit.
4. ABC Tool Company has a sales force of 25 men, who operate
from three regional offices. The company produces four basic
product lines of hand tools. Mr Jain, the sales manager, feels
that 6 salesmen are needed to distribute product line I, 10 to
distribute product line II, 4 for product line III and 5 salesmen
for product line IV. The cost (in Rs) per day of assigning
salesmen from each of the offices for selling each of the product
lines are as follows:
Product Lines
I II III IV
A 20 21 16 18
Regional Office B 17 28 14 16
C 29 23 19 20
At the present time, 10 salesmen are allocated to office A, 9 to
office B and 7 salesmen to office C. How many salesmen should
be assigned from each office to sell each product line in order
to minimize costs? Identify alternate optimum solutions, if any.
[Delhi Univ., MBA, 2001]
5. The Purchase Manager, Mr Shah, of the State Road Transport
Corporation must decide on the amount of fuel that should be
bought from three possible vendors. The corporation refuels its
buses regularly at the four depots within the area of its operations.
The oil companies have said that they can furnish up to the
following amounts of fuel during the coming month: 2,75,000
litres by oil company 1; 5,50,000 litres by oil company 2; and
6,60,000 litres by oil company 3. The required amount of the fuel
is 1,10,000 litres by depot 1; 2,20,000 litres at depot 2; 3,30,000
litres at depot 3; and 4,40,000 litres at depot 4.
When the transportation costs are added to the bid price per
litre supplied, the combined cost per litre for fuel from each
vendor, servicing a specific depot, is as under:
Company 1 Company 2 Company 3
Depot 1 25.00 24.75 24.25
Depot 2 25.00 25.50 26.75
Depot 3 24.50 26.00 25.00
Depot 4 25.50 26.00 24.50
Determine the optimal schedule. [Delhi Univ., MBA, 2002]
6. A departmental store wishes to purchase the following quantities
of sarees:
Types of sarees : A B C D E
Quantity : 150 100 75 250 200
Tenders are submitted by four different manufacturers who
undertake to supply not more than the quantities mentioned
below (all types of sarees combined);
Manufacturer : W X Y Z
Total quantity : 300 250 150 200
Sarees
ABCDE
W 275 350 425 225 150
X 300 325 450 175 100
Manufacture
Y 250 350 475 200 125
Z 325 275 400 250 175
How should the orders be placed?
7. A company has four factories F1, F2, F3 and F4 that manufacture
the same product. Production and raw material costs differ from
factory to factory and are given in the following table in the first
two rows. The transportation costs from the factories to the
sales depots, S1, S2 and S3 are also given. The last two columns
in the table give the sales price and the total requirement at each
depot. The production capacity of each factory is given in the
last row.
F1 F2 F3 F4 Sales Requirement
Price
per Unit
Production 15 118 14 113
cost/unit
Raw material 10 119 12 119
cost/unit
S1 13 119 15 114 34 80
Transportation S2 11 117 14 115 32 120
cost/unit S3 15 118 13 116 31 150
Supply 50 150 50 100
Determine the most profitable production and distribution
schedule and the corresponding profit. The deficit production
should be taken to yield zero profit. Write the dual of this
transportation problem and use it for checking the optimal
solution. [Delhi Univ., MBA, 2000]
8. Link Manufacturing Company has several plants, three of
which manufacture two principal products – a standard card
table and deluxe card table. A new deluxe card table will be
introduced, which must be considered in terms of selling price
and costs. The selling prices are: Standard, Rs 14.95, deluxe
Rs 18.85 and New Deluxe, Rs 21.95.
Variable Costs (in Rs)
Model Qty. Plant A Plant B Plant C Plant Capacity
Standard ,450 8.00 7.95 8.10 A 800
Deluxe 1,050 8.50 8.60 8.45 B 600
New Deluxe 600 9.25 9.20 9.30 C 700
Solve this problem by the transportation technique for the
maximum contribution.
9. City Super Market keeps five different patterns of a particular
size of readymade garment for sale. There are four manufacturers

