C H A P T E R T H R E E : T R A N S P O R TAT I O N A N D A S S I G N M E N T P R O B L E M S

Introduction
It gets its name from its application to problems involving transporting products
from several origins (factories) to several destinations (markets). The two common
objectives of such problems either minimize the cost of shipping n units to m
destinations or maximize the profit of shipping n units to m destinations.
Transportation problem is an especial type of linear programming problem. Though
every linear programming problem can be solved by simplex method, there are
more than one solution methods (northwest-corner method, least cost method and
Vogel’s approximation method) of transportation problem, which are
computationally more efficient than the Simplex method.
The transportation model deals with a special class of linear programming
problem in which the objective is to transport a homogeneous commodity from
various origins or factories to different destinations or markets at a total minimum
cost. The transportation problem typically deal with a special class of linear
programming problem in which the objective is to “transport” or distribute a single
commodity from several ‘sources’ (also called origins or supplies or capacity
centers) to different ‘destinations’ (also such as demands or requirement (enters) at
a minimum total cost.
Assignment problems are special class of linear programming problems which
involve determining most efficient assignment of people to Projects, jobs to
machines, salespersons to territories, contracts to bidders, classes to rooms and so on
in one-to-one basis. The desired objective is most often to minimize total costs or
time required to perform the tasks at hand.

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One important application of linear programming has been in the area of the
physical distribution (transportation) of resources, from one place to another, to
meet a specific set of requirement. Both transportation and assignment problems are
members of a category of linear programming techniques called network flow
problems.
3.1. Transportation Problems
Transportation problem deals with the distribution of goods from several points
of supplies (sources) to a number of points of demands (destinations). Consider a
corporation engaged in the manufacture of products. Most of such big corporations
are of “multiple-product” and “multi-unit” organizations having production units
situated at different places. Items are produced for sales.
Sales take place at different markets which are, again located at different places.
It is not feasible to co-locate production and market. Markets are located away from
the manufacturing places. Hence products are sent to factory warehouses set up near
market outlets. Cost of product consists of production cost and distribution cost.

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Distribution cost consists of mainly the transportation cost of items from its
production (manufacturing) center to the warehouses. Transportation techniques
are designed to minimize the distribution costs. In order to identify products, it is
necessary to work out per unit distribution cost of each product. We also know the
production capacity of each product in each factory is not fixed. The holding
capacity of a warehouse or potential sales i n each marketing center is again a fixed
quality which cannot be exceeded.
 The characteristics of transportation problem are as follows:
🢣 A limited supply of one commodity is available at certain sources or origins.
🢣 There is a demand for the commodity at several destinations
🢣 The quantities of supply at each source and the demand at each destination are constant.
🢣 The shipping or transportation costs per unit from each source to each destination are
assumed to be constant.
🢣 No shipments are allowed between sources or between destinations. All supply
and demand quantities are given in whole number or integers.
🢣 The problem is to determine how many units shipped from each source to each
destination so that all demands are satisfied at the minimum total shipping costs.

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 Uses of transportation
🢣 Reduce distribution or transportation cost
techniques:
🢣 Improve competitiveness of product
🢣 Assist proper location of warehouses
🢣 Assist proper location of new factories or plants being planned.
🢣 Close down warehouses which are found costly and uneconomical.
🢣 The objective of transportation problem is:
 To identify the optimal shipping routes-minimum cost route
 To identify the maximum amount that can be shipped over the optimum route
 To determine the total transformation cost or the profit of transportation
Transportation problem is a particular class of linear programming,
which is associated with day-to-day activities in our real life and mainly
deals with logistics. It helps in solving problems on distribution and
transportation of resources from one place to another. The goods are
transported from a set of sources (e.g., factory) to a set of destinations (e.g.,
warehouse) to meet the specific requirements.
In other words, transportation problems deal with the transportation of a
product manufactured at different plants (supply origins) to a number of
different warehouses (demand destinations).
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The objective is to satisfy the demand at destinations from the supply constraints at the
minimum transportation cost possible. To achieve this objective, we must know the quantity
of available supplies and the quantities demanded. In addition, we must also know the
location, to find the cost of transporting one unit of commodity from the place of origin to
the destination.
The model is useful for making strategic decisions involved in selecting optimum
transportation routes so as to allocate the production of various plants to several warehouses
or distribution centers. The transportation model can also be used in making location
decisions. The model helps in locating a new facility, a manufacturing plant or an office
when two or more number of locations is under consideration. The total transportation
cost, distribution cost or shipping cost and production costs are to be minimized by applying
the model.
3.2. The Transportation Method
The solution algorithm to a transportation problem may be summarized into the
following steps:
Step 1: Formulate the problem and set up in the matrix form. The formulation of
the problem is similar to the linear programming. Here the objective function is the
total transportation cost and the constraints are the supply and demand available at
each source and destination respectively.
Step 2: Obtain an initial basic feasible solution. There are 3 methods to find the
initial feasible solution.
 North-West Corner Method (NWCM)
 Least Cost Method (LCM)
 Vogel’s Approximation Method (VAM)

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The initial solution obtained by any of the three methods must satisfy the
following condition:
The solution must be feasible i.e.: It must satisfy all the supply and demand
constraints
The number of positive allocations must equal to m+n-1, where m=the number of rows
(or origins or supply centers) and n= the number of columns(or destination centers or
demand centers). Example: m=3 origins and n=4 destinations ==>m+n- 1=3+4 -
1=6 (i.e. the transportation model should have 6 occupied cells).
Note: The number of occupied cells < m+n-1==> degenerate solution
Step 3: Test the initial solution for optimality. If the current solution is
optimal, then stop. Otherwise, determine the new improved solution.
Step 4: Repeat step 3 until an optimal solution is reached
3.2. 1. Linear programming formulation of the transportation problem
Example: Suppose that a firm has three factories /sources of supply/ & four
warehouses /point of demand/. The firm's production capacity at the three factories,
the demand for the four distribution centers located at various regions & the cost
of shipping each unit from the factories to the warehouses through each route is
given as follows:

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Using all the above information
I. Express the above transportation problem as an LPP
Solution: Let xij =The amount of commodity to be transported form source i (i =1,2,3
) to destination j (j=1,2,3,4). Then the objective function of the problem
(minimization of the total transportation cost) can be formulated as:
The structure of transportation problem involves a large number of shipping routes from
several supply origins to several demand destinations. The places where goods originate from
(like plants, warehouses etc.) are called the sources or the origins and places where they
are to be shipped to are called the destinations.
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In the above LPP, there are m x n = 3x4 =12 decision variables & m + n = 3+ 4 =7
constraints. Thus, if this problem is solved by the Simplex method, then it may
take considerable computational time.
II. The network representation of the transportation LPP is called Net work
flow
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This TP has 12 shipping routes. The objective is to identify the minimum cost
route (Least cost route).
3.2.2. Methods of Finding
Initial Feasible Solution
There are several methods available to obtain an initial feasible solution. Here we
shall discuss only three different methods to obtain the initial feasible solution:

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 A. NORTH- WEST CORNER METHOD (NWCM)
This method does not take into account the cost of transportation on any route of
transportation. The NWCM gets its name because the starting point for
the allocation process is the Upper Left-hand (Northwest) corner of the transportation
table. Therefore, allocate to the Northwest corner as many units as possible.
This method advocates that allocation should be made on the basis of
geographical location of the cells in the tableau. In particular, the method attaches
greater importance to the cell situated at the upper left hand corner of the tableau
and makes as much as possible an allocation to the cell with both the supply
restriction and demand constraint taking into consideration.
Its chief advantages are that it is simple to use and easy to understand. Its chief
drawback is that it does not take transportation costs into account. Consequently,
such a solution may require much additional effort to obtain the optimal solution.
Northwest corner rule
The following set of principles guides the allocation:
1. Begin with the upper left hand cell (Left, upper most i n the table), & allocate as
many
units as possible to that cell. This will be the smaller amount of either the row supply or the
column demand. Adjust the row & column quantities to reflect the allocation.
2. Subtract from the row supply & from the column demand the amount allocated.
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3.If the column demand is now zero, move to the cell next to the right, if the row supply is
zero, move down to the cell in the next row. If both are zero, move first to the next cell on the
right then down one cell.
4.Once a cell is identified as per step (3), it becomes a northwest cell. Allocate to it an
amount as per step (1)
5. Repeat, the above steps (1) - (4) until all the remaining supply and demand is gone.

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a. Develop an initial feasible solution using the NWCM
b. Compute the total cost for this solution.

Check that the solution is feasible or not: m + n-1; m=3 and n=4, 3+ 4-1= 6 cells
occupied (Feasible solution). The total transportation cost of the initial feasible
solution derived by the NWCM is:

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Example 2 :Consider the following transportation
problem:

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Required:
a. Develop an initial feasible solution using NWCM & Compute the total cost
b. Develop an initial feasible solution using least-cost method & compute the total
cost.
Solution: a. Initial feasible solution using NWCM

m= 3, n =4 ==> 3+4 -1 =6 occupied

cells (Feasible)

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Generally, NWC is the quickest and simplest method for determining an initial solution
to a transportation problem. But it is an inefficient method since the solution is usually far
from the optimal. This happens because this method do not use any cost information in
arriving at the initial solution. And thus, it needs considerable work in determining the
optimal solution if one starts from the initial solution obtained by this method.
Note:
 Total Supply= Total demand ===> Balanced TP
 Total Supply ≠ total demand ===> Unbalanced TP
Convert the unbalanced TP into a balanced TP by using
dummy destination/dummy source.
If total Supply > Total demand, then create a fictitious or artificial destination
called dummy destination i.e.: total Supply > Total demand===> Add dummy column
 Excess demand < demand) ===>Add a dummy source/Add a
(Supply
dummy row
Note: the cost of “shipments” to the dummy is usually set at zero ==> No real
cost

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Example 1: Develop an initial feasible solution using
NWCM
Table: Unbalanced transportation table

Answer: X11 =80, X12 =20, X22 =100, X23 =10, X 33=50 Total cost =$270
B. The Least- Cost Method (LCM) or (Largest- Profit) Method
LCM is the method used a minimum cost in the allocation. It begins a solution by
sequentially assigning to the ratios or cells with the minimum cost as many units as
possible. The first allocation be made to the cell with the lowest cost (the highest
profit in a maximization case). The Least- Cost Method yields not only an initial
feasible solution but also one that is close to optimal in small problems.

