Subject Name: Operation Research

Q-1 Following matrix represents the cost per unit of transportation from three
Places to 4 destinations. The capacity of each place & demand at each
destination is also given. Give the optimum assignments so as to minimize the
total transportation cost. D1 D2 D3 D4 Supply

P1 20 30 50 17 7

P2 70 35 40 60 10

P3 40 12 60 25 18

Demand 5 8 7 15

Check-1 Balance Check- A problem is balanced if Total Demand = Total Supply, if they are not
equal it is said to be an unbalanced problem. In that case we need to convert it into a balanced
problem by adding a dummy row or dummy column with all values as zero.
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Check-2 Minimization Check- After balance check ensure that it is a

minimization problem if it is maximization problem, we need to convert it into
minimization by subtracting all the values from the highest value of the matrix.
If matrix represents cost it is a minimization problem and if matrix represents
savings or profit it is a maximization problem.
If nothing is mentioned, by default it is a minimization problem.

Our problem is a balanced problem as total Demand (35) = Total Supply (35)

It is also a minimization problem as matrix represents cost, so no need to convert.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Solution by North west Corner (NWC) Method

N D1 D2 D3 D4 Supply

P1 20 30 50 17 7
W E
P2 70 35 40 60 10

P3 40 12 60 25 18
S
Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply

5
P1 20 30 50 17 7

P2 70 35 40 60 10

P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
5 2
P1 20 30 50 17 7

P2 70 35 40 60 10

P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
5 2
20 30 50 17 7
P1
6
70 35 40 60 10
P2

40 12 60 25 18
P3

5 8 7 15
Demand

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
5 2
20 30 50 17 7
P1
6 4
70 35 40 60 10
P2

40 12 60 25 18
P3

5 8 7 15
Demand

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
5 2
20 30 50 17 7
P1
6 4
70 35 40 60 10
P2
3
40 12 60 25 18
P3

5 8 7 15
Demand

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
5 2
20 30 50 17 7
P1
6 4
70 35 40 60 10
P2
3 15
40 12 60 25 18
P3

5 8 7 15
Demand

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Initial Total Cost = 20*5 + 2*30 + 35*6 + 40*4 +

60*3 + 25*15
= 100 + 60 + 210 + 160 + 180 +
375
= 1085

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Feasibility Test- m+n-1 = No. of Occupied Cells

Where m=No. of Rows & n= No. of columns

3+ 4 -1=6 = no. of occupied cells (6)

Solution is feasible.
Apply optimality test. –MODI Method

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply Ui
5 2
20 30 50 17 7 U1 = 35
P1
6 4
70 35 40 60 10 U2= 40
P2
3 15
40 12 60 25 18 U3 = 60
P3

5 8 7 15
Demand
Vj V1= -15 V2= -5 V3= 0 V4= -35

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Optimality Test
Calculate the opportunity cost of unoccupied cells.
Opportunity Cost = Cij-(Ui+Vj)
P1-D3 50-(35 + 0)=15
P1-D4 17-(35-35)=17
P2-D1 70-(40-15) =45
P2-D4 60-(40-35)= 55
P3-D1 40-(60 -15) = -5
P3-D2 12-(60-5)= -43 Highly negative
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

A solution to be optimal all the opportunity costs should be zero or positive but here few
opportunity costs are negative, hence solution is not optimal. We need to make a loop at the
cell having highly negative opportunity cost.
There are three conditions of the loop.
1. it should be a closed loop.
2. loop should be formed with horizontal and vertical lines, the no. of lines should be even i.e
4, 6, 8.
3. all the corner points of that loop should be occupied cells.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply

5 2
P1 20 30 50 17 7 U1=
6 4
P2 70 - 35 40 + 60 10 U2=
3 15
P3 40 + 12 60 - 25 18 U3=

Demand 5 8 7 15
V1= V2= V3= V4 =

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Now assign +ive sign to cell P3-D2, then assign alternatively –ive to the next
corner then +ive & so on.

Compare the units allotted at the places where we have assigned –ive signs.

There are two places which have been assigned –ive signs. The units allotted at
these places are 6 & 3.