300 Operations Research: Theory and Applications
available to the manager of the market to whom be can order
the required quantity. The demand for the coming season and
the maximum quantity that can be produced by a manufacturer
is as follows:
Pattern 1 2 3 4 5
U. Cut P. Form Maxi Mini Midi
Quantity required 200 150 200 150 300
Manufacturer A B C D
Capacity 200 300 250 250
The following quotations have been submitted by the
manufacturers for different patterns:
12345
U. Cut P. Form Maxi Mini Midi
A Rs 100 Rs 130 Rs 160 Rs 70 Rs 140
B 100 120 150 75 130
C 115 140 155 80 120
D 125 145 140 60 125
The super market is selling different patterns at the following
prices:
Pattern : 1 2 3 4 5
Selling Price (Rs) : 120 150 170 80 140
How should the super market manager place the order? Write
the dual of this transportation problem and give its economic
interpretation.
10. A company wishes to determine an investment strategy for each
of the next four years. Five investment types have been selected.
The investment capital has been allocated for each of the coming
four years, and maximum investment levels have been established
for each investment type. There is an assumption that amounts
invested in any year will remain invested until the end of the planning
horizon of four years. The following table summarizes the data of
this problem. The values in the body of the table represent the net
return on investment of one rupee up to the end of the planning
horizon. For example, a rupee invested in investment type B at the
beginning of year will grow to Rs 1.90 by the end of the fourth year,
yielding a net return of Re 0.90.
Investment Investment Type Rupees
Made at the Available
Beginning A B C D E (in ’000s)
of Year
1 0.80 0.90 0.60 0.75 1.00 500
2 0.55 0.65 0.40 0.60 0.50 600
3 0.30 0.25 0.30 0.50 0.20 750
4 0.15 0.12 0.25 0.35 0.10 800
Maximum
rupees 750 600 500 800 1,000
investment
(in ’000s)
The objective in this problem is to determine the amount to be
invested at the beginning of each year in an investment type so
as to maximize the net rupee return for the four year period.
Solve the above transportation problem and get an optimal
solution. Also calculate the net return on investment for the
planning horizon of four-year period.
11. XYZ Company has provided the following data and seek your
advice on the optimum investment strategy:
Investment Net Return Data Amount
Made at the (in paise) of Available
Beginning Selected Investment (lacs)
of Year P Q R S
1 95 80 70 60 70
2 75 65 60 50 40
3 70 45 50 40 90
4 60 40 40 30 30
Max.
Investment
(Rs lakh) 40 50 60 60 –
The following additional information is also provided:
(a) P, Q, R and S represent the selected investments.
(b) The company has decided to have a four years investment
plan.
(c) The policy of the company is that the amount invested in
any year will remain so until the end of fourth year.
(d) The values (paise) in the table represent net return on
investment of one rupee till the end of the planning horizon
(for example, a rupee in investment P at the beginning of
year will grow to Rs 1.95 by the end of the fourth year,
yielding a return of 95 paise).
Using the above, determine the optimum investment strategy.
12. A manufacturer must produce a certain product in sufficient
quantity in order to meet contracted sales of the next four
months. The production facilities available for this product are
limited, and vary in different months. The unit cost of production
also changes accordingly to the facilities and personnel available.
The product may be produced in one month and then held for
sale in a later month, at an estimated storage cost of Re 1 per
unit per month. No storage cost is incurred for goods that are
sold in the same month in which they are produced. Presently
there is no inventory of this product and none is desired at the
end of four months. Given the following table, show how much
to produce in each of four months in order to minimize total cost.
Month Contracted Maximum Unit Cost of Unit Storage
Sales Production Production Cost per Month
(in units) (in units) (Rs) (Rs)
1 20 40 14 1
2 30 50 16 1
3 50 30 15 1
4 40 50 17 1
Formulate the problem as a transportation problem and solve it.
13. A company has factories at A, B and C, which supply its
products to warehouses at D, E, F and G. The factory
capacities are 230, 280 and 180, respectively for regular
production. If overtime production is utilized, the capacities can
be increased to 300, 360 and 190, respectively. Increment unit
overtime costs are Rs 5, Rs 4 and Rs 6, respectively. The
current warehouse requirements are 165, 175, 205 and 165,
respectively. Unit shipping costs in rupees between the factories
and the warehouses are:
To
DEFG
A 6 7 8 10
From B 4 10 7 6
C 3 22 2 11
Determine the optimum distribution for the company to minimize
costs.
Transportation Problem 301
14. The products of three plants X, Y and Z are to be transported
to four warehouses I, II, III and IV. The cost of transportation of
each unit from plants to the warehouses along with the normal
capacities of plants and warehouses are indicated below:
Warehouse
I II III IV Available
X 25 17 25 14 300
Plant Y 15 10 18 24 500
Z 16 20 8 13 600
Required 300 300 500 500
(a) Solve the problem for minimum cost of transportation. Are
there any alternative solutions? If any, explain the
methodology.
(b) Overtime can be used in each plant to raise the capacity
by 50 per cent of the normal but the corresponding cost
of trans-shipment will also increase by 10, 15 and 20 to
the unit costs of production at each plant.
15. A firm manufacturing industrial chemicals has got 3 plants P1, P2
and P3 each having capacities to produce 300 kg, 200 kg, and
500 kg, respectively of a particular chemical per day. The
production costs per kg in plants P1, P2 and P3, respectively are
Re 0.70, Re 0.60 and Re 0.66. Four bulk consumers have
placed orders for the products on the following basis:
Consumer kg Required Price Offered
per Day Rs/kg
I 400 1.00
II 250 1.00
III 350 1.02
IV 150 1.03
Shipping costs (paise per kg) from plants to consumers are
given in the table below:
Consumer
C1 C2 C3 C4
P1 3 5 4 6
Plant P2 8 11 9 12
P3 4 6 2 8
Work out an optimal schedule for the above situation. Under
what conditions would you change schedule?
16. The personnel manager of a manufacturing company is in the
process of filling 175 jobs in six different entry level skills due
