Chapter 9

Transportation and
Assignment Models

To accompany
Quantitative Analysis for Management, Eleventh Edition, Global Edition
by Render, Stair, and Hanna
Power Point slides created by Brian Peterson
 Learning Objectives
After completing this chapter, students will be able to:

1. Structure LP problems using the transportation,

transshipment and assignment models.
2. Use the northwest corner and stepping-stone
methods.
3. Solve facility location and other application
problems with transportation models.
4. Solve assignment problems with the Hungarian
(matrix reduction) method.

Copyright © 2012 Pearson Education 9-2

 Chapter Outline
9.1 Introduction
9.2 The Transportation Problem
9.3 The Assignment Problem
9.4 The Transshipment Problem
9.5 The Transportation Algorithm
9.6 Special Situations with the Transportation
Algorithm
9.7 Facility Location Analysis
9.8 The Assignment Algorithm
9.9 Special Situations with the Assignment
Algorithm

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 Introduction
◼ In this chapter we will explore three special
linear programming models:
◼ The transportation problem.
◼ The assignment problem.
◼ The transshipment problem.
◼ These problems are members of a
category of LP techniques called network
flow problems.

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 The Transportation Problem
◼ The transportation problem deals with the
distribution of goods from several points
of supply (sources) to a number of points
of demand (destinations).
◼ Usually we are given the capacity of goods
at each source and the requirements at
each destination.
◼ Typically the objective is to minimize total
transportation and production costs.

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 The Transportation Problem

◼ The Executive Furniture Corporation

manufactures office desks at three locations: Des
Moines, Evansville, and Fort Lauderdale.
◼ The firm distributes the desks through regional
warehouses located in Boston, Albuquerque, and
Cleveland.

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 The Transportation Problem
Network Representation of a Transportation Problem,
with Costs, Demands and Supplies

Executive Furniture Company

Factories Warehouses
Supply (Sources) (Destinations) Demand
$5
100 Units Des Moines Albuquerque 300 Units
$4
$3
$8
300 Units Evansville $4 Boston 200 Units
$3
$9
$7
300 Units Fort Lauderdale Cleveland 200 Units
$5

Figure 9.1

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 Linear Programming for the
Transportation Example
◼ Let Xij = number of units shipped from source i to
destination j,
◼ Where:
◼ i = 1, 2, 3, with 1 = Des Moines, 2 = Evansville, and 3 = Fort
Lauderdale
◼ j = 1, 2, 3, with 1 = Albuquerque, 2 = Boston, and 3 = Cleveland.

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 Linear Programming for the
Transportation Example
◼ Minimize total cost = 5X11 + 4X12 + 3X13 +
8X21 + 4X22 + 3X23
+ 9X31 +7X32 + 5X33
◼ Subject to:
◼ X11 + X12 + X13 ≤ 100 (Des Moines supply)
◼ X21 + X22 + X23 ≤ 300 (Evansville supply)
◼ X31 + X32 + X33 ≤ 300 (Fort Lauderdale supply)
◼ X11 + X21 + X31 = 300 (Albuquerque demand)
◼ X12 + X22 + X32 = 200 (Boston demand)
◼ X13 + X23 + X33 = 200 (Cleveland demand)
◼ Xij ≥ 0 for all i and j.
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 Executive Furniture Corporation
Solution in Excel 2010

Program 9.1

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 A General LP Model for
Transportation Problems
◼ Let:
◼ Xij = number of units shipped from
source i to destination j.
◼ cij = cost of one unit from source i to
destination j.
◼ si = supply at source i.
◼ dj = demand at destination j.

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 A General LP Model for
Transportation Problems
Minimize cost =
Subject to:

i = 1, 2,…, m.

j = 1, 2, …, n.

xij ≥ 0 for all i and j.

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 The Assignment Problem

◼ This type of problem determines the

most efficient assignment of people
to particular tasks, etc.
◼ Objective is typically to minimize
total cost or total task time.