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This method advocates that allocation should be based on minimum cost of
transportation rule / criterion. It says that the first allocation must be made to the
cell with the most minimum cost of transportation per unit. In other words, we
look at the scheduled of the transport cell and identify the most minimum. After
identifying the cell with the least transportation cost, we next make maximum
allocation to the cell without violating both supply and demand restriction.
The least cost method is also known as matrix minimum method in the sense we
look for the row and the column corresponding to which Cij is minimum. This
method finds a better initial basic feasible solution by concentrating on the cheapest
routes. Instead of starting the allocation with the northwest cell as in the North
West Corner Method, we start by allocating as much as possible to the cell with the
smallest unit cost.
If there are two or more minimum costs( tie occur) then we should select
the row or the column that can allow the maximum unit allocation. If a
further tie happen, and if they appear in the same row we should select the
lower numbered column( left side cost) and if they appear in the same column
we should select the lower numbered row( upper side cost). We then cross
out the satisfied row or column, and adjust the amounts of capacity and
requirement accordingly.
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Example1: Suppose that a firm has three factories / sources of supply /& four
warehouses/point of demand/ .The firm's production capacity at the three factories, the
demand for the four destination centers located at various regions & the cost of shipping each
unit from the factories to the warehouses through each route is given as follows:

a) Develop an initial feasible solution using least-cost method & compute the total
cost.

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m= 3, n=4 ==> 3+4-1 =6 occupied calls (Feasible)
Least- Cost method is better than the NWCM because it considers
cost factories.

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Solution: The 1st allocation is made to the cell with the least-cost. Cells AD & CD
both have the lowest cost of $1. Cell AD is selected 1st because more units can be
allocated to it (70) than to cell CE (50). Cell BF and CF both have lost cots of $2 a
larger quantity 70 can be placed there. Then, the remaining requirement of 30 for
column F is allocated to cell BF & source B's supply is reduced to 30.

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m=3, n=4 ==> 3+4-1 = 6 occupied cells (feasible)
C. Vogel's Approximation Method (VAM) or Penalty Method
 In his consideration, Vogel felt that rather than basing allocation on least cost
alone; the penalty or opportunity cost one we pay by taking a wrong decision would
have been an additional criterion for allocation. Hence, he felt a combination of
least cost and opportunity cost would be better for allocation purpose and thus, he
introduce the idea of row and column penalties or opportunity cost.
The row or column penalty cost is computed by identifying the two least cost in
each row and each column and then find the difference. Whatever result obtained
is taking as penalty for that row or column. If two costs in a row or column are
tied for the rank of least cost, the penalty is zero.
VAM is preferred to the other two methods described above. In this method each
allocation is made on the basis of the opportunity (or penalty or extra) cost that
would have incurred if allocation in certain cells with minimum unit transportation
cost were missed.
In this method allocation are made so that the penalty cost is minimized. The
advantage of this method is that it gives an initial solution which is nearer to an
optimal solution or is the optimal solution itself.

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VAM is preferred to the other two methods described above. In this method each
allocation is made on the basis of the opportunity (or penalty or extra) cost that would
have incurred if allocation i n certain cells with minimum unit transportation cost were missed.
In this method allocation are made so that the penalty cost is minimized. The advantage of
this method is that it gives an initial solution which is nearer to an optimal solution or is
the optimal solution itself. VAM determines the penalty for not using the minimum cost
routes, where the objective is to avoid large penalties so that the penalty from not using
the routes is minimized.
VAM is an efficient method for obtaining an initial solution. In other words, it gives
better initial solution (less transportation cost) than the NWC and LCM. But it involves
more computational effort than the NWC since it recognizes the costs involved. It normally
provides a solution which is optimal or very close to optimal
The steps in VAM are as follows:
Step 1: For each row, compute the difference between the lowest cost element and the
next lowest-cost element of the row. Repeat this for each column. The difference between
the lowest-cost and the next lowest cost for a given row or column is said to be the Penalty
number for that row or column.
Step 2: - Select the row or column having the largest penalty number. If there is a tie it
can be broken by selecting the least cost cell among these two or
more rows and columns. If a further tie happen select the cell
where maximum allocation can be made.
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If a further tie happen again, and if they(least costs) appear in the same
row we should select the lower numbered column( extreme left side cost)
and if they appear in the same column we should select the lower numbered
row( uppermost or topmost side cost).
Step 3: Assign (allocate) the maximum number of units to the lowest-cost cell in the
corresponding row or column selected in Step 2. And then eliminate a row or column whose
supply availability or requirement is satisfied.
Step 4: Repeat step 1 to 3 until a complete initial solution is obtained
Step 5: Check to be sure that all rim conditions are satisfied and that m + n -
1 cells are allocated. Example: Determine an initial basic feasible solution to the
following transportation problem using VAM.

From/To A B C D Supply

F1 2 2 0 4 25

F2 5 9 8 3 25

F3 6 4 3 2 10

Demand 20 15 20 5 60/60

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Solution:

m= 3, n=4 ==> 3+4-1 =6 Occupied cells (feasible)

The transportation cost associated with this solution
is: Total cost= 5x2 + 20x0+15x5x9 =+95x3+10x4=
$185
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2. A dairy firm has three plants located in different regions. The daily
milk production at each plant is as follows:
Plant 1: 6 million liters, Plant 2: 1 million liters, & Plant 3: 10 million liters
Each day the firm must fulfill the needs of its four distribution centers.
Minimum requirement at each center is as follows.
Distribution center 1: 7 million liters, Distribution center 2: 5 million liters ,
Distribution
center 3: 3 million liters , Distribution center 4: 2 million liters
Cost of shipping one million liters form each plant to each distribution
center is given in the following table in hundreds of dollar.

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Find the initial basic feasible solution
by: a. North-west corners method
b. LC M
c. VAM if the object is to minimize the total transportation
cost
Answer:
d. Total cost = $11, 600
e. Total cost= $11,200

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 m+n -1 = 3+4-1 =6 ==>the solution is non-degenerate.
The total transportation cost=$(1x2+5x3+1x1+6x5+3x15+1x9) x100
= $ 10,200
Exercise 1: Determine an initial basic feasible solution to the following
transportation problem by VAM

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2. Determine an initial feasible solution to the following transportation
problem using a. NWCM b. LCM, & c. VAM.

3. XYZ Store, Dessie is interested to purchase the following type and

quantities of
dresses

Four different dress makers are submitted the tenders, who undertake
to supply not more than the quantities indicated below:

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The Store Manager estimates that the cost per dress(Birr in1000 ) will
vary according to the dress maker as indicates in the following table:

Determine how many orders of each dress type should be ordered from
the dress makers so as to minimize the total order cost using
a. NWCM b. LCM, & c. VAM.

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 Maximization and the Transportation Techniques
Although, transportation problems are usually minimizing problems, on occasions,
problems are framed so that the objective is to make the allocations from sources to
destinations in a manner which maximizes contribution or profit. These problems
are dealt with relatively easily as follows.
Initial Allocation
a) North-west Corner Method
The procedure is exactly the same as that of minimization problem, because
allocation is based on geographical location.
b) Least Cost First Method
For a maximization problem, this method will now be known as the greatest
profit/contribution first method. The initial feasible allocation is made on basis of
maximum profit/contribution first, then next highest and so on.
c) Vogel’s Approximation
 For a maximization problem, the penalty is the difference between the
two
greatest profit/contribution in rows/columns. Then select the largest penalty and
allocate to the cell with the greatest profit/contribution per unit of the row/column
with the largest penalty selected.
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Example: A company has three factories located in three cities viz. X, Y,
Z. These factories supplies consignments to four dealers viz. A, B, C and
D. The dealers are spread all over the country. The production capacity of
these factories, the demand of each dealers and the net return per unit
product is given in the following table.
Dealer Supply
From /to A B C D

Factory X 6 6 6 4 10,000
Y 4 2 4 5 8000
Y 5 6 7 8 9000
Demand 9000 8000 6000 4000 27000

Find the initial basic feasible solution by:

a. North-west corners method (NWCM)
b. Largest profit method (LPM)
c. V A M

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Solution: a) Using NWCM
Dealer
From/To A B C D Supply
Factory
X 6 6 6 4 10000
9000 1000
Y 4 2 4 5 8000
7000 1000
Z 5 6 7 8 9000
5000 4000
Demand 9000 8000 6000 4000 27, 000

 m+n-1= 3+4-1 =6 feasible

Total profit = 6*9000+ 6*1000+ 2*7000 + 4*1000 + 7* 5000
+ 8*4000= 145,000 birr

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b) Largest profit method (LPM)
Dealer Supply
From/To A B C D
Factory X 6 6 6 4 10000
9000 1000
Y 4 2 4 5 8000
7000 1000
Z 5 6 7 8 9000
5000 4000
Demand 9000 8000 6000 4000 27000

 m+n-1= 3+4-1 =6 feasible

Total profit = 6*9000+ 6*1000+ 2*7000 + 4*1000 + 7* 5000 +
8*4000= 145,000 birr

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c) V A M
Dealer
From/To A B C D Supply
Factory
X 6 6 6 4 10000
2000 8000
Y 4 2 4 5 8000
7000 1000
Z 5 6 7 8 9000
5000 4000
Demand 9000 8000 6000 4000 27000

 m+n-1= 3+4-1 =6 feasible

Total profit = 6*2000+ 6*8000+ 4*7000 + 4*1000 + 7* 5000 +
8*4000= 159,000 birr

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Exercise: Three garment plants are available for monthly production of four styles of
men's shirts. The capacities of the three plants are 45,000, 93,000 and 60,000 shirts.
The number of shirts required in style "a" through "d" is 28,000, 65,000, 35,000 &
70,000, respectively. The profits, in $ per shirt, at each plant for each style are shown
below. The table below shows the garments plants profit per unit
Style a b c d
Plant

