Transportation and

Assignment Model
The Transportation Method of linear
programming is applied to the problems related
to the study of the efficient transportation
routes i.e. how efficiently the product from
different sources of production is transported to
the different destinations, such as the total
transportation cost is minimum.
The prerequisite condition for solving the
transportation problem is that demand should
be equal to the supply. In case the demand is
more than supply, then dummy origin is added
to the table. The supply of dummy origin will be
equal to the difference between the total supply
and total demand. The cost associated with the
dummy origin will be zero.
For solving the transportation problem, the
following steps are to be systematically
followed:
1. Obtaining the initial feasible solution, which
means identifying the solution that satisfies
the requirements of demand and supply. 
There are several methods through which the
initial feasible solution can be obtained; these
are:
a) North-West Corner Method
b) Least Cost Method
c) Vogel’s Approximation Method
2. Testing the optimality of the initial feasible
solution. Once the feasible solution is obtained,
the next step is to check whether it is optimum
or not. There are two methods used for testing
the optimality:
a) Stepping-stone Method
b) Modified Distribution Method (MODI)
3. The final step is to revise the solution until
the optimum solution is obtained.
Wheat is harvested in the Midwest and stored in grain
elevators in three different cities—Kansas City, Omaha,
and Des Moines. These grain elevators supply three
flour mills, located in Chicago, St. Louis, and Cincinnati.
Grain is shipped to the mills in railroad cars, each of
which is capable of holding one ton of wheat. Each
grain elevator is able to supply the following number of
tons (i.e., railroad cars) of wheat to the mills on a
monthly basis:
Grain Elevator Supply
1. Kansas City 150
2. Omaha 175
3. Des Moines 275
Total 600 tons
Each mill demands the following number of tons of
wheat per month.
Mill Demand
A. Chicago 200
B. St. Louis 100
C. Cincinnati 300
Total 600 tons

The cost of transporting one ton of wheat from each

grain elevator (source) to each mill (destination) differs
according to the distance and rail system. These costs
are shown in the following table.
For example, the cost of shipping one ton of
wheat from the grain elevator at Omaha to the
mill at Chicago is $7.
The problem is to determine how many tons of
wheat to transport from each grain elevator
to each mill on a monthly basis in order to
minimize the total cost of transportation.
The linear programming model for this problem is
formulated in the equations that follow:
minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B +
11x2C + 4x3A + 5x3B + 12x3c
Subject to: x1A + x1B + x1C = 150
x2A + x2B + x2C = 175
x3A + x3B + x3C = 275
x1A + x2A + x3A = 200 100 300
x1B + x2B + x3B = 100
x1C + x2C + x3C = 175
xij ≥ 0
Transportation Tableu
Initial Solution: North-West Corner Method

150

50 100 25

275

Z= 6(150) + 7(150)+ 11(100) + 11(25) + 12(275) = $5,925

The steps of the northwest corner method are
summarized here:
1. Allocate as much as possible to the cell in the
upper left-hand corner, subject to the
supply and demand constraints.
2. Allocate as much as possible to the next adjacent
feasible cell.
3. Repeat step 2 until all rim requirements have
been met.
 Initial Solution: Least Cost Method

25 125

175

200 75

Z = 4(200) + 5(75) + 8(25 )+ 10(125) + 11(175) = $4,550

The specific steps of the least cost or minimum
cell cost method are summarized next:
1. Allocate as much as possible to the feasible
cell with the minimum transportation
cost, and adjust the rim requirements.
2. Repeat step 1 until all rim requirements have
been met.
 Initial Solution: Vogel’s Approximation
Model (VAM)
Subtract the minimum cell cost from the next higher
cell
cost in each row and column.

Since row 2 has the highest penalty cost of 4

$4, we allocate as much as possible the
feasible cell in these row with the minimum 1
cost. In this row, lowest cost is $7.

2 3 1
 Initial Solution: Vogel’s Approximation
Model (VAM)

150 2

175 Highest penalty (4), lowest 4

cost(7)
25 100 150 1

2 3 1
Z = 7(175)+ 5(100) + 4(25) + 10(150) + 12(150) = $5,125
The steps of Vogel’s approximation model can be
summarized in the following list:
1. Determine the penalty cost for each row and
column by subtracting the lowest cell cost in the
row or column from the next lowest cell cost in
the same row or column.
2. Select the row or column with the highest
penalty cost (breaking ties arbitrarily or choosing
the lowest-cost cell).
3. Allocate as much as possible to the feasible cell
with the lowest transportation cost in the row or
column with the highest penalty cost.
4. Repeat steps 1, 2, and 3 until all rim requirements have
been met.
Once an initial basic feasible solution has been
determined by any of the previous three
methods, the next step is to solve the model for
the optimal (i.e., minimum total cost) solution.
The two basic solution methods:
1. stepping-stone solution method
2. modified distribution method (MODI).
 The Stepping-Stone Solution Method
Because the initial solution obtained by the least
cost method had the lowest total cost of the
three initial solutions, we will use it as the
starting solution.
Recall:
North-West Corner, Z = $5,925
Least Cost solution, Z = $4,550
Vogel’s Approximation, Z = $5,125
The Stepping-Stone Solution Method
Always start with an empty cell and form a closed
path of cells that now have allocations.

