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Easwari Engineering College: Department of Management Studies

The document discusses a balanced transportation problem and its solution methods. It defines a transportation problem as distributing a product from multiple sources to destinations at minimum cost. A balanced problem has total supply equal to total demand. It describes the North-West Corner method, Least Cost method, and Vogel's Approximation method to find initial basic feasible solutions. It then introduces the MODI method to iteratively find the optimal solution by calculating cell values and adjusting allocations along closed loops until all cell values are non-negative. The document notes applications of transportation problems in business for profit maximization and efficient distribution.

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Madhu Subramanian
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71 views13 pages

Easwari Engineering College: Department of Management Studies

The document discusses a balanced transportation problem and its solution methods. It defines a transportation problem as distributing a product from multiple sources to destinations at minimum cost. A balanced problem has total supply equal to total demand. It describes the North-West Corner method, Least Cost method, and Vogel's Approximation method to find initial basic feasible solutions. It then introduces the MODI method to iteratively find the optimal solution by calculating cell values and adjusting allocations along closed loops until all cell values are non-negative. The document notes applications of transportation problems in business for profit maximization and efficient distribution.

Uploaded by

Madhu Subramanian
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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EASWARI ENGINEERING COLLEGE

DEPARTMENT OF MANAGEMENT STUDIES


APPLIED OPERATIONS RESEARCH
TOPIC:
BALANCED TRANSPORTATION PROBLEM AND ITS
APPLICATIONS
PRESENTATION BY
HARIHARAN.B (19631034)
What is Transportation Problem ?

• The transportation problem is a special type of linear programming problem


where the objective is to minimize the cost of distributing a product from a
number of sources or origins to a number of destinations.
• These problems require a special method of solution. The origin of a
transportation problem is the location from which shipments are despatched.
• The destination of a transportation problem is the location to which shipments
are transported. The unit transportation cost is the cost of transporting one
unit of the consignment from an origin to a destination.
•  Because of its special structure the usual simplex method is not suitable for
solving transportation problems.
Transportation Problem

• The problem of finding the minimum-cost distribution of a given commodity


from a group of supply centers (sources) i =1,…,m to a group of receiving
centers (destinations) j =1,…,n
•  Each source has a certain supply ( ) and Each destination has a certain
demand ( )
• The cost of shipping from a source to a destination is directly proportional to
the number of units shipped.
Two Types of Transportation Problem
• Balanced Transportation • Unbalanced Transportation
Problem, where the total Problem, where the total
supply equals total demand supply is not equal to the total
demand

• TOTAL SUPPLY = TOTAL • TOTAL SUPPLY ≠ TOTAL


DEMAND
DEMAND
Steps in Transportation Problem

Step 1:Obtaining the Initial Step 2 :Obtaining the


basic feasible solution optimal basic solution
Methods to obtaining Initial Basic Methods to obtain Optimal basic
feasible solution solution
North-West corner method  Modified Distribution method (MODI Method)
Least cost Method (Matrix Minima Method)  Stepping Stone Method
Vogel’s Approximation Method (Penalty
Method)
North-West Corner Method
• Step 1: Select the upper left corner cell of the
transportation matrix and allocate min(s1, d1)
destination
• Step 2: supply
a. Subtract this value from supply and demand of 1 2 3 4
respective row and column.

source
b. If the supply is 0, then cross (strike) that row 1 3 1 7 4 300
and move down to the next cell
c. If the demand is 0, then cross (strike) that column 2 2 6 5 9 400
and move right to the next cell
d. If supply and demand both are 0, then cross (strike) 3 8 3 3 2 500
both row & column and move diagonally to the next
cell
demand 250 350 400 200 1200
• Step 3: Repeat this steps until all supply and demand
values are 0.
Least Cost Method
• Step 1: Select the cell having minimum unit cost  and allocate as much as possible,
i.e. min(, ).
• Step 2:
a) Subtract this min value from supply   and demand 

•
b)   If the supply    is 0, then cross (strike) that row and If the demand   is 0 then cross
(strike) that column.
c) If min unit cost cell is not unique, then select the cell where maximum allocation can
be possible
• Step 3: Repeat this steps for all uncrossed (unstriked) rows and columns until all
supply and demand values are 0.
Vogel’s Approximation Method
• Step 1: Find the cells having smallest and next to smallest cost in each row and
write the difference (called penalty) along the side of the table in row penalty
• Step 2: Find the cells having smallest and next to smallest cost in each column and
write the difference (called penalty) along the side of the table in each column penalty.
• Step 3: Select the row or column with the maximum penalty and find cell that has least
cost in selected row or column. Allocate as much as possible in this cell.
If there is a tie in the values of penalties then select the cell where
maximum allocation can be possible.
• Step 4: Adjust the supply & demand and cross out (strike out) the satisfied row or
column.
• Step 5: Repeat this steps until all supply and demand values are 0.
Obtaining the optimal basic solution:
MODI Method
• Step 1: Find an initial basic feasible solution using any one of the three methods
NWCM, LCM or VAM
• Step 2: Find  and  for rows and columns. To start
a) Assign 0 to   or  where maximum number of allocation in a row or column
respectively.
b)   Calculate other  's and   's using = + , for all occupied cells.
•
• Step 3 : For all unoccupied cells, calculate  = -( + )
• Step 4 : Check the sign of
a. If  >0, then current basic feasible solution is optimal and stop this procedure.
b. If  =0 then alternative solution exists, with different set allocation and same
transportation cost. Now stop this procedure.
Obtaining the optimal basic solution:
MODI Method
If  <0, then the given solution is not an optimal solution and further improvement in the solution is
possible
Step 5 : Select the unoccupied cell with the largest negative value of  , and included in the next solution
Step 6 : Draw a closed path (or loop) from the unoccupied cell (selected in the previous step). The right
angle turn in this path is allowed only at occupied cells and at the original unoccupied cell. Mark (+)
and (-) sign alternatively at each corner, starting from the original unoccupied cell
Step 7:  
•a.   Select the minimum value from cells marked with (-) sign of the closed path.
b. Assign this value to selected unoccupied cell (So unoccupied cell becomes occupied cell).
c. Add this value to the other occupied cells marked with (+) sign.
d. Subtract this value to the other occupied cells marked with (-) sign.
Step 8:  Repeat Step-2 to step-7 until optimal solution is obtained. This procedure stops when all  ≥0 for
unoccupied cells.
Problem: Obtain the initial basic feasible solution for the
following transportation problem and optimize the solution
using Modi’s method
Destination
Supply
1 2 3 4
Source

1 3 2 7 4 300

2 2 6 5 9 400

3 8 3 3 2 500

Demand 250 350 400 200 1200


Applications of Transportation Problem

• The objective of transportation is to minimize the costs of transporting


goods and maximizing the profits of the company
• Determine low cost location
• Find minimum cost production schedule
• Military distribution system
• It is very useful in business and industry for maximization of profit, reducing
the transportation time and ensuring safe delivery of goods.
Presentation on Balanced
Transportation Problem done by
Hariharan.B (19631034)
Aravindh Raj.G(19631008)
Arun Prakash.N(19631009)
Gokulakrishnan.E(19631030)
Jayakrishna.A.R.(19631043)
Kishore.S(19631052)

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