to the establishment of a third shift by the company. Union wage
scale and requirement for the skills are shown in the following
table:
Pay Scales and Skills Requirements
Entry Level Skills A B C D E F
Wage scale 1,000 1,100 1,200 1,300 1,400 1,500
Rs/month
No. required 25 29 31 40 33 17
230 applicants for the jobs have been tested and their aptitudes
and skills for the jobs in question have been matched against
company standards and evaluated. The applicants have been
grouped into four categories by their abilities; the grouping and
values of each category to the company are shown in the table
below:
Applicant Category Value (Rs per month) Number of
Category A B C D E F Applicants
I 1,000 1,100 1,500 1,400 1,400 1,450 54
II 1,200 1,250 1,200 1,350 1,400 1,400 54
III 1,000 1,100 1,200 1,400 1,500 1,600 45
IV 1,500 1,500 1,600 1,400 1,400 1,500 74
How many applicants of each category should the personnel
manager hire and for which jobs?
17. Debonair Private Ltd. is in the business of manufacturing and
selling office shirts for men. It has four factories located in
different parts of the country and the monthly capacities of the
factories in thousand are as given below. The shirts are made
in a few standard designs and colours, and each factory can
make all types of shirts in any size subject to the overall capacity
of the factory.
Factories : I II III IV
Monthly capacity : 3 4.5 2.5 5
From the factories, the shirts are transported to five warehouses
located in five different regions in India. The warehouses in turn
supply to the distributors and the retailers. The monthly demand
of shirts (in thousand) from the warehouses is as follows:
Warehouses : A B C D E
Monthly capacity : 3 5 1.5 2 2.5
The cost of transporting a shirt from a factory to a warehouse
depends on the distance between them and the cost of
transporting a shirt from each factory to each warehouse is
given in the table below:
Warehouse
ABCDE
I63425
II 11 7 5 10 9
Factory III 10 7 1 2 8
IV 12 10 5 3 5
How many shirts are to be produced, in which factory, and how
are these to be dispatched to the warehouse so that the total
cost involved in transportation is minimized.
(a) Use the North-West Corner Method to get an initial feasible
solution.
(b) Check if the solution obtained in (a) above is an optimal
allocation and if not, then find the optimal solution.
18. A manufacturer of jeans is interested in developing an advertising
campaign that will reach four different age groups. Advertising
campaigns can be conducted through TV, radio and magazines.
The following table gives the estimated cost in paise per exposure
for each age group according to the medium employed. In addition,
maximum exposure levels possible in each of the media, namely
TV, radio and magazines are 40, 30 and 20 millions, respectively.
Also the minimum desired exposure within each age group, namely
13–18, 19–25, 26–35, 36 and older are 30, 25, 15 and 10 millions.
The objective is to minimize the cost of attaining the minimum
exposure level in each age group.
302 Operations Research: Theory and Applications
Media Age Groups
13–18 l9–25 26–35 36 and older
TV 12 7 10 10
Radio 10 9 12 10
Magazine 14 12 9 12
(a) Formulate the above as a transportation problem, and find
the optimal solution.
(b) Solve this problem if the policy is to provide at least 4
million exposures through TV in the
13–18 age group and at least 8 million exposures through
TV in the age group 19–25.
19. Two drug companies have inventories of 1.1 and 0.9 million
doses of a particular flu vaccine, and an epidemic of the flu
seems imminent in three states. Since the flu could be fatal to
senior citizens, it is imperative that they be vaccinated first;
others will be vaccinated on a first-come-first-served basis while
the vaccine supply lasts. The amounts of vaccine (in millions of
doses) each state estimates it could administer are as follows:
State 1 State 2 State 3
Elders 0.325 0.260 0.195
Others 0.750 0.800 0.650
The shipping costs (paise per dose) between drug companies
and states are as follows:
State 1 State 2 State 3
Company 1 30 30 60
Company 2 10 40 70
Determine a minimum-cost shipping schedule which will provide
each state with at least enough vaccine to care for its senior
citizens. Write the dual of this transportation problem and use
it for checking the optimal solution.
[Delhi Univ., MBA (HCA), 2000, 2005]
20. A leading firm has three auditors. Each auditor can work up to
160 hours during the next month, during which time three
projects must be completed. Project 1 will take 130 hours,
project 2 will take 140 hours, and project 3 will take 160 hours.
The amount per hour that can be billed for assigning each
auditor to each project is given in the table.
Project
Auditor 1(Rs) 2(Rs) 3(Rs)
1 1,200 1,500 1,900
2 1,400 1,300 1,200
3 1,600 1,400 1,500
Formulate this as a transportation problem and find the optimal
solution. Also find out the maximum total billing during the next
month.
Degeneracy
21. Obtain an optimum basic feasible solution to the following
degenerate transportation problem.
To
A B C Supply
X7342
From Y 2 1 3 3
Z3465
Demand 4 1 5
22. A manufacturer wants to ship 8 loads of his product as shown
in the table. The matrix gives the mileage from origin to
destination. Shipping costs are Rs 10 per load per mile. What
shipping schedule should be used?
D1 D2 D3 Supply
O1 50 30 220 1
O2 90 45 170 3
O3 250 200 50 4
Demand 4 2 2
Trans-shipment
23. Consider the following trans-shipment problem with two sources
and three destinations, the cost for shipments (in rupees) is
given below.
Source Destination Supply
S1 S2 D1 D2 D3
S1 0 80 10 20 30 100 + 300
Source S2 10 0 20 50 40 200 + 300
D1 20 30 0 4 10 300
Destination D2 40 20 10 0 20 300
D3 60 70 80 20 0 300
Demand 300 300 100 + 300 100 + 300 100 + 300
Determine the optimal shipping schedule.
24. A firm having two sources, S1 and S2 wishes to ship its product
to two destinations, D1 and D2. The number of units available at
S1 and S2 are 10 and 30 and the product demanded at D1 and
D2 are 25 and 15 units, respectively. The firm instead of shipping
from sources to destinations, decides to investigate the possibility
of transshipment. The unit transportation cost (in Rs) is given
in the following table:
Source Destination Supply
S1 S2 D1 D2
Source S1 0 3 4 5 10 + 40
S2 3 0 3 5 30+40
Destination D1 4 3 0 2 40
Demand D2 5 5 2 0 40
40 40 25 + 40 15 + 40
Determine the optimal shipping schedule.