1 8 12 -2 6
2 13 4 3 10
3 0 7 11 8

Determine How many shirts of each type to produce in each plant so that profit is
maximized using:
a) NWCM
b) LPM
c) VAM
d) Which method(s) generates the largest profit ?
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 3.3. O P T I M A L I T Y T E S T S
Once an initial solution is available, the next step is to check its optimality. An optimal
solution is one in which there is no opportunity cost. That is, there is no other set of
transportation routes (allocations) that will reduce the total opportunity cost. Thus we have
to evaluate each unoccupied cell (represents unused route) in the transportation table in terms
of opportunity cost.
The purpose of the optimality test is to see if the proposed solution just generated can
be improved or not. The solution to be checked for optimality must be non-degenerate i.e. the
No of occupied cells must be m + n-1.
The Procedure for testing optimality is analogous to that of the Simplex method. A
distinction is made between basic variables, those associated with occupied cells & non-basic
variables, those associated with the empty cells.
For each empty cell, the effect of changing it to an occupied cell is examined. If any of
these changes are favorable, the solution is not optimal & a new solution must be designed. A
favorable change means an increase in the value of the objective function in maximization
problems or a decrease in minimization problems.
Optimum solution to a TP can be obtained by using the following two methods.
These methods are much simpler compared to simplex method of an LPP.
A. Stepping stone Method
B. Modified Distribution method (MODI Method)

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 A. Stepping-stone
The Stepping-stone methodmethod
is an iterative technique for moving from an initial feasible
solution to an optimal solution in transportation problems. For the stepping stone method to
be applied to a transportation problem, one rule about the no of shipping routes being used
must be observed. The rule is:
“The No of occupied routes (or squares) must always be equal to one less than the sum of
the no of rows plus the no of columns." i.e. Occupied shipping routes (squares) = No of
rows
+ No of columns – 1= Non degenerate solution.
Rules for drawing each closed loop:
1. Select an unused square (cell) to be evaluated.
2.Beginning at this cell, trace a closed loop going clockwise or anti clockwise draw an arrow
to an occupied cell in the same row (or column).
3.Move vertically or horizontally (but never diagonally) to another occupied cell “stepping
over” unoccupied or occupied cells (if necessary) without changing them. Follow the same
procedure to other occupied cells until returning to the original empty cell.
4.Begin with a plus (+) sign at the unused cell, place alternative (-) signs and plus signs on
each corner square of the closed path just traced. i.e. At each turn of the loop ( the loop
may cross over itself at times), plus and minus signs are alternately placed in the cells,
starting with a + sign in an empty cell.
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5. There must be exactly one cell with a + sign and exactly one cell with a - sign in any
row or column in which the loop turns.
6.An even number of at least four cells must participate in a loop and the occupied cells can
be visited once and only once.
7.Repeat steps 1 to 4 until an improvement index has been calculated for all unused squares
(cells). If all indices computed are greater than or equal to zero, an optimal solution has
been reached. If not, it is possible to improve the current solution and decrease total
shipping costs.
Note: In a non-degenerate problem, there is only one possible way of drawing the loop for
each empty cell.
How to find the value of a cell evaluator
The value of a cell evaluator is the sum of the per unit shipping costs in the
gaining cells less the sum of the per unit shipping costs in the losing cells of the
closed loop. This evaluation process must be extended to all unoccupied cells.
The test of optimality for a minimization (cost) problem:
 If one or more of the cell evaluators is negative, the existing solution is not optimal.
i.e. for minimization (cost) problems, all the cell evaluators must be
positive and /or zero for optimality.
For Maximization problem, the cell evaluators must be negative and/or
zero for optimality test.
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 Analysis of
Check all the empty cells and test:
select for improvement the one with the largest
improvement potential. If the solution is not optimal, the next step in the
transportation method is to find a better solution. The operations in this step are:
a. Identify the “incoming" cell (the empty cell to be occupied). In a
minimization case, the incoming cell is located by identifying the most negative cell
evaluator. If there is tie, select one that allows maximum reallocation unit.
b. Design an improved solution: by shifting/reallocating units from cell to cell
2. The test of optimality for a maximization (profit) case is the reversed of minimization
case. If one or more of the cell evaluators is positive, the existing solution is not
optimal. i.e.: for a maximization (profit) case, all the cell evaluators must be negative
or zero for optimality. If any cell evaluation is positive, the solution is not optimal.
Note:
A cell evaluator of 0 indicates the existence of another solution just as good as the
current solution( alternative solution). Thus, in the final solution, if cell evaluators
of 0 exist, this indicates the existence of multiple optimal solutions.
If two or more cells have the same value, select one that allows maximum
reallocation unit.

10/18/2024 OR LECTURE SLIDE 39

If two or more of the "losing" cells contain the same no of units, both will
become empty simultaneously and a “degenerate" solution will result.
For the minimization case; when one or more cell evaluators are negatives, the
cell with the largest negative should be brought into solution because that route has
the largest potential for improvement per unit.
The loop starts and ends at the selected unoccupied cell. Every corner element of
the loop must be an occupied cell.
Example 1: Use NWCM to find initial feasible solution and test the solution for
optimality.

10/18/2024 OR LECTURE SLIDE 40

Solution Initial feasible
solution
/

 m=3, n=3==> 3+3-1=5(Non-degenerate solution)

Total transportation cost = $[50x4+50x2+100x1+100x9+200x3] = $1900

10/18/2024 OR LECTURE SLIDE 41

The negative value for cell (F1, C ) indicates an improved solution is possible. For each
unit we can shift into that cell, the total cost will decrease by $2. The next question is how
many units can be reallocated into that cell while retaining the balance of supply and demand
for that table?
The Stepping- stone path for cell (F1, C ) is:
The + Signs in the path indicate units to be added, the - signs indicate units to be
subtracted. The limit on subtraction(reallocation unit) is the smallest quantity in a
negative position along the cell path. There are two quantities in negative positions, 50
and 100. Because 50 is the smaller quantity, that amount will be shifted in the following
manner: Subtract 50 units from each cell on the path with a - sign and add 50 units to the
quantity of each cell with a + sign in it.

10/18/2024 OR LECTURE SLIDE 42

With each iteration (new solution), it is necessary to evaluate the empty cells to see if
further improvements is possible. The distribution plan after reallocation of 50 units is:

Because none of these Cell evaluators is negative, this is an optimal solution. Therefore,
the total cost for the distribution plan is:
The total transportation cost = $ (50x4 +50x8 150x1+50x9 +200x3) = $1,800
10/18/2024 OR LECTURE SLIDE 43
2. Consider the following TP and i) find basic initial feasible solution by applying
North West Corner rule ii) test the optimality of the solution by using stepping stone
method. Warehouse D E F G Supply
Factory
A 42 48 38 37 16,000
B 40 49 52 51 15,000
C 39 38 40 43 19,000
Demand 8,000 9,000 11,000 22,000 50,000

Solution: Finding initial feasible solution using

NWCM Warehouse D E F G Supply
Factory
A 42 48 38 37 16,000
8,000 8,000
B 40 49 52 51 15,000
1000 11,000 3,0000
C 39 38 40 43 19,0000
19,000
Demand 8,000 9,000 11,000 22,000 50,0000
10/18/2024 OR LECTURE SLIDE 44
 The total transportation cost = 42*8000 +48*8000 +49*1000 +
52*11000
+ 51*3000 +43*19000 = Birr 2,311, 000.
ii) test the optimality of the solution by using stepping stone method.
UnA,F
occupied cells= 38 – 52 + 49 - 48
Cell Evaluators for
= -13(Selected
A,G improvement)
B,D = 37 -51 + 49 - 48 = -13
B,C = 40 – 49 + 48 - 42 = - 3
C,E = 39 – 42 + 48 – 49 + 51 - 43 = 4
C,F = 38 – 43 + 51 - 49 = -3
= 40 - 52 + 51 - 43 = -4
As you see the above cell evaluators result, there are two largest(most)negative values
competing for improvement of solution, in such situation we going to select the one that allows
the greatest reallocation units in the selected loop path. So, in the above case the cell evaluator
A,F allows reallocation of 8000 units whereas cell evaluator A,G can allow 3000 units
which less than 8000.

10/18/2024 OR LECTURE SLIDE 45

 The first improved solution
table
From To D E F G Supply
A 42 48 38 37 16,000
8,000 8,000
B 40 49 52 51 15,000
9,000 3,000 3,000
C 39 38 40 43 19,000
19,000
Demand 8,000 9,000 11,000 22,000 50,000

 Total improved cost= 2,311,000 -13*8000 =2,207,000

Un occupied cells Cell Evaluators
A, E = 48 – 38 + 52 - 49 =
A, G 13
= 37 – 51 + 52 - 38 = 0
B, D = 40 – 42 + 38 - 52 = -16( Selected for improvement)
C, D = 39 – 42 + 38 – 52 + 51 - 43 = -9
C, E = 38 – 49 + 51 - 43 = - 3
C, F = 40 – 52 + 52 - 43 = - 4
The reallocation quantity for the closed loop path is 3000 unit(the
smallest negative quantity in the path.
10/18/2024 OR LECTURE SLIDE 46
The Second improved solution
table To D E F G Supply
From
A 42 48 38 37 16,000
5,000 11,000
B 40 49 52 51 15,000
3,000 9,000 3,000
C 39 38 40 43 19,000
reallocated
19,000 unit
Demand 8000 9000 11000 22000 50,000

Improved cost= 2,207,000- 16*3000 = 2,159,000.

