QUANTITATIVE ANALYSIS IN MANAGEMENT
DECISIONS
Lecture 6
Transportation Model
Course leader : Dr. B Dayal
Mobile No.: 00251941962113
Email ID: [email protected]
TRANSPORTATION PROBLEM
Transportation model studies the minimisation of the cost of transporting
a commodity from a number of sources to several destinations.
FORMULATION OF TRANSPORTATION PROBLEM
Let xij be the number of units of the homogenious product to be
transported from sources i to the destination j. Then objective is to:
m n
MINIMISE Z = ∑ ∑ CiJ XiJ
i=1 j=1
SUBJECT TO
n
∑ XiJ = ai , I = 1,2,------m
J=1
m
∑ XiJ = bJ ; J = 1,2,------n
j=1
With all XiJ ≥ 0 AND INTEGERS.
TRANSPORTATION PROBLEM
THEOREM:
A necessary and sufficient condition for the existance of a
feasible solution to the transportation problem is that
m n
∑ ai = ∑ bJ
i=1 J=1
TRANSPORTATION ALGORITHM
The transportation algorithm is the simplex method
specialised to the format of table. It involves:
TRANSPORTATION PROBLEM
Finding an initial basic feasible solution.
Testing the solution for optimality.
Improving the solution, when it is not optimal.
Repeating steps 2 and 3 until the optimal solution is
obtained.
The solution to T.P is obtained in two stages:
Find basic feasible solution with following methods:-
North-west corner rule
Matrix minima method or least cost method
Vogel’s approximation method
Test the basic feasible solution for its optimality
by following method:-
Modi method
Stepping stone method.
TRANSPORTATION PROBLEM
TRANSPORTATION TABLE
D1 D2 _ Dn SUPPLY
S1 C11 C12 _ C1n a1
X11 X12 X1n
S2 C21 C22 _ C2n a2
X21 X22 X2n
S3 C31 C32 _ C3n a3
X31 X32 X3n
_ _ _ _ _ _
Sm Cm1 Cm2 _ Cmn am
Xm1 Xm2 Xmn
DEMAND b1 b2 _ bn ∑aj=∑bi
TRANSPORTATION PROBLEM
NORTH WEST CORNER RULE.
Step 1. Make first assignment in cell (1,1), The upper left
hand (north west corner) of table. The amount allotted is
X11 = Min ( a1, b1 ).
Step 2. If b1 > a1 , The capacity exhausted, but requirement
not completed. Move down vertically and asssign X21 = MIN
( a2,b1 – X21) In the cell (2,1).
If a1 > b1, The requirement completed, but capacity not
exhausted. Move to right in the row and allocate X12 = Min
(a1 – X11, b2) in the cell (1,2).
Step 3. Start from the new north west corner of the table
and repeat steps 1 and 2 till all the rim requirements are
satisfied.
SOLVED PROBLEM 1
Determine initial basic feasible solution to the
following transportation problem using the north
west corner rule.
D1 D2 D3 D4 A
V
O1 6 4 1 5 14 A
I
O2 8 9 2 7 16 L
A
O3 4 3 6 2 5 B
I
6 10 15 4 35 L
I
T
REQUIREMENTS Y
TRANSPORTATION PROBLEM
MATRIX MINIMUM METHOD.
Step 1. Alocate upto the full capacity/ requirement
of the cell having lowest cost. XiJ = MIN ( ai, bJ ).
Step 2. If XiJ = ai , Cross off the ith Row and
decrease bi by ai , Go to step 3.
If XiJ = BJ, Cross off the JTH column of the table
and decrease ai by Bj. go to step 3.
Repeat step 1 and 2 for the resulting reduced table
until all the rim requirements are satisfied.
Whenever the minimum is not unique, make an
arbitrary choice among the minimum.
SOLVED PROBLEM 2
Obtain an initial basic feasible solution to the
following transportation problem using matrix
minimum method.
D1 D2 D3 D4
CAPACITY
O1 1 2 3 4 6
O2 4 3 2 0 8
O3 0 2 2 1 10
4 6 8 6 24
DEMAND
TRANSPORTATION PROBLEM
Vogel’s approximation mehod.
Takes into account not only the least cost cij but also the cost
just above that.
Step 1. Identify the least cost and next smallest cost cells.
Get the difference between them and for each row and
column.
Step 2. Identify largest difference. Allocate the maximum
feasible amount XiJ = min (ai , Bj) In that cell. Cross off the
iTH row or Jth column.
Step 3. Recompute the column and row differences for the
reduced table and go to step 2. Repeat till all the rim
requirements are satisfied.