1. Total requirement (30) < Total capacity (34), add a dummy mill
with requirement (34 – 30) = 4. Degeneracy occur at the initial
solution (VAM).
Ans. x12 = 4, x14 = 4, x24 = 2, x25 = 8, x31 = 4, x33 = 6 and
x36 = 4. Total cost = Rs 80.
HINTS AND ANSWERS
Transportation Problem 303
2. Demand (145) > Supply (105), add dummy source with supply
(145 – 105) = 40 and transportation costs 5, 3 and 2 for
destination 1, 2 and 3, respectively.
Ans. x12 = 0, x21 = 60, x22 = 10, x23 = 10, x31 = 5 and x43 = 40.
Transportation cost = Rs 515. Penalty for transportation of 40
units to destination 3 at the cost of Rs 2 per unit = Rs 80. Thus,
total cost = 515 + 80 = Rs 595.
3. Maximization as well as unbalanced problem. Total capacity
(27,500) > demand (25,000). Add a dummy wholesaler with
demand 2,500 units. Since direct costs of production of each unit
are Re 1, Re 0.90 and Re 0.80 at plants 1, 2 and 3, add this cost
to each figure row wise to get exact data of the problem.
Ans. x11 = 2,500, x21 = 500, x22 = 3,000, x23 = 2,500, x25 =
4,000, x33 = 7,500 and x34 = 5,000. Total cost Rs 23,730.
Since in total 25,000 units are supplied to the wholesalers
at a fixed price of Rs 2.50 per unit, therefore, the total cost is
Rs 62,500.
The net maximum profit to the manufacturer = Rs 62,500 –
Rs 23,730 = Rs 38,770
4. Supply (26) > Demand (25), add dummy column with demand 1.
Ans. x12 = 4, x13 = 1, x14 = 5; x21 = 6, x23 = 3, x32 = 2,
x35 = 1 Total cost = Rs 472
Alternative solution exists because opportunity cost is zero in
cell (B, 4) and (C, 4).
5. Supply (14,85,000) > Demand (11,00,000), add dummy column
with demand of 3,85,000 litres of oil; x13 = 110, x21 = 55,
x22 = 165, x31 = 220, x33 = 110, x43 = 440, x52 = 385.
Total cost = Rs 51,700.
6. Profit maximization problem. First add a dummy column with
demand of 125 sarees and then subtract all elements of the profit
matrix from the highest element 475.
Manufacturer Variety Quantity
W B, D, E 25, 50, 200
X A 150
Y B, C 75, 75
Z D 200
7. Profit maximization problem. First add dummy row with supply
of 40 units and then subtract all elements of the profit matrix
from highest element 8.
Profit = Sales price – (Production cost + Raw material cost
+ Transportation cost)
Factory Sales Depot Unit Profit
F1 S2 6
F2 S2, S3 – 2, – 4
F3 S3 2
F4 S1, S2 8, 5
Total profit = Rs 2,000
12. Transportation cost table and optimal solution
From/To 1 2 3 4 Dummy Supply
1 14 15 16 17 0
20 20 40
2 ∞16 17 18 0
10 20 20 50
3 ∞∞15 16 0
30 30
4 ∞∞∞17 0
40 10 50
Demand 20 30 50 40 30 170
13. Transportation cost table and optimal solution
D E F G Dummy Supply
A 6 7 8 10 0
40 175 15 230
B 4 10 7 6 0
115 165 280
C 3 22 2 11 0
180 180
A1 11 12 13 15 0
70 70
B1 8 14 11 10 0
10 70 80
C1 9 28 8 17 0
10 10
Demand 165 175 205 165 140 850
304 Operations Research: Theory and Applications
True or False
1. The test for degeneracy of a solution is to check if there are
unused cells with an improvement index equal to zero. If so,
degeneracy exists.
2. The advantage of the most method over the stepping stone
method of computing improvement indices for unused cells lies
in the greater computational efficiency.
3. If you have to solve a transportation problem with m rows and
n columns using the simplex method, you would have to
formulate the problem with m variables and n constraints.
4. A solution to the cost minimization transportation problem is
optimal when all unused cells have an improvement index which
is non-negative.
5. A dummy row or column is introduced in the transportation
method is order to handle an unbalanced problem. The dummy
serve, the same purpose as a slack variable in the simplex
method.
6. Each iteration of the transportation method involves the elimination
of one occupied cell and the introduction of one unoccupied cell
which is similar to a pivot in the simplex method.
7. In the transportation problem, extra constraint equation can not
be derived from any other constraint equations as it affects the
feasible solution of the problem.
8. In the north-west corner method, the cost of transportation on
any route of transportation is taken into account.
9. The unbalanced transportation problem can be balanced by
adding a dummy supply row or a demand column as per the need.
10. In the transportation problem, the rim requirement for a row is
the capacity of a supplier, white a rim requirement for a column
is the demand of a user.
Fill in the Blanks
11. The northwest corner rule provides a ____________ for obtaining
an ____________ solution to the transportation problem.
12. The degeneracy may occurs when there are two or more cells
with the same smallest ____________ value in a closed
____________ for an incoming cell.
13. We have alternative optimal solutions to a minimization
transportation problem whenever we find a solution where the
improvement indices are all ____________ with at least ____________
to zero.
14. An improvement index in the transportation method is analogous
to a value in the quantity column in the ____________ method.
15. The ____________ serves the same purpose for the transportation
method as all slack variables in the simplex method.
16. An unused cell in the transportation table is analogous to a
variable not in the solution column in the simplex method.
17. The end result of an iteration in the transportation method is the
same as the end result in the simplex method in that value of
the solution is ____________.
18. In Vogel’s approximation method, each allocation is made on the
basis of the ____________ cost that would have been incurred if
allocation in certain cells with ____________ unit transportation
cost were missed.
19. ____________ method is based on the concept of duality.
20. If the total supply ____________ total demand, then an additional
column known as ____________ added to the transportation table
to absorb the same.
Multiple Choice
21. The initial solution of a transportation problem can be obtained
by applying any known method. However, the only condition is
that
(a) the solution be optimal
(b) the rim conditions are satisfied
(c) the solution not be degenerate
(d) all of the above
22. The dummy source or destination in a transportation problem is
added to
(a) satisfy rim conditions
(b) prevent solution from becoming degenerate
(c) ensure that total cost does not exceed a limit
(d) none of the above
23. The occurrence of degeneracy while solving a transportation
problem means that
(a) total supply equals total demand
(b) the solution so obtained is not feasible
(c) the few allocations become negative
(d) none of the above
24. An alternative optimal solution to a minimization transportation
problem exists whenever opportunity cost corresponding to
unused route of transportation is:
22. Using NWCM, initial solution is degenerate.
Ans. x13 = 2, x22 = l, x23 = 2, x31 = 4 and x33 = 1,
Total cost = Rs 33.
23. Ans. x12 = 10, x13 = 20, x15 = 10, x21 = 20, x31 = 5,
x34 = 30, x35 = 5, Total cost = Rs 3,600.
CHAPTER SUMMARY
The transportation problem (a special case of LP problem) is concerned with distributing a commodity from
given sources to their
respective destinations. Each source has a fixed supply of the commodity and each destination has a fixed
demand. A basic