Un occupied cells Cell Evaluators
A, E = 48 – 49 + 40 – 42 = - 3
A, G = 37- 51 + 40 - 42 = -16( greatest improvement
potential)
B, F = 52 - 40 + 42 – 38 = 16
C, D = 39- 40 + 51 - 43 = 7
C, E = 38- 49 + 51 - 43 = -3
C, F = 40- 43 + 51 – 40 + 42 – 38= 12
10/18/2024 OR LECTURE SLIDE 47
The third improved solution
table To D E F G Supply
From
A 42 48 38 37 16,000
2,000 11,000 3,000
B 40 49 52 51 15,000
6,000 9,000
C 39 38 40 43 19,000
19,000
Demand 8,000 9,000 11,000 22,000 50,000

Improved cost= 2,159,000 -16*3000 =

2,111,000
Un occupied cells Cell Evaluators
A, E = 48 – 49 + 40 – 42 = -3
B, F = 52 – 40 +42 – 38 = 16
B, G = 51 – 40 + 42 – 37 = 16
C, D = 39 – 42 + 37 – 43 = -9
C, E = 38- 49 + 40 – 42 + 37 – 43 = -19 ( largest improvement)
C, F = 40 – 38 + 37 – 43 = - 4
 Reallocation of 2,000 units
10/18/2024 OR LECTURE SLIDE 48
The fourth improved solution
table To D E F G Supply
From
A 42 48 38 37 16,000
11, 00 5,000
B 40 49 52 51 15,000
8,000 7,000
C 39 38 40 43 19,000
2,000 17,000
Demand 8,000 9,000 11,000 22,000 50,000
Improved cost = 2,111,000 – 19*2000
=2,073,000
Un occupied cells Cell Evaluators
A, D = 42 -37 + 43 -38 + 49 – 40 = 19
A, E = 48- 37 + 43 – 38 = 16
B, F = 52 – 38 +37 – 43 + 38 – 49 = -3
B, G = 51 – 43 + 38 – 49 = -3
C, D = 39 - 40 + 49 – 38 = 10
C, F = 40 – 38 + 37 – 43 = - 4 (largest
improvement)
Reallocation unit of 11,000
units
10/18/2024 OR LECTURE SLIDE 49
The fiveth improved solution
table To D E F G Supply
From
A 42 48 38 37 16,000
16,000
B 40 49 52 51 15,000
8,000 7,0 0
C 39 38 40 43 19,000
2,000 11,000 6,000

Demand 8,000 9,000 11,000 22,000 50,000

Improved cost = 2,073,000 – 4*11,000 =

2,029,000
Un occupied cells Cell Evaluators
A, D = 42 – 37 +43 - 38 + 49 – 40 = 19
A, E = 48- 37 + 43 – 38 = 16
A, F = 38 – 37 + 43 – 40 = 4
B, F = 52 – 40 + 38 – 49 = 1
B, G = 51 – 43 + 38 – 49 = -3 ( largest improvement potential)
C, D = 39 – 40 + 49 – 38 = 10
Reallocation of 6,000 units
10/18/2024 OR LECTURE SLIDE 50
The sixth improved solution
table To D E F G Supply
From
A 42 48 38 37 16,000
16,000
B 40 49 52 51 15,000
8,000 1,000 6,000
C 39 38 40 43 19,000
8,000 11,000
Demand 8,000 9,000 11,000 22,000 50,000
 Improved cost = 2,029,000 -3*6,000 = 2,011,000
Un occupied cells Cell Evaluators
A, D = 42- 37 + 51 – 40 = 16
A, E = 48 – 37 + 51 – 49 = 13
A, F = 38 -37 + 51 - 49 + 38 - 40 = 1 The solution is optimal
B, F = 52 – 40 + 38 – 49 = 1 because all cell evaluators
C, D = 39 – 40 + 49 – 38 = 10 are positive.
C, G = 43 – 51 + 49 – 38 = 3

10/18/2024 OR LECTURE SLIDE 51

Exercise 1: Consider the following transportation
problem.

a)Develop an initial feasible solution using the NWCM. And compute the total cost for
this solution.
b) Evaluate the solution using the stepping-stone method. Is the solution optimal? Explain.
c) What is the total cost for the optimal solution?
Q2: Consider the following transportation problem solve it by LCM and test its
optimality using stepping stone method.

10/18/2024 OR LECTURE SLIDE 52

Q3. A given local NGO is about to provide a free elementary education in Dessie town
for the children whose families could not afford to send them to private schools. This free
elementary education is provided at four schools located at Tekuam, Arada, Buanbuawuha
and Segnogebeya. Children’s home place is geographically segmented in to five districts as
East, West, Down town, North and South and they have to travel to these schools using bus.
While the intake capacity of each school is equally 400 students, the number of children in
need of elementary education in each of the five districts are:

Weekly bus travel cost per student from each of the five districts to each of the four schools
is provided in the table below:

10/18/2024 OR LECTURE SLIDE 53

These local NGO wants to provide the elementary education for all children in the five
districts while minimizing the total weekly bus transport cost. Based on the information given
above, answer the following questions showing all the calculation. Determine the initial
allocation of students from each of the five districts to each of the four schools using
a) North west corner method
b) Least cost method
c) Vogel’s approximation method
d) Test the optimality of the initial feasible solution obtained by NWCM using
stepping stone method.
Q4. Solve the following transportation problem, using LCM and VAM. Test the solution
obtained by LCM using stepping stone method.
To A B C D E Supply
From
P1 100 300 200 400 500 220,000
P2 400 100 200 300 500 100,000
P3 500 400 100 300 200 65,000
P4 200 500 500 600 600 40,000
Demand 190,000 80,000 55,000 60,000 40,000 425, 000

10/18/2024 OR LECTURE SLIDE 54

B. Modified Distribution Method (MODI
Method)
It is another logarithm for finding the optimal solution to a transportation
problem. The MODI method allows us to compute improvement index quickly for
each unused cell without drawing all of the closed paths. Because of this, it can often
provide considerable time savings over the stepping-stone method for solving
transportation problems.
MODI provides a new means of finding the unused route with the largest
negative improvement index. Once the largest index is identified, we are required to
trace only one closed path. Just as with the stepping-stone approach, this path helps
to determine the maximum No of units that can be shipped via the best
route. unused
Steps in the MODI Method
The steps to evaluate unoccupied calls are as follows:
1. For an initial basic feasible solution, calculate Ui and Vj for rows and columns
and set

To determine Cij, use the occupied

cells.
10/18/2024 OR LECTURE SLIDE 55
2. For unoccupied cells, calculate opportunity cost by using the
relation:

3. Examine the sign of each Kij

For minimization case:
i. If Kij > 0, then current basic feasible solution is optimal.
ii.If Kij = 0, then the current basic feasible solution will remain be unaffected but an
alternative solution exists.
iii.If one or more Kij < 0, then an improved solution be obtained entering unoccupied cell
(i, j), in the basis. An unoccupied cell having the largest negative value of Kij is chosen
for
entering into the solution mi x (new transportation schedule)
For maximization case
 If Kij < 0, then current basic feasible solution is optimal
4. Solve the problem as you did using the stepping-stone method. i.e. construct a closed
path
(or loop) for the unoccupied cell with largest negative opportunity cost. Start the close path
with the selected unoccupied cell and mark a plus sign (+) and in this cell, trace a path along
the rows (or columns) to an occupied cell, mark the corner with minus sign (-) and continue
down the column (or row) to an occupied cell and mark the corner with plus sign (+) and
10/18/2024 OR LECTURE SLIDE 56
Locate the smallest quantity allocated to a cell marked with a minus sign.
Allocate this value to the selected unoccupied cell and add it to other occupied cells
marked with plus signs and subtract it from the occupied cells marked with minus
signs.
5.Obtain a new improved solution by allocating units to the unoccupied call and
calculate the new transportation cost.
6. Test the revised solution for optimality.
Note:
The stepping- stone method is efficient for small sized transportation problems. For
larger problems, however, the MODI method is recommended. Both the MODI and
the stepping - stone method will yields the same values.
Example 1: Obtain an optimal solution to the transportation problem by MODI
method given below:

10/18/2024 OR LECTURE SLIDE 57

Solution:
Remark: Conventionally, we begin by assigning a value of zero as the index for row 1
(U1=0). Once row index has been established, it will enable us to compute column
index numbers for all occupied cells in that row. Similarly, once a column index
number has been determined, index numbers for all rows corresponding to occupied
cells in that column can be determined. Consider the initial feasible solution of the
given example by NWCM as shown below:

10/18/2024 OR LECTURE SLIDE 58

To determine Cij, use the occupied
cells.
For instance, C 11 =4, C12 =2, C 22 =1, C 23 =9, and C33=3
Cell cost, Cij= Ui + Vj
C11 = U1 +V1 🢣 4= 0 +V1 🢣 V1 =4 - 0 =4, (U1=0 by
convention) C12 = U1 +V2 🢣 2 =0 +V2 🢣 V2 = 2- 0 =2
C22 = U2 + V2 🢣 1= U2 +2 🢣 U2= 1-2 =-1
C23 =U2 + V3 🢣 9 = -1+ V3 🢣 V3= 9+1 =10
C33 = U3 +V3 🢣 3= U3 + 10 🢣 U3 =3-10 =-7
For unoccupied cells, calculate opportunity cost by using the
relation

10/18/2024 OR LECTURE SLIDE 59

In this case, we found hat cell (1, 3) had an evaluation of -2, which
represented an improvement potential of and $ 2 per unit. Hence, an
improved solution is possible. The stepping-stone path for call (1, 3) is:

The distribution plan after reallocation of 50 units

is:
10/18/2024 OR LECTURE SLIDE 60
 The solution after improvement:

Cell cost for occupied cells, Cij = Ui + Vj

C11 = U1 +V1 🢣4 = 0 +V1, V1= 4
C13 = U1 +V3 🢣 8= 0
+V3, V3= 8 C22= U2 + V2 🢣 1=
1 + V2, V2= 0 C23 = U2 + V3 🢣 9=
U2 + 8, U2=1 C33 = U3 + V3 🢣 3 =
U3 + 8, U3= -5
10/18/2024 OR LECTURE SLIDE 61
 Cell evaluation for unoccupied cell, Kij =Cij- (Ui +Vj)
Unoccupied cell Opportunity
cost C12 = 2 – ( 0 + 0) =
C21 2 = 5 – (1 + 4) = 0
C31 = 7- (- 5 + 4) = 8
C33 = 6 - (-5 + 0) = 11
Because none of the cell evaluators is negative, this is an optimal solution.
Total transportation cost = 50*4+50*8+50*9+150*1+200*3 = 1800
Thus, the total cost for the distribution plan = $1800
Example: A manufacturer of jeans is interested in developing an advertising
campaign that will reach four different age groups. Advertising campaigns can be
conducted through TV, radio and magazines. The following table gives the
estimated profit(in hundred) Birr per exposure for each age group according to the
medium employed. In addition, maximum exposure levels possible in each of the
media, namely TV, radio and magazines are 40, 30 and 20 millions, respectively.
Also the minimum desired exposure within each age group, namely 13–18, 19–25,
26–35, 36 and older are 35, 25, 20 and 10 millions. The objective is to maximize
the profit of attaining the maximum exposure level in each age group.