As 3 is the least units, deduct 3 units from both –ive places & add 3 units to both
the places where we have assigned +ive sign.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research
D1 D2 D3 D4 Supply

5 2
P1
20 30 50 17 7 U1= 43
3 7
P2
70 35 40 60 10 U2= 48
3 15
P3
40 12 60 25 18 U3= 25

Demand
5 8 7 15
V1= -23 V2= -13 V3= -8 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Optimality Test

Calculate the opportunity cost of

unoccupied cells.
Opportunity Cost = Cij-(Ui+Vj)

P1-D3 50- (43-8)= 15

P1-D4 17- (43 + 0)= -26
P2-D1 70- (48-23)= 45
P2-D4 60- (48+0)= 12
P3-D1 40- (25-23)= 38
P3-D3
Unit 3 Transportation Problem
60- (25-8)= 43
Centre for Distance and Online Education
Subject Name: Operation Research
D1 D2 D3 D4 Supply

5 2 +
P1
20 - 30 50 17 7 U1= 43
3 7
P2
70 35 40 60 10 U2= 48
3 15
P3
40 + 12 60 25 - 18 U3= 25

Demand
5 8 7 15
V1= -23 V2= -13 V3= -8 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research
D1 D2 D3 D4 Supply

5 2
P1
20 30 50 17 7 U1= 17
3 7
P2
70 35 40 60 10 U2= 48
5 13
P3
40 12 60 25 18 U3= 25

Demand
5 8 7 15
V1= 3 V2= -13 V3= -8 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Optimality Test
Calculate the opportunity cost of unoccupied cells.
Opportunity Cost = Cij-(Ui+Vj)

P1-D2 30- (17-13)= 26

P1-D3 50- (17-8)= 41
P2-D1 70- (48 + 3)= 19
P2-D4 60- (48 + 0)= 12
P3-D1 40- (25 + 3)= 12
P3-D3 60- (25-8)= 43
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

All opportunity costs are positive hence the solution is

optimal & the Total cost is
Total Cost = 20*5 + 17*2 + 35*3 + 40*7 +12*5 +
25*13
= 100 + 34 + 105 + 280 + 60 + 325
= 904

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Solution by Least Cost Method (LCM)

D1 D2 D3 D4 Supply

P1 20 30 50 17 7

P2 70 35 40 60 10

P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply

P1 20 30 50 17 7

P2 70 35 40 60 10

8
P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
7

P1 20 30 50 17 7

P2 70 35 40 60 10

8
P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
7

P1 20 30 50 17 7

P2 70 35 40 60 10

8 8
P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
7

P1 20 30 50 17 7
7
P2 70 35 40 60 10

8 8
P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
7

P1 20 30 50 17 7
7
P2 70 35 40 60 10

2 8 8
P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
7

P1 20 30 50 17 7
3 7
P2 70 35 40 60 10

2 8 8
P3 40 12 60 25 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Total Cost = 17*7 + 70*3 + 40*7 + 40*2 +

12*8 + 25*8

= 119 + 210 + 280 + 80 + 96 + 200

= 985

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Feasibility Test- m+n-1 = No of Occupied Cells

Where m=No. of Rows & n= No. of columns

3+ 4 -1=6 = no of occupied cells.

Solution is Feasible.

Apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research
D1 D2 D3 D4 Supply Ui

7
P1 20 30 50 17 7 U1=17
3 7
Cij – Ui = Vj P2 70 35 40 60 10 U2=55

Cij – Vj = Ui P3
2
40
8
12 60
8
25 18 U3= 25
Only applicable
Demand 5 8 7 15
to occupied cells
Vj V1= 15 V2= -13 V3= -15 V4 = 0

For Optimality Test first calculate Ui & Vj

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research
Optimality Test
Calculate the opportunity cost of unoccupied cells.
Opportunity Cost = Cij-(Ui+Vj)
P1-D1 20-(17+15)=-12
P1-D2 30-(17-13)= 26
P1-D3 50-(17 - 15) =48
P2-D2 35-(55-13)=-7
P2-D4 60 -(55 + 0 ) = 5
P3-D3 60-(25-15)=50

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

A solution to be optimal all the opportunity costs should be zero or positive but there are two
negative opportunity costs hence solution is not optimal. It implies that this cell needs
assignment. Select highly negative opportunity cost and find a closed loop at this cell with
other occupied cells.
There are three conditions of the loop.
1. it should be a closed loop.
2. loop should be formed with horizontal and vertical lines, the no. of lines should be even i.e
4, 6, 8.
3. all the corner points of that loop should be occupied cells.
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

D1 D2 D3 D4 Supply

+ 7 -
P1 20 30 50 17 7
3 7
P2 70 35 40 60 10
2 8 8
P3 - 40 12 60 25 + 18

Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Now assign +ive sign to cell P1-D1, then assign alternatively –ive to the next
corner then +ive & so on.
Compare the units allotted at the places where we have assigned –ive signs.

There are two places which have been assigned –ive signs. The units allotted at
these places are 7 & 2.