assumption is that the cost of distribution from each source to each destination is directly proportional to the
amount distributed.
Formulating a transportation problem requires constructing a special purpose table that gives the unit costs of
distribution, the
supplies and the demands.
The objective of this chapter is to enable readers to recognize a problem that can be formulated and analyzed as
a
transportation problem or as a variant of one of these problem types.
CHAPTER CONCEPTS QUIZ
Transportation Problem 305
(a) positive and greater than zero
(b) positive with at least one equal to zero
(c) negative with at least one equal to zero
(d) none of the above
25. One disadvantage of using North-West Corner Rule to find initial
solution to the transportation problem is that
(a) it is complicated to use
(b) it does not take into account cost of trans-portation
(c) it leads to a degenerate initial solution
(d) all of the above
26. The solution to a transportation problem with m-rows (supplies)
and n-columns (destination) is feasible if number of positive
allocations are
(a) m + n
(b) m × n
(c) m + n – 1
(d) m + n + 1
27. The calculation of opportunity cost in the MODI method is
analogous to a
(a) cj – zj value for non-basic variable columns in the simplex
method
(b) value of a variable in xB-column of the simplex method
(c) variable in the B-column in the simplex method
(d) none of the above
28. An unoccupied cell in the transportation method is analogous to
a
(a) cj – zj value in the simplex table
(b) variable in the B-column in the simplex table
(c) variable not in the B-column in the simplex table
(d) value in the xB-column in the simplex table
29. If an opportunity cost value is used for an unused cell to test
optimality, it should be
(a) equal to zero
(b) most negative number
(c) most positive number
(d) any value
30. During an iteration while moving from one solution to the next,
degeneracy may occur when
(a) the closed path indicates a diagonal move
(b) two or more occupied cells are on the closed path but
neither of them represents a corner of the path.
(c) two or more occupied cells on the closed path with minus
sign are tied for lowest circled value
(d) either of the above
31. The large negative opportunity cost value in an unused cell in a
transportation table is chosen to improve the current solution because
(a) it represents per unit cost reduction
(b) it represents per unit cost improvement
(c) it ensure no rim requirement violation
(d) none of the above
32. The smallest quantity is chosen at the corners of the closed path
with negative sign to be assigned at unused cell because
(a) it improve the total cost
(b) it does not disturb rim conditions
(c) it ensure feasible solution
(d) all of the above
33. When total supply is equal to total demand in a transportation
problem, the problem is said to be
(a) balanced
(b) unbalanced
(c) degenerate
(d) none of the above
34. Which of the following methods is used to verify the optimality of
the current solution of the transportation problem,
(a) Least cost method
(b) Vagel’s approximation method
(c) Modified distribution method
(d) all of the above
35. The degeneracy in the transportation problem indicates that
(a) dummy allocation (s) needs to be added
(b) the problem has no feasible solution
(c) the multiple optimal solution exist
(d) (a) and (b) but not (c)
Answers to Quiz
1. F 2. T 3. F 4. T 5. T 6. T 7. F 8. F 9. T 10. T
11. mechanism; initial 12. negative; path 13. non-negative; equals 14. simplex
15. north west corner rule 16. product mix 17. improved 18. opportunity; minimum
19. modified, distribution 20. exceed; dummy demand centre
21. (b) 22. (a) 23. (b) 24. (b) 25. (b) 26. (c) 27. (a) 28. (c) 29. (b) 30. (c)
31. (a) 32. (c) 33. (a) 34. (c) 35. (d)
CASE STUDY
Case 9.1: Asian Games*
For maintaining law and order during the Asian Games, 1982 police force has been requisitioned from the various central
police organizations like CRPF, BSF, ITBP and other states such as Haryana, Himachal Pradesh, Uttar Pradesh, Orissa and
Gujarat. Besides this there are 10 batalions of Delhi Police available for deployment. The outside and the local force have
been stationed at various places in the Union Territory of Delhi. The figures are in the number of sections (10 Men)
available for deployment.
306 Operations Research: Theory and Applications
Place Abbreviation Force (Section)
New Police Lines NPL 400
Jharoda Kalan JK 160
Pitam Pura PP 160
Model Town MT 90
Police Training School PTS 90
Old Police Lines OPL 120
New Kotwali NK 20
Kamala Market KMT 120
Parliament Street PST 240
Rajpura Lines RPL 120
Shakarpur SP 120
Moti Nagar MN 120
Mehram Nagar MRN 240
Total 2,000
The force is to be deployed at various stadia on the day of events. The requirement of the force has been calculated
keeping in view the factors like capacity of the stadium, traffic problems, security of VIPs and participants etc. The
requirement of force is also mentioned in number of sections.
Stadium Abbreviation Force (Section)
Chhatrasal CS 60
Delhi University DU 40
Indraprastha IP 400
Yamuna Velodrome YV 40
Talkatora Indoor TKI 80
Talkatora Swimming TKS 80
National NS 240
Hall of sports HS 60
Harbaksh HB 60
Shivaji SV 60
Jawaharlal Nehru JLN 500
Hauz Khas HK 20
Games Village GV 60
Ambedkar AK 200
Tughlakabad Range TR 40
Golf Club GC 20
Karnail Singh KS 40
Total 2,000
The cost of transportation of one section, i.e. 10 Men from every location to each stadium has been calculated as
shown in the matrix below.
It is assumed that the availability and requirement of force is equal, i.e. 2,000 sections. It will not be possible on any
day during the games as all stadia are not having games on all the days. Hence, there will always be a surplus force available.
Consequently dummy stadium will have to be planned everyday so as to absorb the unutilized force. The cost (in Rs 100s
for 10 persons – one section) matrix for the movement of the police force is given below:
* Based on the class assignment prepared by the MBA(FMS) student Mr M.S Upadhya, IPS.
Transportation Problem 307
CS DU IP YV TKI TKS NS HS HB JLN SV HK GV AK TR GC KS Force
Availability
NPL 2 1 13 12 15 15 16 14 25 20 14 22 24 11 35 16 10 400
JK 28 31 36 37 130 30 35 36 16 42 30 35 36 35 50 35 36 160
PP 15 14 26 25 28 28 28 17 38 33 17 35 37 24 48 29 23 160
MT 4 3 15 14 17 17 18 16 27 22 16 24 26 13 37 18 12 90
PTS 26 24 15 16 13 13 12 15 15 12 15 33 3 16 10 17 16 90
OPL 7 2 8 7 10 10 11 13 20 15 9 17 13 6 30 11 6 120
NK 11 6 4 3 6 6 7 9 16 11 5 13 15 2 26 7 4 20
KMT 13 8 3 4 4 4 5 5 21 16 2 25 25 1 24 10 2 120
PST 15 12 5 6 2 2 4 5 16 10 12 12 12 4 22 4 3 240
RPL 4 1 11 10 13 13 14 14 23 18 12 20 22 9 33 14 8 120
SP 19 16 3 4 7 7 6 5 21 12 8 18 18 5 30 8 8 120
MN 10 12 16 17 13 13 15 16 20 20 15 25 25 14 35 18 12 120
MRN 30 28 18 19 15 15 15 16 6 22 15 12 12 20 20 20 20 240
Force
Requirement 60 40 400 40 80 80 180 240 60 60 500 60 20 200 40 20 40 2,000
Suggest an optimal transportation schedule of the police force so as to minimize the total transportation cost.
APPENDIX: THEOREMS AND RESULTS
Theorem 9.1 (Existence of Feasible Solution) A necessary and sufficient condition for the existence of a feasible
solution to the transportation problem is
ai
i
m