10/18/2024 OR LECTURE SLIDE 62

 Age group
Media 13 - 18 19 - 25 26 - 35 36 and above

TV 12 7 10 10
Radio 10 9 12 10
Magazine 14 12 9 12
(a) Formulate the above as a transportation problem, and find the initial feasible
solution using LPM.
(b) Test the optimality of the solution obtained above using MODI
method.
Solution: V1=12 V2=7 V3= 10 V4=10
Age group Exposu
Media 13-18 19-25 26- re
U1=0 35  level
TV 12 15 40
36
million
Radio 30
U2=2 7 15 10
million
Magazine 10 10
12 20
U3 =2
million
Desire 10
35 9 10
25 12 20
20 10
10 95 million
d millio
14 20 millio
12 millio
9 millio
exposu n n n n
10/18/2024 re OR LECTURE SLIDE 63
 Total
profit=1,200*15,000,000+7,00*15,000,000+1,000*10,000,000+9,00 10,000,00
*
+1200*20,000,000 +1400*20,000,000 = 99,500,000,000.
Occupied cell test:Cell cost (Cij =Ui +Vj)
Optimality
C11 = U1 + V1 🢣 12 = 0 + V1, V1=12
C12 = U1 + V2 🢣 7 = 0 +V2, V2= 7
C14 = U1 + V4 🢣 10 = 0 +V4 , V4 =10
C 22 = U2 + V2 🢣 9 = U2 + 7, U2 = 2
C23 = U2 + V3 🢣 12= 2 + V3, V3 = 10
C31 = U3 + V1 🢣 14 = U3 + 12, U3= 2
Un occupied cell Opportunity cost [ Kij= Cij –(Ui
+Vj)] C13 = 10 – ( U1+V3) = 10 - ( 0 +10) = 0
C21 = 10 – (U2 +V1) = 10 – (2 + 12) = - 4
C24 = 10 – (U2 +V4) = 10 – ( 2 + 10) = -2
C32 = 12 - (U3 +V2) = 12 - (2 +7) = 3 (greatest
positive
C33 = 9 - (U3 + V3) =9– (2 + 10) = -3
C34 = 12 - (U3 + V4) = 12 - ( 2 + 10) = 0
 Reallocation of 15 million exposure

10/18/2024 OR LECTURE SLIDE 64

 First Improved table
Age group Exposu
Media 13- 18 19-25 26 -35  36 re
level

U1=0
TV 12 30 7 10 10 10 40 million

U2=-1 Radio 10 9 10 12 20 10 30 million

U3 = Magazine 14 5 12 15 9 12 20 million
2 Desire 35 25 20 10 90 million
d million million million million
exposu
re
V1 =12 V2= 10 V3= 13 V4= 10
 Occupied cell Cell cost (Cij =Ui +Vj)
C11 = U1 + = 12 = 0 + V1, V1 = 12
V1 C14 = U1 + = 10 = 0 + V4, V4 = 10
V4 C22 = U2 + = 9 = U2 + 10, U2 = -1
V2 C23 = U2 + = 12= -1 + V3, V3 = 13
V3 C31 = U3 + = 14 = U3 + 12 ,U3 = 2
V1 C32 = = 12 = 2 +V2, V2=
Reallocation
U3 + V2 of 5 million exposures
10/18/2024 OR LECTURE SLIDE 65
 Un occupied cell Opportunity cost [ Kij= Cij –(Ui
+Vj)] C12 = 7 - (U1 +V2) 🢣 7- (0 +10)
= -3
C13 = 10 – ( U1 +V3 🢣 10 - ( 0 +13) = -3
C24
C21 ==1010– –( (U2 +V4)🢣🢣10
U2+V1) 10- ( -1+12)
– (-1 +10)==-1
1(greatest improvement
(U3 +V3) 🢣 9 – ( 2+13) = - 6
= 9 – C33
potential)
C34 = 12 – (U3 +V4) 🢣 12 – (2 +10) = 0
Second improved
table Age group Exposure
Media 13-18 19 25 26-35  36 level
U1 = -
0 TV 12 35 7 10 10 5 40 million

Radio 10 9 5 12 20 10 5 30 million
U2 = 0
U3 = 3 Magazine 14 12 20 9 12 2 million
0
Desired 35 25 20 10 90 million
exposure million million million million
V1= 12 V2= 9 V3= 12 V4= 10
10/18/2024 OR LECTURE SLIDE 66
 Occupied cell Cell cost (Cij =Ui
+Vj) C11 = U1 +V1 = 12= 0 +V1, V1=12
C14 = U1 +V4 = 10 = 0 + V4, V4 =10
C22 = U2 + V2 = 9 = 0 + V2, V2 =9
C23 = U2 +V3 = 12 = 0 +V3, V3 =12
C24 = U2 +V4 = 10 = U2 + 10, U2
=0 C32 = U3 +V2 = 12 = U3 + 9 ,U3
=3
 Unoccupied cell cell evaluator [ Kij= Cij – (ui
+vj) C12 = 7 – ( U1 + V2) = 7- ( 0 + 9) =-2
C21 == 10
C13 10 –- ( U1
U2 ++V1)
V3) == 10
10--(0
( 0+12)
+ 12)=-2
=-2
C31 = 14 – ( U3 +V1) = 14- ( 3+12) = -1
C33 = 9 – ( U3 + V3) = 9 - ( 3 +12) = - 6
C34 = 12 – ( U3 + V4) = 12- (3 + 10) = -1
Now the solution is optimal since all cell evaluators are negative.
Total profit obtained = 1,200*35,000,000 + 1,000 *5,000,000 + 900* 5,000,000
+1,200 * 20,000,000 + 1,000 * 5,000,000 + 1,200 * 20,000,000 = 104,500,000,000

10/18/2024 OR LECTURE SLIDE 67

 Self test Exercise
Q1. ABC Private Ltd. is in the business of manufacturing and selling office shirts
for men. It has four factories located in different parts of the country and the
monthly capacities of the factories in thousand are as given below. The shirts are
made in a few standard designs and colors, and each factory can make all types of
shirts in any size subject to the overall capacity of the factory.

From the factories, the shirts are transported to five warehouses located in five
different regions. The warehouses in turn supply to the distributors and the
retailers. The monthly demand of shirts (in thousand) from the warehouses is as
follows:

The cost of transporting a shirt from a factory to a warehouse depends on the

distance between them and the cost of transporting a shirt from each factory to each
warehouse is given in the table below:

10/18/2024 OR LECTURE SLIDE 68

 From To Warehouse
Factory A B C D E

I 6 3 4 2 5
II 11 7 5 10 9
III 10 7 1 2 8
IV 12 10 5 3 5
How many shirts are to be produced, in which factory, and how are these to be
dispatched to the warehouse so that the total cost involved in transportation is
minimized.
(a) Use the LCM and VAM Method to get an initial feasible solution.
(b)Check if the solution obtained by LCM above is an optimal allocation and if not,
then find the optimal solution using stepping stone method.
Q2. The Purchase Manager, Mr. Alemu, of the State Road Transport Corporation
must decide on the amount of fuel that should be bought from three possible
vendors. The corporation refuels its buses regularly at the four depots within the
area of its operations. The oil companies have said that they can furnish up to the
following amounts of fuel during the coming month: 275,000 liters by oil company
1; 550,000 liters by oil company 2; and 660,000 liters by oil company 3. The required
amount of the fuel is 206, 250 liters by depot 1; 316, 250 liters at depot 2; 426, 2500
litres at depot 3; and 536, 250 litres at depot 4.
10/18/2024 OR LECTURE SLIDE 69
When the transportation costs are added to the bid price per liter supplied, the
combined cost per liter for fuel from each vendor, servicing a specific depot, is as
under:
Company1 Company2 Company3
Depot 1 25 24.75 24.25
Depot 2 25 25.50 26.75
Depot 3 24.50 26 25
Depot 4 25.50 26 24.50

(a) Use LCM and VAM Method to get an initial feasible solution.
(b)Check if the solution obtained by LCM above is an optimal allocation and if not,
then find the optimal solution using MODI method.
Q3. A company has four manufacturing plants and five warehouses. Each plant
manufactures the same product, which is sold at different prices in each warehouse
area. The cost of manufacturing and cost of raw materials are different in each plant
due to various factors. The capacities of the plants are also different. The relevant
data is given in the following table:

10/18/2024 OR LECTURE SLIDE 70

 Item Plant 1 plant 2 plant 3 Plant 4
Manufacturing cost( in birr) 12 10 8 8
Raw material cost (in birr) 8 7 7 5
Capacity 10,000 20,000 12,000 8,000

The company has five warehouses. The prices, transportation costs

sale demands are given in the following table: and
Transportation cost per unit(birr) Sale
Warehouse Plant 1 Plant 2 Plant3 Plant 4 price Demand

A 4 7 4 3 30 8,000
B 8 9 7 8 32 12,000
C 2 7 6 10 28 14,000
D 10 7 5 8 34 7,000
E 2 5 8 9 30 9,000
a) Use LPM and VAM Method to get an initial feasible solution.
b) Check if the solution obtained by LPM above is an optimal allocation and if
not, then find the optimal solution using stepping stone method.

10/18/2024 OR LECTURE SLIDE 71

 3.4. SPECIAL
ISSUES
Dear students, in the previous sub sections you learned different methods of
solving standard transportation problem (i.e. a transportation problem with cost
minimization as its objective). There are a number of special issues in relation to
the transportation model and , in some cases you may face the following special
situations.. They are:
a) Determining if there are alternate optimal solutions.
b) Defining and handling degeneracy (too few occupied cells to permit evaluation of
a solution).
c) Avoiding unacceptable or prohibited route assignments.
d) Dealing with problems in which supply and demand are not equal.
e) Solving maximization problems.
A. Alternate Optimal Solutions
Sometimes, transportation problems have multiple optimal solutions. In such
instances, it can be useful for a manager to be aware of alternate solutions, because
this gives the manager an option of bringing non-quantitative considerations into
the decision. In the case of the transportation problem, the existence of an alternate
solution is signaled by an empty cell’s evaluation equal to zero.