As 2 is the least units, deduct 2 units from both –ive places & add 3 units to both
the places where we have assigned +ive sign.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
2 5
P1 20 30 50 17 7 U1=17
3 7
P2 70 35 40 60 10 U2=67
8 10
P3 40 12 60 25 18 U3=25

Demand 5 8 7 15
V1= 3 V2= -13 V3= -27 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Optimality Test

Calculate the opportunity cost of unoccupied cells.

Opportunity Cost = Cij-(Ui+Vj)

P1-D2 30- (17-13)= 26

P1-D3 50- (17-27)= 60
P2-D2 35- (67-13)= -19
P2-D4 60- (67+ 0)= -7
P3-D1 40- (25+3)= 12
P3-D3 60- (25-27)= 62
Again solution is not optimal, let’s make a
loop at cell P2-D2
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

D1 D2 D3 D4 Supply
2 5
P1 + 20 30 50 17 - 7 U1=17
3 7
P2 - 70 + 35 40 60 10 U2=67

8 10
P3 40 - 12 60 25 + 18 U3=25

Demand 5 8 7 15
V1= 3 V2= -13 V3= -27 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Now assign +ive sign to cell P2-D2, then assign alternatively –ive to the next
corner then +ive & so on.
Compare the units allotted at the places where we have assigned –ive signs.

There are three places which have been assigned –ive signs. The units allotted at
these places are 3, 5 & 8.

As 3 is the least units, deduct 3 units from both –ive places & add 3 units to both
the places where we have assigned +ive sign.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply
5 2
P1 20 30 50 17 7 U1=17
3 7
P2 70 35 40 60 10 U2=48

5 13
P3 40 12 60 25 18 U3=25

Demand 5 8 7 15
V1= 3 V2= -13 V3= -8 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Optimality Test
Calculate the opportunity cost of unoccupied cells.
Opportunity Cost = Cij-(Ui+Vj)

P1-D2 30- (17-13)= 26

P1-D3 50- (17-8)= 41
P2-D1 70- (48 + 3)= 19
P2-D4 60- (48 + 0)= 12
P3-D1 40- (25 + 3)= 12
P3-D3 60- (25-8)= 43
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

All opportunity costs are positive hence the solution is

optimal & the Total cost is
Total Cost = 20*5 + 17*2 + 35*3 + 40*7 +12*5 +
25*13
= 100 + 34 + 105 + 280 + 60 + 325
= 904

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Solution by Vogel’s Approximation Method (VAM)- First calculate the Penalty of each row &
each column.
Penalty is the difference of two least values in each row and each column.

D1 D2 D3 D4 Supply
P1 20 30 50 17 7
P2 70 35 40 60 10
P3 40 12 60 25 18
Demand 5 8 7 15

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research
D1 D2 D3 D4 Supply Penalty

5
P1 20 30 50 17 7 3

P2 70 35 40 60 10 5

P3 40 12 60 25 18 13

Demand 5 8 7 15

Penalty 20 18 10 8

20 is the highest penalty in Column D1, hence first assignment is given in this column at least cost, which is
20 & assigned 5 units. Again fresh penalties are calculated.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply Penalties

5
P1 20 30 50 17 7 3 13

P2 70 35 40 60 10 5 5

P3 40 8 12 60 25 18 13 13

Demand
5 8 7 15
Penalties
20 18 10 8

18 10 8

18 is the highest penalty in Column D2 and 12 is the least cost in this

column, which is assigned 8 units. Penalties are calculated again.
Unit 3 Transportation Problem Centre for Distance and Online Education
 D1 D2 D3 D4 Supply Penalties

5
P1 20 30 50 17 7 3 13 33

P2 70 35 40 60 10 5 5 20

P3 40 8 12 60 10 25 18 13 13 35
Demand 5 8 7 15

Penalties 20 18 10 8

18 10 8

10 8

35 is the highest penalty in row P3 and 25 is the least cost in this row, which is
assigned 10 units. Calculate Penalties again.
 D1 D2 D3 D4 Supply Penalties

5 2
P1 20 30 50 17 7 3 13 33 33

P2 70 35 40 60 10 5 5 20 20

8 10 13 13 35
P3 40 12 60 25 18
Demand
5 8 7 15
Penalties
20 18 10 8

18 10 8

10 8

10 43

43 is the highest penalty in column D4 and 17 is the least cost in this column, which is assigned
2 units. Calculate Penalties again.
 D1 D2 D3 D4 Supply Penalties