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 Linear Program for
Assignment Example
◼ The Fix-it Shop has just received
three new repair projects that must
be repaired quickly: a radio, a toaster
oven, and a coffee table.
◼ Three workers with different talents
are able to do the jobs.
◼ The owner estimates the cost in
wages if the workers are assigned to
each of the three jobs.
◼ Objective: minimize total cost.
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 Example of an Assignment Problem in
a Transportation Network Format

Figure 9.2

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 Linear Program for
Assignment Example
Let:
◼ Xij = 1 if person i is assigned to project j, or
0 otherwise.
Where:
◼ i = 1,2,3 with 1 = Adams, 2 = Brown, and 3 =
Cooper
◼ j = 1,2,3, with 1 = Project 1, 2 = Project 2, and 3
= Project 3.

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 Linear Program for
Assignment Example
Minimize total cost = 11X11 + 14X12 +
6X13 + 8X21 + 10X22 + 11X23 + 9X31
+ 12X32 + 7X33
Subject to:
◼ X11 + X12 + X13 ≤ 1
◼ X21 + X22 + X23 ≤ 1
◼ X31 + X32 + X33 ≤ 1
◼ X11 + X21 + X31 = 1
◼ X12 + X22 + X32 = 1
◼ X13 + X23 + X33 = 1
◼ Xij = 0 or 1 for all i and j

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 Fix-it Shop Solution in Excel 2010

Program 9.2

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 Linear Program for
Assignment Example
◼ X13 = 1, so Adams is assigned to
project 3.
◼ X22 = 1, so Brown is assigned to
project 2.
◼ X31 = 1, so Cooper is assigned to
project 3.
◼ Total cost of the repairs is $25.

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 Transshipment Applications
When the items are being moved from a source to a
destination through an intermediate point (a
transshipment point), the problem is called a
transshipment problem.

Distribution Centers
◼ Frosty Machines manufactures snow blowers in Toronto and
Detroit.
◼ These are shipped to regional distribution centers in Chicago
and Buffalo.
◼ From there they are shipped to supply houses in New York,
Philadelphia, and St Louis.
◼ Shipping costs vary by location and destination.
◼ Snow blowers cannot be shipped directly from the factories to
the supply houses.
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 Network Representation of
Transshipment Example

Figure 9.3
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 Transshipment Applications
Frosty Machines Transshipment Data
TO
NEW YORK
FROM CHICAGO BUFFALO CITY PHILADELPHIA ST LOUIS SUPPLY
Toronto $4 $7 — — — 800

Detroit $5 $7 — — — 700

Chicago — — $6 $4 $5 —

Buffalo — — $2 $3 $4 —

Demand — — 450 350 300

Table 9.1

Frosty would like to minimize the transportation costs

associated with shipping snow blowers to meet the demands
at the supply centers given the supplies available.
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 Transshipment Applications

A description of the problem would be to

minimize cost subject to:
1. The number of units shipped from Toronto is not more
than 800.
2. The number of units shipped from Detroit is not more
than 700.
3. The number of units shipped to New York is 450.
4. The number of units shipped to Philadelphia is 350.
5. The number of units shipped to St Louis is 300.
6. The number of units shipped out of Chicago is equal to
the number of units shipped into Chicago.
7. The number of units shipped out of Buffalo is equal to
the number of units shipped into Buffalo.

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 Transshipment Applications
The decision variables should represent the number of units
shipped from each source to the transshipment points and
from there to the final destinations.
X13 = the number of units shipped from Toronto to Chicago
X14 = the number of units shipped from Toronto to Buffalo
X23 = the number of units shipped from Detroit to Chicago
X24 = the number of units shipped from Detroit to Buffalo
X35 = the number of units shipped from Chicago to New York
X36 = the number of units shipped from Chicago to Philadelphia
X37 = the number of units shipped from Chicago to St Louis
X45 = the number of units shipped from Buffalo to New York
X46 = the number of units shipped from Buffalo to Philadelphia
X47 = the number of units shipped from Buffalo to St Louis

