Transportation and Assignment Problems

Part 2 Deterministic Decision Models

Learning Objectives
After completing this chapter, you should be able to: 1. Use the transportation method to solve problems manually. 2. Deal with special cases in solving transportation problems. 3. Use the assignment (Hungarian) method to solve problems manually. 4. Deal with special cases in solving assignment problems.

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Transportation Problems
Transportation Problem
A distribution-type problem in which supplies of goods that are held at various locations are to be distributed to other receiving locations. The solution of a transportation problem will indicate to a manager the quantities and costs of various routes and the resulting minimum cost.

Used to compare location alternatives in deciding where to locate factories and warehouses to achieve the minimum cost distribution configuration.

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Formulating the Model

A transportation problem Typically involves a set of sending locations, which are referred to as origins, and a set of receiving locations, which are referred to as destinations. To develop a model of a transportation problem, it is necessary to have the following information: 1. Supply quantity (capacity) of each origin. 2. Demand quantity of each destination. 3. Unit transportation cost for each origindestination route.

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Assignment Problems
The Assignment-type Problems
Involve the matching or pairing of two sets of items such as jobs and machines, secretaries and reports, lawyers and cases, and so forth. Have different cost or time requirements for different pairings.

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Special Cases of Transportation Problems Maximization

Transportation-type problems that concern profits or revenues rather than costs with the objective to maximize profits rather than to minimize costs.

Unacceptable Routes
Certain origin-destination combinations may be unacceptable due to weather factors, equipment breakdowns, labor problems, or skill requirements that either prohibit, or make undesirable, certain combinations (routes).

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Special Cases of Transportation Problems (contd) Unequal Supply and Demand

Situations in which supply and demand are not equal such that it is necessary to modify the original problem so that supply and demand are equalized. Quantities in dummy routes in the optimal solution are not shipped and serve to indicate which supplier will hold the excess supply, and how much, or which destination will not receive its total demand, and how much it will be short.

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Figure 1 Schematic of a Transportation Problem

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Table 1 Transportation Table for Harleys Sand and Gravel

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Table 1 Transportation Table for Harleys Sand and Gravel

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Figure 1

Overview of the Transportation Method

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Finding an Initial Feasible Solution: The Northwest-Corner Method

The Northwest-Corner Method
is a systematic approach for developing an initial feasible solution. is simple to use and easy to understand. does not take transportation costs into account. gets its name because the starting point for the allocation process is the upper-left-hand (northwest) corner of the transportation table.

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Table 2 Initial Feasible Solution for Harley Using NorthwestCorner Method

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Finding an Initial Feasible Solution: The Intuitive Approach

1. Identify the cell that has the lowest unit cost.

2. Cross out the cells in the row or column that has been exhausted (or both, if both have been exhausted), and adjust the remaining row or column total accordingly. 3. Identify the cell with the lowest cost from the remaining cells.

4. Repeat steps 2 and 3 until all supply and demand have been allocated.

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Table 3a

Table 3a

Find the Cell That Has the Lowest Unit Cost

Table 3b

Allocate 150 Units to Cell B2

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Table 4

200 Units Are Assigned to Cell C3 and 50 Units Are Assigned to cell A1

Table 5

Completion of the Initial Feasible Solution for the Harley Problem Using the Intuitive Approach

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Table 6

Vogels Approximation Initial Allocation Tableau with Penalty Costs

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Stepping Stone Paths Evaluation Method

Rules for Tracing Stepping-Stone Paths

1. All unoccupied cells must be evaluated. Evaluate cells one at a time. 2.Except for the cell being evaluated, only add or subtract in occupied cells. (It is permissible to skip over occupied cells to find an occupied cell from which the path can continue.) 3.A path will consist of only horizontal and vertical moves, starting and ending with the empty cell that is being evaluated.

4.Alternate + and - signs, beginning with a + sign in the cell being evaluated.