5 2
P1 20 30 50 17 7 3 13 33 33
20
3 5 5 20 20
P2 70 35 40 60 10

8 10
13 13 35
P3 40 12 60 25 18
Demand
5 8 7 15
Penalties
20 18 10 8

18 10 8

10 8

10 43

40 60

60 is the highest penalty in column D4 & least cost is also 60 assign 3 units. Calculate
penalties again
 D1 D2 D3 D4 Supply Penalties

5 2 3 13 33 33
P1 20 30 50 17 7
7 3 5 5 20 20 20 40
P2 70 35 40 60 10
8 10 13 13 35
P3 40 12 60 25 18

Demand 5 8 7 15

Penalties 20 18 10 8

18 10 8
10 8
10 43
40 60
40

40 is the last penalty, which is assigned 7 units.

6 0 isth eh ig h estp en a lty in co lu m n D 4 a n d 6 0 isth ela stco stin th isco lu m n ,w h ich isa sig n ed 3 u n its.C a lcu la teP en a ltiesa g a in .
Subject Name: Operation Research

Total Cost = 20*5 + 12*8 +40*7 + 17*2 +

60*3 + 25*10
= 940

NWC 1085
LCM 985
VAM 940
Optimal Answer is 904

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Feasibility Test-
m+n-1 = No. of Occupied Cells
Where m=No. of Rows & n= No. of columns

3+ 4 -1=6 = no. of occupied cells.

Solution is Feasible.

Apply optimality test –MODI Method

Stepping Stone Method

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research
D1 D2 D3 D4 Supply Ui

5 2
P1 20 30 50 17 7 U1=17

7 3
P2 70 35 40 60 10 U2=60

8 10
P3 40 12 60 25 18 U3=25

Demand 5 8 7 15

Vj V1= 3 V2= -13 V3= -20 V4 = 0

For Optimality Test first calculate Ui & Vj

Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

Optimality Test

Calculate the opportunity cost of unoccupied cells.

Opportunity Cost = Cij-(Ui+Vj)

P1-D2 30-(17-13)=26
P1-D3 50-(17-20)=53
P2-D1 70-(60+3) =7
P2-D2 35-(60-13)=-12
P3-D1 40-(25+3) =12
P3-D3 60-(25-20)=55
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

A solution to be optimal all the opportunity costs should be zero or positive but here one cell
(P2-D2) has negative opportunity cost hence solution is not optimal. It implies that this cell
needs assignment.
To give assignment to cell P2-D2, find a closed loop with other occupied cells.
There are three conditions of the loop.
1. it should be a closed loop.
2. loop should be formed with horizontal and vertical lines, the no. of lines should be even i.e
4, 6, 8.
3. all the corner points of that loop should be occupied cells.
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

D1 D2 D3 D4 Supply

5 2
P1 20 30 50 17 7 U1=

7 3
P2 70 35 + 40 60 - 10 U2=

8 10
P3 40 12 - 60 25 + 18 U3=

Demand 5 8 7 15

V1= V2= V3= V4 =

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Now assign +ive sign to cell P2-D2, then assign alternatively –ive to the next
corner then +ive & so on.
Compare the units allotted at the places where we have assigned –ive signs.

There are two places which have been assigned –ive signs. The units allotted at
these places are 8 & 3.

As 3 is the least units, deduct 3 units from both –ive places & add 3 units to both
the places where we have assigned +ive sign.

Note-if units are different at both the –ive places , we select the least no. of units
for deduction & addition.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

D1 D2 D3 D4 Supply

5 2
P1 20 30 50 17 7 U1=17

3 7
P2 70 35 40 60 10 U2=48

5 13
P3 40 12 60 25 18 U3=25

Demand 5 8 7 15

V1= 3 V2= -13 V3= -8 V4 =0

Again Ui & Vj are calculated to apply optimality test.

Unit 3 Transportation Problem Centre for Distance and Online Education

Subject Name: Operation Research

Optimality Test

Calculate the opportunity cost of

unoccupied cells.
Opportunity Cost = Cij-(Ui+Vj)

P1-D2 30- (17-13)= 26

P1-D3 50- (17-8)= 41
P2-D1 70- (48+3)= 19
P2-D4 60- (48+0)= 12
P3-D1 40- (25+3)= 12
P3-D3 60- (25-8)= 43
Unit 3 Transportation Problem Centre for Distance and Online Education
Subject Name: Operation Research

All opportunity costs are positive hence the solution is

optimal & the Total cost is

Total Cost = 20*5 + 17*2 + 35*3 + 40*7 +

12*5 +25*13

= 904

Unit 3 Transportation Problem Centre for Distance and Online Education