10/18/2024 OR LECTURE SLIDE 72

 B. Degeneracy
A condition that occurs when the number of occupied cells in any solutions less
than the number of rows plus the number of columns minus 1 in a transportation
table. A solution will be called degenerate when the number of occupied cells is less
than the required number, m + n - 1.
In such cases, the current solution cannot be improved because it is no possible to
draw a closed path for every occupied cell. Also, the values of dual variables ui
and vj which are used to test the optimality cannot be computed. Thus, we need to
remove the degeneracy to improve the given solution.

 The degeneracy in the transportation problems may occur at two stages:

1. When obtaining an initial solution
2. During improvement (or at any stage while moving towards optimal solution.
To resolve degeneracy, we processed by allocating a very small quantity close to zero
to one or more unoccupied cell so as to get m+n-1 number of occupied cells. This
amount is denoted by a Greek letter ε (epsilon) or (delta). This quantity would not
affect the total cost as well as supply and demand values.
10/18/2024 OR LECTURE SLIDE 73
 ε = Almost zero
In a minimization transportation problem, allocate the smallest transportation
cost to ε. In a maximization transportation problem, it should be allocated to a cell
that has a high pay off value.
Insert ε when it is able to create a closed loop for each occupied cell. The purpose
of epsilon/delta is to enable evaluation of the remaining empty cells. The choice of
location for the epsilon/delta can be somewhat tricky: some empty cells may be
unsuitable if they do not enable evaluations of remaining empty cells. Not all choices
would be acceptable.
The epsilon/delta cannot be placed in a cell which later turns out to be in a
negative position of a cell path involved in reallocation because epsilon/delta will be
the “ smallest quantity a negative position “ and shifting that minute quantity around
the cell path will leave the solution virtually unchanged. Consequently, a certain
amount of trial and error may be necessary before a satisfactory location can be
identified for epsilon/delta.
Actually, the No of epsilon/deltas needed will equal the difference between the
No of completed cells and m+n-1. However; you will only be exposed to the most
common case in which one more completed cell is needed.

10/18/2024 OR LECTURE SLIDE 74

Example :Solve the following transportation problem.

Solution: Using NWCM and MODI, the initial solution

is:

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 Ci j = Ui + Vj
==>C 11 = U 1 +V 1 ==>3=0+ V 1 ==>V 1 =3, U 1 =0 by convention
==>C 1 2 = U 1 +V 2 ==>3=0 +V 2 ==>V 2 =3
==>C 2 2 = U 2 +V 2 ==>6= U 2 +3==>U 2 = 3
Note: m=2 and n=2==>2+2-1=3==> Occupied cells=2< 3 (Degeneracy)

Reallocation of 30 units in loop constructed on cell (2,1)

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 Cij = Ui + Vj
==>C11 =U1 +V1 ==>3=0+V1 ==>V1 =3, U1 =0 by convention
==>C 2 1 = U 2 +V 1 ==>4= U 2 +3==>U 2 =3
==>C 1 2 = U 1 +V 2 ==>3= 0+ V 2 ==>V 2 = 3
Table: Test of optimality

C. Unacceptable Allocations
In some cases, an origin-destination combination may be unacceptable. This may be due to
weather factors, equipment breakdowns, labor problems, or skill requirements, road hazards
(snow, flood, etc.), traffic regulations, etc., may arise that either prohibit, or make
undesirable, certain combinations (routes) and then it is not possible to transport goods
from certain sources to certain destination.
If there are some unacceptable allocations in a given transportation problem, solve such
kinds of problem, by assign a cost 10 times the largest cost in the table and then it will
be
uneconomical to transport to that cell. Then do as usual. (Initial feasible solution by
NWCM/LCM/VAM and optimal solution by stepping stone /MODI).
10/18/2024 OR LECTURE SLIDE 77
Example

Note that due to uncontrollable reason it is impossible to transport from S3to C. So

to solve the problem first adjust it as follows.

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The cell cost of S3C i.e. 2 will be replaced by 70 i.e. 7 * 10, because 7 is the
largest cost in the table. Then do as usual.
D. Unequal Demand and Supply
To solve a problem with an equal supply and demand total, first,
convert the unbalanced TP into a balanced TP by using dummy destination/dummy
source.
*If total Supply > Total demand, then create a fictitious or artificial destination
called dummy destination i.e.: total Supply > Total demand===>Add dummy column
*But if excess demand (Supply < demand) exists add a dummy source (add a
dummy row)
 Note: the cost of “shipments” to the dummy is usually set at zero ==> No real cost
E. Maximization
Some transportation problems concern profits or revenues rather than costs. In such cases,
the objective is to maximize rather than to minimize. Such problems can be handled by adding
one additional step at the start:
Identify the cell with the largest profit and subtract all the other cell profits from that
value. Then replace the cell profits with the resulting values. These values reflect the
opportunity costs that would be incurred by using routes with unit profits that are less than
the largest unit profit. Replace the original unit profits with these opportunity cost solution.
This will be identical to maximizing the total profit.

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 3.5. Assignment Problems
The Assignment Problem(AP) refers to the class of LPPs that involves
determining the most efficient assignment of people to projects, salespeople to territories,
contracts to bidders, jobs to machines, and so on. The objective is to assign a number
of resources to an equal number of activities so as to minimize total costs or total
time or maximize total profit of allocation.
One important characteristic of assignment problem is that only one job (or
work) is assigned to one machine or project. Because of its simple structure, the
assignment problem can be solved most efficiently by its own unique method rather
than by the previously described transportation methods.
The problem of assignment arises because available resources such as men,
machines, etc have varying degrees of efficiency for performing different activities
such as job. Therefore, cost, profit or time of performing the different activities is
different.
Assumptions:
The AP is a special case of TP under the condition that the number of origins is
equal to the number of destinations. Viz. m=n .Hence assignment is made on the
basis of 1:1.

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Following are the assumptions:
 Number of jobs is equal to the number of machines or persons
 Each man or machine is loaded with one and only one job.
 Each man or machine is independently capable of handling any of the job being presented.
Loading criteria must be clearly specified such as “minimizing operating time” or
“maximizing profit” ,or “minimizing production cost” or “minimizing throughout
(production cycle) time ” etc.
Remark:
🢣 The AP is considered as a special TP in which the supply at each source and the
demand at each destination are always one unit.
🢣 Since the supply and demand are always equal to one unit in each row and column,
there is no need to write them in the assignment table.
Notes:
Assignment Problem is a variation of the transportation problem with two
characteristics:
a. Cost matrix is a square matrix
b. The optimal solution for the problem would always be such that there would be only
one assignment in a given row or column of the cost matrix

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 3.5.1. Application of Assignment Problem
 Few applications of assignment problem are as follows:
 Assignment of employees to machines.
 Assignment of operators to jobs.
 Effectiveness of teachers and subjects.
 Allocation of machines for optimum utilization of space.
 Allocation of salesmen to different sales areas.
 Allocation of clerks to various counters.
In all the cases, the objective is to minimize the total time and cost or otherwise
maximize the sales and returns.
3.5.2. Comparison between Transportation Problem and Assignment Problem
Now let us see what are the similarities and differences between Transportation problem
and Assignment Problem.
Similarities
 Both are special types of linear programming problems.
Both have objective function, structural constraints, and non-negativity constraints.
And the relationship between variables and constraints are linear.
 The coefficients of variables in the solution will be either 1 or zero in both cases.
Both are basically minimization problems. For converting them into maximization
problem same procedure is used.
10/18/2024 OR LECTURE SLIDE 82
Example: Service costs of different team assignment ( in
thousands).

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The above problem can be presented as a LPP as follows:
Min Z = 20x11 +15x12 + 31x13 +17x21 +16x22 +33x23
+18x31+19x32+27X33
Subject to the constraints.

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Since all xij can be either 0 or 1, there will be one assignment in each supply
constraint and one assignment i n each demand constraint. As in the
transportation problem, assignment problems can be balanced or not. In a
balanced case, the number of objects to be assigned equals the number of objects
to which they are assigned. Unbalanced problem can be balanced by adding a
dummy (dummies) with zero cost coefficients.

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 3.5.3. Methods of solving assignment problems
An assignment problem can be solved by the following methods:
 Enumeration method
Simplex method
Transportation method
Hungarian method
Hungarian Method/Flood’s Technique/
The Hungarian Method (developed by Hungarian mathematician D. Konig) of
assignment provides us with efficient method of finding the optimal solution
without having to make a direct comparison of every solution. It works on the
principle of reducing the given cost matrix (the principle of matrix reduction) to a matrix
of opportunity costs, which means that by subtracting and adding appropriate
numbers in the cost table or matrix ,we can reduce the problem to a matrix of
opportunity costs.
Opportunity costs show the relative penalties associated with assigning resource
to an activity as opposed to making the best or least-cost assignment. If we can
reduce the cost matrix to the extent of having at least one zero i n each row and
column, then it will be possible to make optimal assignments.