1
=bj
j
n

1
(Rim condition)
That is, the total capacity (or supply) must equal total requirement (or demand).
Proof (a) Necessary Condition Let there exist a feasible solution to the transportation problem. Then, we have
xij
j
n
i
m


11
= ai
i
m

1
(1)
and xij
i
m
j
n


11
=bj
j
n

1
(2)
Since the left-hand side of (1) and (2) are the same, therefore ai
i
m

1
=bj
j
n

1
(b) Sufficient Condition Suppose
ai
i
m

1
=bj
j
n

1
= k (say)
If there exists a real number i ≠0 such xij = i bj for all i and j, then value of i is given by
xij
j
n

1
= i j
j
n
b

1
= i b j
j
n

1
= ki or i =
1
k1
xij
j
n

=
a
k
i
Thus xij = i bj =
ab
k
i j for
all i and j.
Since ai > 0 and bj > 0 for all i and j, therefore ai bj /k ≥0 and hence a feasible solution exists, i.e. xij ≥0.
Theorem 9.2 (Basic Feasible Solution) The number of basic variables (positive allocations) in any basic feasible
solution are m + n – 1 (the number of independent constraint equations) satisfying all the rim conditions.
Proof In the mathematical model of a transportation problem it can be seen that there are m rows (capacity or supply
constraint equations) and n columns (requirement or demand constraint equations). Thus there are in total m + n
constraint equations. But because of Theorem 9.1 (total capacity be equal to the total requirement) out of m + n
constraint equations one of the equations is redundant and can also be eliminated. Thus there are m + n – 1 linearly
independent equations. It can be verified by adding all the m rows equations and subtracting from the sum the first
n – 1 column equations, thereby getting the last column equation. That is,
xij
j
n
i
m


11
– xij
i
m
j
n

−

11
1
= ai
i
m

1
–bj
j
n

−
1
1
308 Operations Research: Theory and Applications
xij
j
n
i
m


11
– xij x
i
m
j
n
in
i
m

−

LN MM
OQ PP
111
= ai
i
m

1
–b jb
j
n
n

−

LN MM
OQ PP
1
xin
i
m

1
= bn ; since ai
i
m

1
=bj
j
m

1
Triangular Basis We know that the number of basic variables are equal to the number of constraints in linear
programming. In the same way when capacity and requirement constraint equations are expressed in terms of basic
variables and all non-basic variables are given zero value, the matrix of coefficients of variables in the system of equations
is triangular, that is, there is an equation in which a single basic variable occurs; in the second equation one more basic
variable is added but the total number of variables does not exceed two; similarly, in the third equation one more basic
variable occurs, but total does not exceed three, and so on.
Theorem 9.3 The transportation problem has a triangular basis.
Proof To prove this theorem, consider capacity and requirement constraint equations represented in the tabular form
(Table 9.1).
In the system of capacity and requirement constraint equations, every equation has a basic variable otherwise
the equation cannot be satisfied for ai ≠0 or bj ≠0. Suppose, every row and column equation has at least two basic
variables. Since there are m rows and n columns, therefore, the total number of basic variables in row equations and
column equations will be at least 2m and 2n, respectively. If N be the total number of basic variables, then obviously
N ≥2m, N ≥2n. Now three cases may arise:
Case I : If m > n, then m + m > m + n, or 2m > m + n. Thus N ≥2m ≥m + n.
Case II : If m < n, then m + n < n + n or m + n < 2n. Thus N ≥2n > m + n.
Case III : If m = n, then m + m = m + n or 2m = m + n. Thus N ≥2m = m + n.
In each of these cases, we observed that N > m + n. But the number of basic variables in the transportation problem
are N = m + n – 1. This is a contradiction. Thus our assumption that every equation has at least two basic variables is wrong.
Therefore, there is at least one equation, either row or column, having only one basic variable.
Let the rth equation have only one basic variable, and let xrt be the only basic variable in row r and column t.
Then xrt = ar. Eliminate rth row from the system of equations and substituting xrt = ar in t-th column equation and
replace bt by bt′= bt – ar.
After eliminating the r-th row, the system has m – 1 row equations and n column equations of which
m + n – 2 are linearly independent. This implies that the number of basic variables are m + n – 2. Repeating the argument
given earlier and conclude that in the reduced system of equation, there is an equation which has only one basic variable.
But if this equation happens to be the t-th column equation in the original system, then it will have two basic variables.
This indicates that in our original system of equations, there is an equation which has at least two basic variables.
Continue, repeating the argument to prove that the system has an equation which has at least three basic variables
and so on.
Unbalanced Transportation Problem For a feasible solution to exist it is necessary that the total
supply must equal total demand. That is,
ai
i
m