+1 -1
25 125

175
-1
200 75 +1

1A-1B-3B-3A = $6 – 8 + 5 – 4 = - $1 (cost reduced)

 2A

2A-2C-1C-1B-3B-3A = 7-11+ 10 - 8+ 5 - 4 = - $1
2B-2C-1C-1B = 11 – 11 + 10 – 8 = $2
3C-1C-1B-3B = 12 – 10 + 8 – 5 = $5
Since cost is reduced at 1A-1B-3B-3A = $6 – 8 + 5 – 4 = - $1

25

175 100

Z = 6(25)+4(175)+5(100)+10(125)+11(175) = $4,425
The Modified Distribution Method

The modified distribution method (MODI) is

basically a modified version of the
stepping –stone method.
The Unbalanced Transportation Model
The addition of a dummy row or a dummy column has
no effect on the initial solution methods or on the
methods for determining an optimal solution. The
dummy row or column cells are treated the same as any
other tableau cell.
 Assignment Model
The assignment model is a special form of a
linear programming model that is similar to the
transportation model. There are differences,
however. In the assignment model, the supply at
each source and the demand at each destination
are limited to one unit each.
Example: The Atlantic Coast Conference has four
basketball games on a particular night. The
conference office wants to assign four teams of
officials to the four games in a way that will
minimize the total distance travelled by the
officials. The distances in miles for each team of
officials to each game location are shown
Game Sites
Officials RALEIGH ATLANTA DURHAM CLEMSON
A 210 90 180 160
B 100 70 130 200
C 175 105 140 170
D 80 65 105 120
The first step in the assignment method of solution is
to develop an opportunity cost table. We accomplish
this by first subtracting the minimum value in each
row from every value in the row. These computations
are referred to as row reductions. We applied a
similar principle in the VAM method when we
determined penalty costs. In other words, the best
course of action is determined for each row, and the
penalty or “lost opportunity” is developed for all
other row values
 Game Sites
Officials RALEIGH ATLANTA DURHAM CLEMSON
A 210 90 180 160 90
B 100 70 130 200 60
C 175 105 140 170 35
D 80 65 105 120 15
20 5 25 40

Game Sites
Offi cials RALEIGH ATLANTA DURHAM CLEMSON
A 120 0 90 70
B 30 0 60 130
C 70 0 35 65
D 15 0 40 55
Next, the minimum value in each column is subtracted
from all column values. These computations are called
column Game
reductions.
Sites
Offi cials RALEIGH ATLANTA DURHAM CLEMSON
A 120 0 90 70
B 30 0 60 130
C 70 0 35 65
D 15 0 40 55
Game Sites
Offi cials RALEIGH ATLANTA DURHAM CLEMSON
A 105 0 55 15
B 15 0 25 75
C 55 0 0 10
D 0 0 5 0
Notice in the table that the assignment of team
A to Atlanta means that no other team can be
assigned to that game. Once this assignment is
made, the zero in row B is infeasible, which
indicates that there is not a unique optimal
assignment for team B
 A test to determine whether four unique
assignments exist in the table is to draw the
minimum number of horizontal or vertical lines
necessary to cross out all zeros through the rows
and columns of the table
 The three lines indicate that there are only three
unique assignments, whereas four are required for an
optimal solution. (Note that even if the three lines
could have been drawn differently, the subsequent
solution method would not be affected.) Next, subtract
the minimum value that is not crossed out from all
values not crossed out. Then, add this minimum value
to those cells where two lines intersect. The minimum
value not crossed out in table is 15

90 40 0
0 10 60
15
15
 90 40 0
0 10 60
15
15

Game Sites
Offi cials RALEIGH ATLANTA DURHAM CLEMSON
A 90 0 40 0
B 0 0 10 60
C 55 15 0 10
D 0 15 5 0
 Game Sites
Offi cials RALEIGH ATLANTA DURHAM CLEMSON
A 90 0 40 0
B 0 0 10 60
C 55 15 0 10
D 0 15 5 0

No matter how the lines are drawn in the table,

at least four are required to cross out all the
zeros. This indicates that four unique
assignments can be made and that an optimal
solution has been reached. Now let us make the
assignments from the table
 Game Sites
Offi cials RALEIGH ATLANTA DURHAM CLEMSON
A 90 0 40 0
B 0 0 10 60
C 55 15 0 10
D 0 15 5 0

First, team A can be assigned to either the Atlanta game or the

Clemson game. We will assign team A to Atlanta first. This
means that team A cannot be assigned to any other game, and
no other team can be assigned to Atlanta. Therefore, row A and
the Atlanta column can be eliminated. Next, team B is assigned
to Raleigh. (Team B cannot be assigned to Atlanta, which has
already been eliminated.) The third assignment is of team C to
the Durham game. This leaves team D for the Clemson game.
To summarize:
Assignment Distance
Team A Atlanta 90
Team B Raleigh 100
Team C Durham 140
Team D Clemson 120
Total 450 miles
The steps of the assignment solution method are summarized
here:
1. Perform row reductions by subtracting the minimum value in
each row from all row values.
2. Perform column reductions by subtracting the minimum value
in each column from all column values.
3. In the completed opportunity cost table, cross out all zeros,
using the minimum number of horizontal or vertical lines.
4. If fewer than m lines are required (where the number of rows
or columns), subtract the minimum uncrossed value from all
uncrossed values, and add this same minimum value to all cells
where two lines intersect. Leave all other values unchanged,
and repeat step 3.
5. If m lines are required, the tableau contains the optimal
solution and m unique assignments can be made. If fewer than
m lines are required, repeat step 4.
 Like a transportation problem, an assignment model
can be unbalanced when supply exceeds demand or
demand exceeds supply. For example, assume that,
instead of four teams of officials, there are five teams
to be assigned to the four games. In this case a dummy
column is added to the assignment tableau to balance
the model
Self-Test
Consider the following transportation problem:

Find the initial solution by using VAM and then

solve it using the stepping-stone method.