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 Steps in solving assignment
Step 1. Develop the costproblems:
table from the given problem
If the number of rows does not equal the number of columns and vice versa, then
a dummy row or dummy column must be added. The assignment costs for dummy
cells are always zero.
Step 2. Find the opportunity cost table
I.e. The transformation of the cost matrix to what is termed as a total -opportunity
cost matrix. It involves two operations:
a. Perform row operation
I.e. Locate the smallest element in each row of the given cost table and then subtract
it at the given cost table and then subtract that from each element of that row
b. Perform column operation
I.e. In the reduced matrix obtained from 2(a), locate the smallest element i n each
column and then subtract that from each element of t hat column. Notice that each
row and column now have at least one zero value.
Step 3. Test for an optimal assignment
I.e. test the table resulting from step 2 to see whether an optimal assignment
can be made. The procedure is:
a. Draw the minimum number of Horizontal and /or Vertical lines necessary to
cover all zeros costs.
10/18/2024 OR LECTURE SLIDE 87
Draw the lines by trial and error but always try to cover two or more zeros with one
line.
b. Count the number of the lines
If the number of lines equals either the number of rows or columns in the table, an
optimal assignment can be made. If the number of lines is less than the number of
rows or columns, an improvement is possible (we proceed to step 4).
Step 4. Improve the present opportunity cost table (matrix)
This is done by the following operations:
a.Find the smallest entry in the uncovered cells (cells with no lines through them) and
subtract it from all entries in the uncovered cells.
b.Add the same smallest entry to those cells in which the lines intersect (cells with two line
them)
c. Cells with one line through them are transferred (i.e. unchanged to the improved table).
In those problems where the first improvement does not yield an optimal solution, we
keep on improving the solution by repeating step 4 until an optimal solution
is achieved.
Step 5: Make an optimal assignment
An optimal assignment should be made to cells with a zero entry, maintaining the one-
to-one requirement.
10/18/2024 OR LECTURE SLIDE 88
If more than one optimal solution exists, a trial-and –error approach can be used
to find all possible combination assignments in the zero cells.
Note that multiple optimal solutions are possible.
Example 1: A computer center has three programmers. The center wants three
application programs to be developed. The head of the computer center, after
studying carefully the programs to be developed, estimate the computer time in
minutes required by the experts for the application programs as follows:

Assign the programmers to the programs in such a way that the total
computer time is minimum.

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Solution: Steps 1 and 2:
a. Perform row reduction
The minimum time element in row 1, 2, and 3 is 80, 80 and 110 respectively.
Subtract those elements from all elements in their respective row. The reduced time
matrix is:
Table: After row reduction

b. Column reduction
Since column B has no one ‘0’, perform also column reduction. The minimum time
element in columns A, B and C is 0, 10 and 0 respectively. Subtract these elements
from all elements in their respective column to get the reduced time matrix.
Table: After column reduction

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Step 3: Test for an optimal assignment
a. Draw the minimum number of horizontal and /or vertical lines necessary to
cover all zero times (costs).
1 4 10 0
Table: Test of optimal assignment
2 0 0 30
3 20 10

b. Count the number of lines

Since the number of lines is equal to the number of rows/columns, the optimal
solution is obtained. Thus proceed directly to step 5.
Step 5.Make an optimal assignment
An optimal assignment should be made to cells with a zero entry, maintaining the
one-to-one requirement.
Table: optimal assignment

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Note: In optimal assignment, start with row/column having one zero and cancel the
alternative zeros(x). The pattern of assignment among programmers and programs
with their respective time (in minute) is given below:

2. A department has five employees with five jobs to be performed .The time (in
hours) each man will take to perform each job is given in the effectiveness
matrix.

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How should the jobs be allocated, one per employees, so as to minimize the total
man- hours?
Solution Table: After row
reduction
I II III IV V
-5 A 5 0 8 11
-3 B 0 6 15 3
-2 C 5 0 0
-7 D 0 5 2 0 5
-4 E 3 5 6 0 8

🢣 No need of performing column operation since there are at least one in each
zero row.
Since the number of lines(4) less than the number of rows/columns,
an improvement is possible.
Step 4: Improve the present opportunity cost table. This is done by the
following operations;
a. Select the smallest entry (element) 2 in this case among all uncovered elements by the
lines and subtract it from all entries in the uncovered cells.
10/18/2024 OR LECTURE SLIDE 93
b. Add the same smallest entry to those cells in which lines intersect (cells with two lines
on them).
c. Cells with one line through them are unchanged to the improved
table
Table: After improvement
A I7 0 8 1 II 11 III
IV V
B 0 4 13 1 1
C 0 0 2
1 5 0
D 0 2 0 0 2
E 3 3 4 0 6

Since the number of lines equals to the number of rows/columns, the solution is
optimal.
Table: Optimal assignments
In order to perform the assignment process successfully we have to give priority
for row or column having single zero first to assign. The pattern of assignments
among jobs and employees with respective time (in hours) is given below:

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 Job Employees Time (in hours)
A II 5
B I 3
C V 2
D III 9
E IV 4
Total time 23 hours

Example3: A lead draftsman has five drafting tasks to accomplish and five idle
draftsmen. Each draftsman is estimated to require the following number of hours
for each task.
Tasks/activities
D A B C D E
r
a 1 60 50 100 85 95
t 2 65 45 100 75 90
s
m 3 70 60 110 97 85
e 4 70 55 105 90 93
n
5 60 40 120 85 97

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If each draftsman costs the company birr 150 per hour, including overhead, find the
assignment of draftsmen to tasks that will result in the minimum total cost. What would be
the total cost? Solution Table: After row reduction
A B C D E
-50 1 10 0 50 35 45
-45 2 20 0 55 30 45
-60 3 10 0 50 37 25
-55 4 15 0 50 35 38
-40 5 20 0 80 45 57

Table: After row

reductionA B C D E
1 0 0 0 5 20
1 5 0 20
2
3 0 0 0 7 0
4 5 0 0 5 13
5 2 0 3 15 32
-10 -0 -50 -35 -25

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 Table: Optimal assignments
Since the number of lines drawn are equal to the number of row and/ or
columns we can make an assignment now. In order to perform the assignment
process successfully we have to give priority for row or column having single zero
first to assign. The pattern of assignments among jobs and draftsmen with
respective time (in hours) is given below:
Drafts man Task/ activity Hours
1 A 60
2 D 75
3 E 85
4 C 105
5 B 40
Total hours needed 365

Total cost = Total hours x rate per hour = 365 x 150 = 54,750 Birr

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 Test your self by solving the following assignment problems
Q1. A construction company has requested bids for subcontracts on five different projects.
Five companies have responded. Their bids are represented below. Bid amounts are in
million Birr for each project.
Project
I II III IV V
B
i 1 41 72 39 52 25
2 22 29 49 65 81
d
3 27 39 60 51 40
d 4 45 50 48 52 37
e 5 29 40 45 26 30

r
Determine the minimum cost assignment of subcontracts to bidders, assuming that each
bidder can receive
s only one contract.
Q2. A solicitors’ firm employs typists on hourly piece-rate basis for their daily work. There
are five typists and their charges and speed are different. According to an earlier
understanding only one job was given to one typist and the typist was paid for a full hour,
even if he worked for a fraction of an hour. Find the least cost allocation/assignment for the
following data:
10/18/2024 OR LECTURE SLIDE 98
 Typist Rate per No. of pages Job No. of
hour(in birr) typed per hour pages

A 150 12 P 200
B 160 14 Q 180
C 130 8 R 150
D 140 10 S 300
E 140 11 T 190

Q3. An automobile dealer wishes to put four repairmen to four different jobs. The
repairmen have somewhat different kinds of skills and they exhibit different levels of
efficiency from one job to another. The dealer has estimated the number of man-hours that
would be required for each job-man combination. This is given in matrix form in the
following table: Find the optimal assignment that will result in minimum man hours
needed.

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Q4. A tourist company owns a one car in each of the five locations viz. L1, L2, L3, L4, L5
and a passengers in each of the five cities C1, C2, C3, C4, C5 respectively. The
following table shows the distant between the locations and cities in kilometer. How should
be cars be assigned to the passengers so as to minimize the total distance covered.
Cities

C1 C2 C3 C4 C5

L
L1 120 110 115 30 36
o

c L2 125 100 95 30 16

a L3 155 90 135 60 50
t
i
L4 160 140 150 60 60
o
L5 190 155 165 90 85
n
s

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100
 3.6. SPECIAL CASES IN THE ASSIGNMENT
Dear students PROBLEMS
, I hope by now you can solve the assignment problem with the
aim minimizing total cost or time. Good! Now let us see some especial situations in
assignment problems and the way we make them suitable to be solved by the
Hungarian Method.
I. Multiple Optimum Solutions. Sometimes, it is possible to have two or more ways
to cross out all zero elements in the final (optimum) reduced matrix for a given
problem. This implies that there are more than the required numbers of
independent zero elements. In such cases, there will be multiple optimum solutions
with the same total cost of assignment. In such type of situations, management may
exercise their judgment or preference and select that set of optimum assignments
which is more suited to their requirement.
In multiple optimal solutions, no unique 0 will exist at some point, resulting in more
than one choice for assignment and hence, more than one optimal solution. It
should be noted that all optimal solutions will yield the same value of the objective
function.

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101
Example 1: Given this final assignment table, identify two optimal
solutions.

Solution :The first assignment must be B-1, because B-1 is the only 0 that appears in a single
row or column. Having made that assignment, there are two choices for the remaining two
rows, and two choices for the remaining two columns. This results in two possible solutions,
as shown:
Assignment
Job to Machine or Job to Machine
A 2 A 3
B 1 B 1
C 3 C 2

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102
Example 2: The foreman of a machine shop wants to determine a minimum cost
matching for operators and machines. The foreman has determined hourly cost for
four operators for the four machines, as shown in the following cost table.

o Machine cost( in Birr)

A B C D
p
1 70 80 75 64
e 2 55 52 58 54
r 3 58 56 64 68
4 62 60 67 70
a
t
Required:
a. Determine theo minimum-cost assignment for this problem
b. What is the rtotal cost for the optimal assignment?
c.Is there an alternative optimal assignment? What is it? Calculate the total cost for
the alternate optimal assignment.

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103
 Solution: Table After row
reductionOperator Machine
A B C D
1 6 16 11 0
2 3 0 6 2
3 2 0 8 12
4 2 0 7 10

Table After column reduction

Operator Machine
A B C D
1 4 5 0
16
2 1 0 0 2
3 0 0 2 12
4 0 0 1 10

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104
 Assignment
Operator Machine Cost

1 D 64

2 C 58

3 A 58

4 B 60 / Total
cost=240
c. Yes! Alternative optimal
assignment Operators Machine Cost

1 D 64

2 C 58

3 B 56

4 A 62 / Total cost =
240

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105
II. Maximization case in assignment problems
There may arise situations when the assignment problem calls for maximization of
profit, revenue, etc as the objective function. Such problem may be solved by
converting the given maximization problem into a minimization problem by the
following procedure:
i. Find the largest profit coefficient in the entire.
ii. Subtract each entry in the original table from the largest
profit coefficient.
The transformed assignment problem so obtained can be solved by using
Hungarian method.
the
Example 1 : A company has four territories open, and four salesmen available for
an assignment. The territories are not equally rich in their sales potential. Based on
the past performance, the following table shows the annual sales (in thousand
Birr) that can be generated by each salesman in each territory. Find the optimal
assignment and the maximum expected total sales.