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Table 7

Initial Feasible Solution Obtained Using the Northwest-Corner Method

Table 8

Evaluation Path for Cell B1

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Table 9

Evaluation Path for Cell C1

Table 10

Evaluation Paths for Cells A3 and C2

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Table 11

Initial Feasible Solution Obtained Using the Northwest-Corner Method

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Table 12

Index Numbers for Initial Northwest-Corner Solution to the Harley Problem

Evaluation Using the MODI Method The MODI (MOdified DIstribution) method of evaluating a transportation solution for optimality involves the use of index numbers that are established for the rows and columns. These are based on the unit costs of the occupied cells. The index numbers can be used to obtain the cell evaluations for empty cells without the use of stepping-stone paths.

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Table 12

Index Numbers for Initial Northwest-Corner Solution to the Harley Problem

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Table 13

Cell Evaluations for Northwest-Corner Solution for the Harley Problem

Table 14

Stepping-Stone Path for Cell A3

Developing an Improved Solution

Table 14

Stepping-Stone Path for Cell A3

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Table 15

Distribution Plan after Reallocation of 50 Units

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Summary of the Transportation Method

1. Obtain an initial feasible solution. Use either the northwest-corner method, the intuitive method, or the Vogels approximation method. Generally, the intuitive method and Vogels approximation are the preferred approaches.
2. Evaluate the solution to determine if it is optimal. Use either the stepping-stone method or MODI. The solution is not optimal if any unoccupied cell has a negative cell evaluation. 3. If the solution is not optimal, select the cell that has the most negative cell evaluation. Obtain an improved solution using the stepping-stone method. 4. Repeat steps 2 and 3 until no cell evaluations (reduced costs) are negative. Once you have identified the optimal solution, compute its total cost.

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Special Issues
1. Determining if there are alternate optimal solutions.

2. Recognizing and handling degeneracy (too few occupied cells to permit evaluation of a solution).
3. Avoiding unacceptable or prohibited route assignments. 4. Dealing with problems in which supply and demand are not equal. 5. Solving maximization problems.

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Alternate optimal solutions

Table 16 Index Numbers and Cell Evaluations

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Table 17a

Index Numbers and Cell Evaluations

Table 17b

Alternate Optimal Solution

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Degeneracy

Table 18

Harley Alternate Solution Modified for Degeneracy

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Unacceptable Routes

Table 19

Solution to Harley Problem with a Prohibited Route

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Unequal Demand and Supply

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Table 20

A Dummy Origin Is Added to Make Up 80 Units

Table 21

Solution Using the Dummy Origin

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Table 21

Solution Using the Dummy Origin

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The Hungarian Method

Provides a simple heuristic that can be used to find the optimal set of assignments.
Is easy to use, even for fairly large problems.

Is based on minimization of opportunity costs that would result from potential pairings.
These additional costs would be incurred if the lowest-cost assignment is not made, in terms of either jobs (i.e., rows) or employees (i.e., columns).

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Requirements for Use of the Hungarian Method

Situations in which the Hungarian method can be used are characterized by the following:
1. There needs to be a one-for-one matching of two sets of items. 2. The goal is to minimize costs (or to maximize profits) or a similar objective (e.g., time, distance, etc.). 3. The costs or profits (etc.) are known or can be closely estimated.

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Special Situations
Special Situations Certain situations can arise in which the model deviates slightly from that previously described. Among those situations are the following: The number of rows does not equal the number of columns. The problem involves maximization rather than minimization. Certain matches are undesirable or not allowed. Multiple optimal solutions exist.

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Table 22

Solution Using the Dummy Origin

The Hungarian Method provides a simple heuristic that can be used to find the optimal set of assignments. It is easy to use, even for fairly large problems. It is based on minimization of opportunity costs that would result from potential pairings. These are additional costs that would be incurred if the lowest-cost assignment is not made, in terms of either jobs (i.e., rows) or employees (i.e., columns).

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Table 23

Row Reduction

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Table 24

Column Reduction of Opportunity (Row Reduction) Costs

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Table 25

Determine the Minimum Number of Lines Needed to Cover the Zeros

Table 26

Further Revision of the Cost Table

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Table 27

Optimal Assignment

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