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 Transshipment Applications
The linear program is:
Minimize cost = 4X13 + 7X14 + 5X23 + 7X24 + 6X35 +
4X36 + 5X37 + 2X45 + 3X46 + 4X47
subject to
X13 + X14 ≤ 800 (supply at Toronto)
X23 + X24 ≤ 700 (supply at Detroit)
X35 + X45 = 450 (demand at New York)
X36 + X46 = 350 (demand at Philadelphia)
X37 + X47 = 300 (demand at St Louis)
X13 + X23 = X35 + X36 + X37 (shipping through Chicago)
X14 + X24 = X45 + X46 + X47 (shipping through Buffalo)
Xij ≥ 0 for all i and j (nonnegativity)

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 Solution to Frosty Machines
Transshipment Problem

Program 9.3

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 The Transportation Algorithm

◼ This is an iterative procedure in which a

solution to a transportation problem is
found and evaluated using a special
procedure to determine whether the
solution is optimal.
◼ When the solution is optimal, the process
stops.
◼ If not, then a new solution is generated.

Copyright © 2012 Pearson Education 9-27

 Transportation Table for Executive
Furniture Corporation
Des Moines
capacity
constraint

TO WAREHOUSE WAREHOUSE WAREHOUSE

AT AT AT FACTORY
FROM ALBUQUERQUE BOSTON CLEVELAND CAPACITY

DES MOINES $5 $4 $3
100
FACTORY

EVANSVILLE $8 $4 $3
300
FACTORY

FORT LAUDERDALE $9 $7 $5
300
FACTORY

WAREHOUSE
300 200 200 700
REQUIREMENTS
Cell representing a
Total supply source-to-destination
Table 9.2 Cost of shipping 1 unit from Cleveland (Evansville to Cleveland)
Fort Lauderdale factory to and demand
warehouse shipping assignment
Boston warehouse demand that could be made
Copyright © 2012 Pearson Education 9-28
 Developing an Initial Solution:
Northwest Corner Rule
◼ Once we have arranged the data in a table, we
must establish an initial feasible solution.
◼ One systematic approach is known as the
northwest corner rule.
◼ Start in the upper left-hand cell and allocate units
to shipping routes as follows:
1. Exhaust the supply (factory capacity) of each row
before moving down to the next row.
2. Exhaust the demand (warehouse) requirements of each
column before moving to the right to the next column.
3. Check that all supply and demand requirements are
met.
◼ This problem takes five steps to make the initial
shipping assignments.
Copyright © 2012 Pearson Education 9-29
 Developing an Initial Solution:
Northwest Corner Rule
1. Beginning in the upper left hand corner, we
assign 100 units from Des Moines to
Albuquerque. This exhaust the supply from Des
Moines but leaves Albuquerque 200 desks short.
We move to the second row in the same column.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

Copyright © 2012 Pearson Education 9-30

 Developing an Initial Solution:
Northwest Corner Rule
2. Assign 200 units from Evansville to Albuquerque.
This meets Albuquerque’s demand. Evansville
has 100 units remaining so we move to the right
to the next column of the second row.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

Copyright © 2012 Pearson Education 9-31

 Developing an Initial Solution:
Northwest Corner Rule
3. Assign 100 units from Evansville to Boston. The
Evansville supply has now been exhausted but
Boston is still 100 units short. We move down
vertically to the next row in the Boston column.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 100 300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

Copyright © 2012 Pearson Education 9-32

 Developing an Initial Solution:
Northwest Corner Rule
4. Assign 100 units from Fort Lauderdale to Boston.
This fulfills Boston’s demand and Fort
Lauderdale still has 200 units available.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 100 300
(E)

FORT LAUDERDALE $9 $7 $5
100 300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

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 Developing an Initial Solution:
Northwest Corner Rule
5. Assign 200 units from Fort Lauderdale to
Cleveland. This exhausts Fort Lauderdale’s
supply and Cleveland’s demand. The initial
shipment schedule is now complete.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 100 300
(E)

FORT LAUDERDALE $9 $7 $5
100 200 300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

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Table 9.3
 Developing an Initial Solution:
Northwest Corner Rule
The cost of this shipping assignment:

ROUTE
UNITS PER UNIT TOTAL
FROM TO SHIPPED x COST ($) = COST ($)
D A 100 5 500
E A 200 8 1,600
E B 100 4 400
F B 100 7 700
F C 200 5 1,000
4,200

This solution is feasible but we need to check to see

if it is optimal.
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