TRANSPORTATION AND ASSIGNMENT PROBLEMS

TRANSPORTATION
Definition: the transportation deals with the distribution of goods from several points of supply (sources/origins) to a number of points of demand (destinations) in way that minimizes the total cost. Transportation and assignment problems belong to special class of linear programming called Network flow problems. The usual objective in a transportation problem is to minimize the cost of shipping goods from sources to the destinations.

Example of a network of the transportation problem

Factories (Sources/Origins)

Warehouses (Destinations)

Nata 200 units Francistown 5 8 6 Maun 4 7 300 units

100 units

200 units

Gaborone
7 Orapa 200 units

Capacities

Shipping Routes

Requirements

The circles are known as nodes and the lines connecting nodes are called arcs. Each origin and destination is represented by a node and each possible shipping route is represented by an arc. The amount of supply written next to each origin node, and the amount of the demand is written next to each destination. All arcs go from a source to a destination. There is a cost per unit on each arc. 1

SOME TERMS IN TRANSPORTATION PROBLEMS

Arcs - the lines connecting the nodes in a network. Network a graphical representation of a problem consisting of numbered circles (nodes) interconnected by series of lines (arcs). Arrowheads on the arcs show the direction of the flow. Destination a location with a demand for material in a transportation problem. Origin a source of material in a transportation problem. Cell the rectangle in a transportation tableau used to identify the route between an origin and destination. Dummy origin an imaginary source added when total demand is greater than total supply. The supply at the dummy source is set so that total demand and supply are equal. The transportation cost for dummy source cells is zero. Dummy destination an imaginary destination added when total supply is greater than total demand. The demand at the dummy destination is set so that total supply and demand are equal. The transportation cost for the dummy destination cell is zero.

Methods of solving transportation problems

1) The Northwest corner rule (NWC) The Northwest corner rule requires that we start in the upper-left-hand cell (or northwest corner) of the table and allocate units to shipping routes as follows: (i) (ii) Exhaust the supply at each row before moving down to the next row. Exhaust the requirements (demands) of each column before moving to the right to the next column. Check that all supply and demands are met.

(iii)

2) The least-cost method First determine the least-cost cell in the transportation table and allocate the maximum quantity to that particular route. Then seek the second lowest-cost cell, allocate the maximum possible quantity to that route and so on until all the production output had been allocated.

3) MODI method The MODI (modified distribution) method allows us to compute improvement indices quickly for each unused square without drawing all of the closed paths. Because of this, it can often provide considerate time savings over the stepping-stone method for solving transportation problems. The index for any cell is simply the difference between the actual per-unit shipping cost and the cost savings (the opportunity cost of not using that route). MODI provides a new means of finding the unused route with the largest negative improvement index. Each negative index represents the amount by which total transportation costs be decreased if 1 unit or product were shipped on that route. Once the largest index is identified, we are required to trace only one closed path. This path helps determine the maximum number of units that can be shipped via the unused route. How to Use the MODI Method In applying the MODI method, we begin with an initial solution obtained by using the northwest corner rule or any other rule. But now we must compute a value for each row (call the values R1, R2, R3 if there are three rows) and for each column (K1, K2, K3) in the transportation table. In general, we let Ri = value assigned to row i Kj = value assigned to column j Cij = cost in square ij (cost of shipping from source i to destination j) The MODI method then requires five steps: 1. To compute the values for each row and column, set Ri + Kj = Cij but only those squares that are currently used or occupied. For example, if the square at the intersection of row 2 and column 1 is occupied, we set R2 + K1 = C21. 2. After all equations have been written, set R1 = 0. 3. Solve the system of equations for all R and K values. 4. Compute the improvement index for each unused square by the formula improvement index (Iij) = Cij Ri Kj.