SOLVED PROBLEM 3
A company has three production facilities S1, S2 andS3 with production
capacity of 7, 9 and 18 units (in 100s) per week of a product
respectively. These units are to be shipped to four ware houses D1,
D2, D3 and D4 with requirement of 5, 8, 7 and 14 units (in 100s) per
week. Transportation costs (in birr) per unit between factories to ware
houses is given below. Determine the initial basic feasible solution
using vogel’s approximation method.
D1 D2 D3 D4
S1 19 30 50 10 7
S2 70 30 40 60 9
S3 40 8 70 20 18
5 8 7 14 34
TRANSPORTATION PROBLEM
IMPROVING THE SOLUTION .
CiJ – Ui - VJ. Calculated in the test for optimality. It is
made to the incoming variables. Construct a loop
consisting exclusively of this incoming variable
(cell) and current basic variables (cells). Then
allocate to the incoming cell as many units as
possible such that, after appropriate adjustments
have been made to the other cells in the loop, the
supply and demand constraints are not violated.
All allocations remain non-negative and one of the
old basic variable is reduced to 0. (Where upon it
ceases to be basic)
TRANSPORTATION PROBLEM
Modified distribution method / modi method / U – V method.
Step 1. Under this method we construct penalties for rows
and column by subtracting the least value of row / column
from the next least value.
STEP 2. Select the highest penalty constructed for both
row and column. Enter that row / column and select the
minimum cost and allocate min (ai , BJ).
Step 3. Delete the row or column or both if the rim
availability / requirements is met.
Step 4. Repeat step 1 and 2 till all allocations are over.
Step 5. For all allocations, form equation ui + VJ = CJ . Set
one of the dual variable to 0 and solve for others.
TRANSPORTATION PROBLEM
MODIFIED DISTRIBUTION METHOD / MODI
METHOD / U – V METHOD (CONTD).
STEP 6. Use these values to find ∆Ij = CiJ – Ui – VJ , If all ∆Ij ≥
0, then it is the optimal solution.
STEP 7. If any ∆Ij ≤ 0, Select the most negative cell and
form loop. Starting point of the loop is positive and
alternative corner of the loop are negative and positive.
Examine the quantities allocated at –ve places. Select the
minimum. Add it at +ve places and subtract from –ve
places.
Step 8. Form new table and repeat steps 5 to 7 till ∆Ij ≥ 0.
SOLVED PROBLEM 4
Solve the following transportation problem with cost
coefficients demands and supplies as given in the
following table.
A B C SUPPLY
I 6 8 4 14
II 4 9 8 12
III 1 2 6 5
DEMAND 6 10 15 31
UNBALANCED TP
Example 5.
A car company is faced with an allocation problem resulting
from rental agreement that allows cars to be returned to
locations other than those which they were originally
rented. At the present time there are two cars, with 15 and
13 simplex cars respectively and 4 locations requiring 9, 6,
7 and 9 cars respectively. The unit transportation cost (in
Birr) between the locations is as given below:
D1 D2 D3 D4
SI 45 17 21 30
S II 14 18 19 31
TERMINAL QUESTIONS 1
Solve the following transportation problem.
A B C D AVAILABILI
TY
I 21 16 25 13 11
II 17 18 14 23 13
III 2 27 18 41 19
REQUIREME 6 10 12 15 43
NTS
TERMINAL QUESTION 2
A company has three cement factories located in cities 1, 2, 3
which supply cement to four projects located in towns 1, 2,
3, 4. Each plant can supply daily 6, 1, 10 truck loads of
cement respectively and the daily cement requirements of
the projects are respectively 7, 5, 3, 2 truck loads. The
transportation cost per truck load of cement (in hundreds
of rupees) from each plant to each project site are as
follows. Solve the problem by using vogel’s approximation
method.
1 2 3 4
1 2 3 11 7
2 1 0 6 1
3 5 8 15 9
TERMINAL QUESTIONS 3
Solve the following transportation problem.
9 12 9 6 9 10 5
7 3 7 7 5 5
6
6 5 9 11 3 11 2
6 8 11 2 2 10
9
4 4 6 2 4 2 22
TRANSPORTATION PROBLEM
EXAMPLE 1. DETERMINE INITIAL BASIC FEASIBLE
SOLUTION TO THE FOLLOWING
TRANSPORTATION PROBLEM USING THE NORTH
WEST CORNER RULE. A
V
D1 D2 D3 D4 A
O1 6 4 1 5 14 I
L
O2 8 9 2 7 16 A
B
O3 4 3 6 2 5 I
L
6 10 15 4 35 I
T
Y
SOLVED PROBLEM 3
OBTAIN AN INITIAL BASIC FEASIBLE SOLUTION TO
THE FOLLOWING TRANSPORTATION PROBLEM
USUNG VOGEL’S APPROXIMATION METHOD.
D1 D2 D3 D4
A 5 1 3 3 34
B 3 3 5 4 15
C 6 4 4 3 12
D 4 -1 4 2 19
21 25 17 17 80