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106
 S Territory
a
l I II III IV
e A 42 35 28 21
s
m B 30 25 20 15
e
n C 30 25 20 15
D 24 20 16 12

Solution: Convert maximization problem into minimization problem by subtracting all

elements from the highest element (i.e. 42). Thus, the equivalent cost table is:

I II III IV

A 0 7 14 21

B 12 17 22 27

C 12 17 22 27

D 18 22 26 30

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 Table after Row reduction
I II III IV
A 0 7 14 21
B 0 5 10 15
C 0 5 10 15
D 0 4 8 12

Table after Row reduction

I II III IV
A 3 6 9
B 1 2 3
C 1 2 3
D 0 0 0 0

Since the number of lines drawn are not equal to the number of rows and /
or columns an improvement is possible

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 Table after
I improvement
II II IV
A 5 8
B 1 2
C 1 2
D 0 0

Since the number of lines drawn are not equal to the number of rows and /
or columns an improvement is possible
I II III
A 2 4 7
IV
B 0 0 0 1
C 0 0 0 1
D 1 0 0

Since the number of lines drawn are equal to the number of rows and /
or columns optimal assignment is possible
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The pattern of two alternative optimal assignments among territories
and salesmen with respective sale is given below:
Assignment set I Assignment set II

Salesman Territory Sales(1000) Salesman Territory Sales (1000)

A I 42 A I 42

B III 20 B II 25

C II 25 C III 20

D IV 22 D IV 12

Total 99,000 Total 99,000

Exercise: A marketing manager has five salesmen and five sales districts.
Considering the capabilities of the salesmen and the nature of districts, the
marketing manager estimates that the sales per month (in hundred Birr) for
each salesman in each district would be as follows:

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 Districts
S A B C D E
a
l 1 32 38 40 28 40
e 2 40 24 28 21 36
s
m 3 41 27 33 30 37
e 4 22 38 41 36 36
n
5 29 33 40 35 39

III. Unbalanced Assignment Problem (unequal number of rows and columns)

The Hungarian method for solving an assignment problem requires that the
number of columns and rows in the assignment matrix should be equal However,
when the given cost or profit matrix is not a square matrix, the assignment problem
is called an unbalanced problem. In such cases a dummy row(s) or column(s) are
added in the matrix (with zeros as the cost or profit elements) to make it a square
matrix. After making the given cost or profit matrix a square matrix, the Hungarian
method may be used to solve the problem.
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111
Example: MEGA printing press, a publisher headquartered in Addis Ababa, wants to
assign three recently hired college graduates, Marta, Bakcha and Hirut to regional
sales districts in Mekelle, Bahir Dare, and DireDawa. But the firm also has an opening
in Gambela and would send one of the three there if it were more economical than a
move to Mekelle, Bahir Dar and Dire Dawa. It will cost Br. 1,000 to relocate Marta to
Gambela, Br. 800 to relocate Baklcha there, and Br. 1,500 to move Hirut. What is the
optimal assignment of personnel to offices?

Office Mekelle Bahr dare Dier dewa

Hire

Marta Br. 800 Br. 1,100 Br. 1,200

Bekcha Br. 500 Br. 1,600 Br. 1,300

Hirut Br. 500 Br. 1,000 Br. 2,300

Solution : To balance the problem, we add a dummy row (person) with a zero
relocation cost to each city.

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112
 Mekelle Bahirdare Dire dewa Gambella

Marta 800 1,100 1,200 1,000

Bakcha 500 1,600 1,300 800

Hirut 500 1,000 2,300 1,500

Dummy 0 0 0 0

Table: after row reduction

Mekelle Bahirdare Dire dewa Gambella

Marta 0 300 400 200

Bakcha 0 1100 800 300

Hirut 0 500 1800 1000

Dummy 0 0 0 0

Number of lines are not equal to number of rows or columns, so keep

improving
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113
 Mekelle Bahridare Diredewa Gambella
Marta 100 200 0
Bakcha 900 600 1 0
Hirt 400 1,600 8 0
Dummy 200 0 0

Number of lines are not equal to number of rows or columns, so keep

improving
Mekelle Bahridare Diredewa Gabmella
Marta 0 100 0
Bakcha 800 500 100

Hirut 300 1500 800

Dummy 0 0 0 100
Number of lines are not equal to number of rows or columns, so keep
improving

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114
 Mekelle Bahirdare Diredewa Gambella
Marita 10 0 100
0
Bakcha 700 400
Hirut 200 1400 0
Dummy 40 0 0 0 10 0

Since the number of lines are equal to number of rows or columns,

assignment is possible now. an
Person City Cost

Marita Bahir dare 1,100

Bekcha Gambella 800

Hirut Mekelle 500

Dummy Dire dewa 0

Total cost of assignment = 1100 + 800 +500 + 0 =2,

400
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115
 IV. Restrictions on Assignments
In certain instances, it may happen that a particular match or pairing may be
either undesirable or otherwise unacceptable. For example, an employee may not
have the skills necessary to perform a particular job or a machine may not be
equipped to handle a particular operation. In such cases, the cost of performing that
particular activity by a particular resource is considered to be very large (written as
M or ∞ ) so as to prohibit the entry of this pair of employee-job into the final
solution. When such a restriction is present, a letter (M) is often placed in the table
in the position that would represent a paring. Analysis is performed as usual except
the M is ignored throughout the analysis. That is, M is not used in any reductions,
nor is any value added to it or subtracted from it during the course of the analysis.
Example: In the modification of a plant layout of a factory four new machines M1,
M2, M 3 and M 4 are to be installed in a machine shop. There are five vacant places
A, B, C, D and E available. Because of limited space, machine M 2 can not be placed
at C and M 3 cannot be placed at A. the cost of placing of machine at place i (in
hundred birr) is shown below.

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116
 M Location
a A B C D E
c M1 9 11 15 10 11
M2 12 9 - 10 9
h
M3 - 11 14 11 7
i M4 14 8 12 7 8
n
Find the optimal assignment schedule.
e
Solution: As the cost matrix is not balanced, add one dummy row (machine 5) with
a zero cost element in that row. Also assign a high cost, denoted by M, to the pair
(M2, C) and (M3, A). Apply the Hungarian method to solve the problem
Location
M A B C D E
a
M1 9 11 15 10 11
c M2 12 9 M 10 9
h M3 M 11 14 11 7
M4 14 8 12 7 8
i
n M5 0 0 0 0 0

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The total minimum cost and optimal assignments made are as
follows: Machine Location Cost
M1 A 900
M2 B 900
M3 E 700
M4 D 700
M5( Dummy) C 0
Total cost 32,000

Self test exercise

Q1. Alpha Corporation has four plants, each of which can manufacture any one of
four products A, B, C or D. Production costs differ from one plant to another and so do
the sales revenue. The revenue and the cost data are given below. Determine
which product should each plant produce in order to maximize profit and what is
the total amount of profit?. Sales Revenue (in hundred thousand Birr) is given
below in the table followed by production cost (in hundred thousand Birr).
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 Plant
P
1 2 3 4
r
A 50 68 49 62
o
B 60 70 51 74
d C 52 62 49 68

u D 55 64 48 66

c Production cost (in hundred thousand

t Birr)
Plant

P 1 2 3 4
r A 49 60 45 61
o B 55 63 45 49
d C 55 67 53 70

u D 58 65 54 68

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119
Q2. A city corporation has decided to carry out road repairs on four main arteries
of the city.. The corporation has floated tenders and five contractors have sent in
their bids. In order to expedite work, one road will be awarded to only one
contractor. Cost of repairs in million birr is given below.
C Road
o R1 R2 R3 R4
n C1 9 14 19 15
t C2 7 17 20 19
r C3 9 18 21 18
C4 10 12 18 19
a
C5 10 15 21 16
c
t

a) Find the best

o way of assigning the repair work to the contractors and
the costs.r
b) Which of the five contractors will be unsuccessful in his bid?

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Q3. A large oil company operating a number of drilling platforms in a Sea is
forming a high speed rescue unit in order to cope with emergency situations that
may occur. The rescue unit comprises 6 personnel who, for reasons of flexibility,
undergo the same comprehensive training program. The six personnel are assessed
as to their suitability for various specialist tasks and the marks they received in the
training program are given in the following table:
Trainee number
Specialist task
I II III IV V VI

Unit leader 21 5 21 15 15 28
Helicopter pilot 30 11 16 8 16 4
First Aid 28 2 11 16 25 25
Drilling technology 19 16 17 15 19 8
Firefighting 26 21 22 28 29 24
Communication 3 21 21 11 26 26
Based on the marks awarded, what role should each of the trainees be given in the
rescue unit?

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121
 Q4. The personnel manager of a medium-sized company has decided to recruit two
employees D and E in a particular section of the organization. The section has five
fairly defined tasks 1, 2, 3, 4 and 5; and three employees A, B and C are already
employed in the section. Considering the specialized nature of task 3 and the special
qualifications of the recruit D for task 3, the manager has decided to assign task 3
to employee D and then assign the remaining tasks to remaining employees so as
to maximize the total effectiveness. The index of effectiveness of each employee
of different tasks is as under.
E Tasks
m I II III IV V
p
l A 25 55 60 45 30
o B 45 65 55 35 40
y
e C 10 35 45 55 65
e D 40 30 70 40 60
s
E 55 45 40 55 10

Assign the tasks for maximizing total effectiveness. Critically examine whether the
decision of the manager to assign task 3 to employee D was correct.

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 Q5. Consider a problem of assigning four clerks to four tasks. The time (hours)
required to complete the task is given below:

Tasks
A B C D
C 1 4 7 7 6
l
e 2 - 8 7 4

r 3 3 - 5 3
4 6 6 4 2
k

s
Clerk 2 cannot be assigned to task A and clerk 3 cannot be assigned to
task
B. Find all the optimum assignment schedules that minimize the total
time needed to complete the tasks.

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123
 THE END
THAN K YO U
FOR
YO U R
INTEREST!!
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