5. Select the largest negative index and proceed to solve the problem until no empty cell shows a negative improvement index. This is the optimal solution. If one of the improvement indices is negative, the solution is not optimal. It is necessary to trace only the closed path in order to proceed with the solution procedures. A path can go through any box but can only turn at a box or cell that is occupied. The steps we follow to develop an improved solution after the improvement indices have been computed are outlined briefly: (i) (ii) (iii) Beginning at the square with the best improvement index, trace a closed path back to the original square via squares that are currently being used. Beginning with a plus (+) sign at the unused square, place alternate minus () and plus signs on each corner square of the closed path just traced. Select the smallest quantity found in those squares containing minus signs. Add that number to all squares on the closed path with plus signs; subtract the number from all squares assigned minus signs. Compute new improvement indices for this new solution using the MODI method.

(iv)

An Example of a Transportation problem The management of Camphill Furniture Botswana LTD delivers desks from three plants in Mahalapye, Gaborone and Francistown with supply capacity of 300, 150 and 250 desks respectively, to three markets. The requirements for the markets: Mochudi, Palapye and Gantsi are 200, 200 and 300 desks respectively. The transportation costs per desk from each plant to each market is known and shown below. TO FROM 5 Mahalapye 8 Gaborone 9 Francistown DEMAND Required: 1. Draw the transportation network for Camphill. 2. Identify an initial solution using (i) The northwest corner method (ii) The least-cost method 200 200 300 700 7 7 250 3 4 150 4 3 300 Mochudi Palapye Gantsi SUPPLY

3. Find the final optimal solution using the MODI method based on your northwest initial solution showing every step.

SPECIAL CASES OF TRANSPORTATION PROBLEMS

1. Unbalanced Supply and Demand In our example, we have seen a transportation problem where supply equals demand. In most real-world situations, however, this condition is not realized, and either supply exceeds demand or demand exceeds supply. Since our transportation method required that supply = demand, we must make some adjustments to the solution procedure to allow for the unequal case as explained below.

(i)

When supply exceeds demand, add a dummy column that will fictitiously receive the excess supply. To facilitate the computation, we assign a unit transportation cost of zero to all cells in the dummy column. Then the normal procedure will be followed to solve the problem. When demand exceeds supply, add a dummy row that will fictitiously supply the excess demand. The unit transportation cost will be zero. The total supply for the dummy row will be the amount of excess demand.

(ii)

2. Degeneracy Degeneracy occurs when the number of occupied squares or routes in a transportation table solution is less than the number of rows plus the number of columns minus 1. (That is M + N 1 allocations, where M is the number of columns and N is the number of rows). Such a situation may arise in the initial solution or in any subsequent solution. Degeneracy requires a special procedure to correct the problem. Without enough occupied squares to trace a closed path for each unused route, it would be impossible to apply the stepping-stone method or to calculate the R and K values needed for the MODI technique.

To handle degenerate problems, we create an artificially occupied cell that is we place a zero (representing a fake shipment) in one of the unused squares and then treat that square as if it were occupied. The square chosen must be in such a position as to 5

allow all stepping-stone paths to be closed, although there is usually a good deal of flexibility in selecting the unused square that will receive the zero.

3. Prohibited routes If we have a transportation route from an origin to a destination that for some reason cannot be used, we simply assign this route a value of M, and thus this route will not enter the solution. M shows the high cost and risk of using that route.

4. Maximization of an objective The transportation model can also be used to solve problems involving maximization of an objective. The only modification is our solution procedure necessary for problems of this type is in selection of an unoccupied cell to which units will be allocated. Instead of picking the cell with the most negative value, we pick the cell with largest value that is we pick the cell, which will cause the largest per unit increase in the objective function. Negative improvement index in transportation maximization problems would imply that the profit would be reduced by that per unit number and therefore not a desirable situation (unlike in minimization problems where they will be desirable because they drive costs down).

THE ASSIGNMENT MODEL

The assignment problem refers to the class of LP problems that involve determining the most efficient assignment of people to projects, salespeople to territories, contracts to bidders, jobs to machines, and so on. The objective is most often to minimize total costs or total time of performing the tasks at hand. One important characteristic of assignment problems is that only one job or worker is assigned to one machine or project.

The Hungarian Method (Floods Technique)

The Hungarian method of assignment provides us with an efficient means of finding the optimal solution without having to make a direct comparison of every option. It operates on a principle of matrix reduction, 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 any person to a project as opposed to making the best or least-cost assignment. If we can reduce the matrix to the point where there is one zero element in each row and column, it will then be possible to make optimal assignments, that is, assignments in which all of the opportunity costs are zero.