1
=bj
j
n

1
But a situation may arise when the total available supply is not equal to the total requirement.
Case 1: When the supply exceeds demand, the constraints of the transportation problem will appear as,
xij
j
n

1
≤ai ; i = 1, 2, . . ., m
xij
i
m

1
= bj ; j = 1, 2, . . ., n
xij ≥0 for all i, j
Adding slack variables si, n + 1, (i = 1, 2, . . ., m) in the first m constraints, we get
xij
j
m

1
+ si, n + 1 = ai
,1
11





mn
ij i n
ij
x s = ai
i
m

1
Transportation Problem 309
si n
i
m
,

1
1
= ai b
i
m
j
j
n

−
11
= excess supply available.
If bn + 1 denotes the excess supply available, then the modified transportation model can be stated as
Minimize Z = , 1 , 1
11



mn
ij ij i n i n
ij
cxcs
subject to xij si n
j
n


,1
1
= ai ; i = 1, 2, . . ., m
xij
j
n

1
= bj ; j = 1, 2, . . ., n + 1
and xij ≥0 for all i, j
where ci, n + 1 = 0 (i = 1, 2, . . ., m) and
ai
i
m

1
=b jb
j
n
n


1
1 or bn + 1 = ai
i
m

1
– bj
j
n

1
It follows that, if ai
i
m

1
>bj
j
n

1
, then a dummy column (demand centre) can be added to the transportation
table 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 not being made and not being sent.
Case 2: When demand exceeds supply, the constraints of the transportation table will appear as
xij
j
n

1
= ai ; i = 1, 2, . . ., m
xij
i
m

1
≤bj ; j = 1, 2, . . ., n
and xij ≥0 for all i, j
Adding slack variables sm + 1, j ( j = 1, 2, . . ., n) in the last n constraints, we get
xij
j
n

1
= ai ; i = 1, 2, . . ., m
xij sm j
i
m


1
1
, = bj; j = 1, 2, . . ., n
sm j
j
n


1
1
,=b ja
j
n
i
i
m

−
11
= excess demand.
If am + 1 denotes the excess demand, then the modified transportation model can be stated as:
Minimize Z = cij xij cm j sm j
j
m
i
m


11
11

,, ej
subject to xij
j
n

1
= ai ; i = 1, 2, . . ., m + 1
xij
i
m

1
+ sm + 1, j = bj ; j = 1, 2, . . ., n
and xij ≥0 for all i, j
where cm + 1, j = 0, for all j and
ai
i
m

1
+ am + 1 = b j
j
n

1
or am + 1 = bj
j
n

1
– ai
i
m

1
It follows that if bj
j
n

1
> ai
i
m

1
, then a dummy row (supply centre) can be added to the transportation table
to account for excess demand quantity. The unit transportation cost here also for the cells in the dummy row is set
equal to zero.
PREVIEW

Assignment Problem
“We don’t have as many managers as we should, but we would rather have too few than too
many.”
– Larry Page
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
􀁺understand the features of assignment problems and transportation problems.
􀁺formulate an assignment problem as a square matrix.
􀁺apply the Hungarian method to solve an assignment problem.
􀁺make appropriate changes in the Hungarian method to solve an unbalanced assignment problem,
profit maximization assignment problem, etc.
􀁺solve a travelling salesman problem.
CHAPTER OUTLINE
10.1 Introduction
10.2 Mathematical Model of Assignment Problem
10.3 Solution Methods of Assignment Problem
Conceptual Questions A
Self Practice Problems A
Hints and Answers
10.4 Variations of the Assignment Problem
Conceptual Questions B
Self Practice Problems B
Hints and Answers
10.5 A Typical Assignment Problem
10.6 Travelling Salesman Problem
Self Practice Problems C
Hints and Answers
􀂉Chapter Summary
􀂉Chapter Concepts Quiz
􀂉Case Study
􀂉Appendix: Important Results and Theorems

10
Assignment Problem 311
Chapter
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
rooms, (v) vehicles to routes, (vi) contracts to bidders, etc.
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
.....
.....
.....
Wn cn1 cn2 . . . cnn 1
Demand 1 1 . . . 1 n
Suppose, xij represents the assignment of resource (facility) i to activity (job) j such that
1 if resource is assigned to activity
ij 0 otherwise
ij
x


Then mathematical model of the assignment problem can be stated as:
Minimize Z cx
i
n
j
n
ij ij