Three steps of the assignment Method

1) Find the opportunity cost table by a) Subtracting the smallest number in each row of the original cost table or matrix from every number in that row. b) Then subtracting the smallest number in each column of the table obtained in part (a) from every number in that column. 2) Test the table resulting from step 1 to see whether an optimal assignment can be made. The procedure is to draw the minimum number of vertical and horizontal straight lines necessary to cover all zeroes in the table. 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, we proceed to step 3. 3) Revise the present opportunity cost table. This is done by subtracting the smallest number not covered by a line from every other uncovered number. This same smallest number is

also added to any number(s) lying at the intersection of horizontal and vertical lines. We then return to step 2 and continue the cycle until an optimal assignment is possible.

Optimal solution Optimal solution is at zero locations. Systematically make final assignments. a) Check each row and column for unique zero, and make the first assignment at that intersection. b) Eliminate that row and column and search for another unique zero. Make that assignment and proceed in a like manner.

Example

The Fix-It shop, has just received three new rush projects to repair: (1) a radio, (2) a toaster oven, and (3) a broken coffee table. Three repair persons, each with different talents and abilities, are available to do the jobs. The Fix-It shop owner estimates what it will cost in wages to assign each of the workers to each of the three projects. The costs, which are shown in the table below, differ because the owner believes that each worker will differ in speed and skill on these varied jobs. The owners objective is to assign the three projects to the workers in a way that will result in the lowest total cost to the shop. Note that the assignment of people to projects must be on a one-to-one basis; each project will be assigned exclusively to one worker only. Hence the number of rows must always equal the number of columns in an assignment problems cost table. PROJECT 2 P140 P100 P120

PERSON Adams Brown Cooper SOLUTION Step 1(a) PERSON Adams Brown Cooper 1 50 0 20

1 P110 P80 P90

3 P60 P110 P70

PROJECT 2 80 20 50

3 0 30 0

(60) (80) (70)

Step 1(b) PERSON Adams Brown Cooper 1 50 0 20 (0) PROJECT 2 60 0 30 (20) 3 0 30 0 (0)

Step 2 PERSON Adams Brown Cooper 1 50 0 20 PROJECT 2 60 0 30 3 0 30 0

Covering line 1

Covering line 2

Not Optimal (No. of Lines < No. of Rows or Columns) Proceed to step 3.

Step 3 PERSON Adams Brown Cooper 1 30 0 0 1 Optimal (No. of Lines = No. of Rows or Columns) Final assignment ASSIGNMENT Adams to project 3 Brown to project 2 Cooper to project 1 Total cost Cost (P) 60 100 90 250 PROJECT 2 40 0 10 3 0 50 0 2

The total labour costs of this assignment are computed from the original cost table.

SPECIAL CASES IN ASSIGNMENT PROBLEMS

1. Unequal Assignments (Unbalanced demand and supply) We have conveniently assumed so far that the number of resources available exactly matches the number of tasks to be completed. Frequently this will not be the case. We may have more resources than required to complete a set of given tasks and part of the solution will require us to determine which resource(s) will not be required. Similarly, we may face more tasks than can be completed with the available resources and we seek to determine which task must remain uncompleted. We can deal with such unequal assignments through the use of dummy rows or columns (exactly as we did in the transportation model). This creates a table of equal dimensions and allows us to solve the problem as before. Since the dummy task or person is really non-existent, it is reasonable to enter zeros in its row or column as the cost or time estimate.

2. Prohibited(unacceptable) and priority assignments Equally, there will be applications of the assignment model where we wish to incorporate either priority or prohibited assignments: assignments which must be made no matter what cost, and assignments which must not be made regardless of the effect on cost. Priority routes are easily dealt with, given the structure of the assignment model. If we insist on a particular resource-task assignment being made then the appropriate row and column representing the resource and task are simply removed from the opportunity cost table and the remaining assignments are then determined through the normal Hungarian method. Prohibited are dealt with through the use of penalty costs, as was the case in transportation model.

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