11
subject to the constraints

j
n
xij
1 = 1, for all i (resource availability)

i
n
xij
1 =1, for all j (activity requirement)
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.
Assignment table
is a convenient way
to summarize
available data.
Table 10.1
Assignment Data
Matrix
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
assignment problem that has a square matrix of order n should have m + n – 1 = n + n – l = 2n – 1
assignments. But due to the special structure of this problem, none of the solutions can have more than
n assignments. Consequently, solutions will be degenerate. To remove degeneracy, (n – 1) number of
dummy allocations (deltas or epsilons) will be required in order to proceed with MODI method. Thus, the
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:
Hungarian method
to solve an
assignment problem
is more efficient
than using simplex
method.
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
Table 10.3
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 (􀀹)
(b) Examine the marked rows. If any zero element is present in these rows, mark a tick (􀀹) to the respective
columns containing zeros.
(c) Examine marked columns. If any assigned zero element is present in these columns, tick (􀀹) 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.
Step 6: Develop the new revised opportunity cost matrix
(a) Among the elements in the matrix not covered by any line, choose the smallest element. Call this
value k.
(b) Subtract k from every element in the matrix that is not covered by a line.
(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
ABC
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
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
3 0 30 10 3 0 20 10
Table 10.2
Zeros in the
assignment table
indicate opportunity
cost and show the
penalty of not
making the least
cost (or best)
assignment.
Assignment Problem 315
Table 10.5
(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
C85000C85000
D04205D04205
E35608E35608
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 􀀹B 0 4 13 10 1
C 8 5 0 0 0 C 10 5 0 2 0
D 0 4 2 0 5 􀀹D 0 2 0 0 3
E 3 5 6 0 8 􀀹E 3 3 4 0 6
􀀹􀀹
Table 10.4
316 Operations Research: Theory and Applications
Table 10.7
Step 5: Cover the zeros with minimum number of lines (= 4) as explained below:
(a) Mark (􀀹) row D where there is no assignment.
(b) Mark (􀀹) columns I and IV since row D has zero element in these columns.
(c) Mark (􀀹) 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
D02003
E33406
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
BI3
CV2
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
E 76 64 56 112 68 E 2 0 0 0 2
Table 10.6
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
A22040A22240
B 6 4 0 10 2 􀀹B 4 2 0 8 0
C01012C01212
D 2 4 0 4 2 􀀹D 0 2 0 2 0
E20002E20202
􀀹
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 (􀀹) row D since it has no assignment.
(b) Mark (􀀹) column R since row D has zero in this column.
(c) Mark (􀀹) 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 􀀹A 2 1 2 3 0
B 4 2 0 8 0 􀀹B 4 1 0 7 0
C 0 1 2 1 2 􀀹C 0 0 2 0 2
D 0 2 0 2 0 􀀹D 0 1 0 1 0
E20202E30303
􀀹􀀹􀀹
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:
Table 10.8
Table 10.9
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.
2. Give the mathematical formulation of an assignment problem.
How does it differ from a transportation problem?
3. Explain the conceptual justification that an assignment problem
can be viewed as a linear programming problem.
4. Explain the difference between a transportation problem and an
assignment problem.
5. Specify the dual of an assignment problem. What are the
techniques used for solving an assignment problem?
6. State and discuss the methods of solving an assignment
problem. How is the Hungarian method better than other methods
for solving an assignment problem?
7. (a) Give an algorithm to solve an assignment problem.
(b) Show that an assignment problem is a special case of a
transportation problem.
8. Explain how an assignment problem can be solved by using the
transportation approach?
SELF PRACTICE PROBLEMS A
1. Five men are available to do five different jobs. From past
records, the time (in hours) that each man takes to do each job
is known and is given in the following table:
Jobs
I II III IV V
A29271
B68761
Men C 4 6 5 3 1
D42731
E53951
Find out how men should be assigned the jobs in way that will
minimize the total time taken.
2. A pharmaceutical company producing a single product sold it
through five agencies situated in different cities. All of a sudden,
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
in order to despatch the product to needy cities in such a way
that the travelling distance is minimized. The distance between the
surplus and deficit cities (in km) is given in the following table.
Deficit cities
abcde
A 160 130 115 190 200
B 135 120 130 160 175
Surplus Cities C 140 110 125 170 185
D 50 50 80 80 110
E 55 35 80 80 105
Determine the optimum assignment schedule

An automobile dealer wishes to put four repairmen to four

different jobs. The repairmen have somewhat different kinds of
skills and they exhibit different levels of efficiency from one job
to another. The dealer has estimated the number of man-hours
that would be required for each job-man combination. This is
given in matrix form in the following table:
Jobs
ABCD
15328
27926
Men
36457
45778
Find the optimal assignment that will result in minimum manhours
Needed

9. The XYZ and ABC are both a chain of chinese foods restaurants
located in Delhi. Both chains are financially strong enough to
expand. The only viable manner in which this may be
accomplished is for each chain to open stores in other cities.
The following payoff (in Rs) tables provide the anticipated
average profit levels over the next five years for the various
courses of action.
XYZ’s Profits
ABC doesn’t ABC
expand expands
XYZ doesn’t expand 5,00,000 – 2,00,000
XYZ expands 8,00,000 2,00,000
ABC’s Profits
ABC doesn’t ABC
expand expands
XYZ doesn’t expand 4,00,000 5,00,000
XYZ expands – 4,00,000 60,000
(a) Is this situation a zero-sum game? Explain.
(b) Find the equilibrium courses of action, if any.
(c) If the two firms can cooperate, what course of action would
each prefer
Two competitive manufacturers are producing a new toy under
licence from a patent holder. In order to meet the demand they
have the option of running the plant for 8, 16 or 24 hours a day.
As the length of production increases so does the cost. One of
the manufacturers, say A, has set up the matrix given below.
He uses the matrix to estimate the percentage of the market that
he could capture and maintain the different production schedules:
Manufacturer B
Manufacturer A C1 : 8 hrs C2 : 16 hrs C3 : 24 hrs
S1 : 18 hrs 60% 56% 34%
S2 : 16 hrs 63% 60% 55%
S3 : 24 hrs 83% 72% 60%
(i) At which level should each produce?
(ii) What percentage of the market will B have?