TRANSPORTATION MODEL

DR. REKHA PRASAD

MATHEMATICAL FORMULATION

Minimize (Total Cost) = c
ij
x
ij

subject to the constraint
x
ij
=a
i
, i = 1,2,3,........,m(supply constraint)
x
ij
=b
j
,j= 1,2,3,........,n(demand constraint)
x
ij
0 for all i and j
PROBLEM 1
Mr. I. M. Contractor is builder and owner of Ashiana Construction Company.
Currently, he has three large housing projects in hand. They are located at
Andheri, Bandra, and Chinchwad. His engineers have worked out the
requirement of cement at each site.
Mr. Contactor requires 70 tons of cement at Andheri, 90 tons at Bandra, and 180
tons at Chinchwad.
He procures cement from four plants located Dumdum, Ellora, Feroza, and Guna.
The plant at Dumdum can supply 50 tons of cement within the timeframe
stipulated by him. The plants at Ellora, Feroza, and Guna can similarly supply 80,
70, and 140 tons.
Mr. Contractor has the option of transporting cement from any plant to any
project site. Cement is purchased from all plants at the same price bur since the
distances from each plant vary of different sites , transportation costs per ton of
cement from any plant to any project site are different. Mr. Contractor collected
data on transportation costs, which is shown in the next table. (All costs are in
thousands of rupees per ton of cement).
CONT...

Andheri Bandra Chinchwad
Dumdum 2 7 4
Ellora 3 3 1
Feroza 5 4 7
Guna 1 6 2
SOLUTION 1
From the information given we can draw the following graph.







There are three different methods of finding the basic feasible solution:
a) North West Corner Method
b) Least Cosy Method
c) Vogels Approximation method

A B C Supply
D 2 7 4 50
E 3 3 1 80
F 5 4 7 70
G 1 6 2 140
Demand 70 90 180 340
CONT...
a) North West Corner Method




Total Cost = 2x50 + 3x20 + 3x60 + 4x30 + 7x40
+ 2x140 = 1020

A B C Supply
D 2 7 4 50
E 3 3 1 80
F 5 4 7 70
G 1 6 2 140
Demand 70 90 180 340
50
20 60
30
40
140
CONT...
b) Least Cost Method




Total Cost = 7x20 + 4x30 + 1x80 + 4x70 +
1x70 + 2x70 = 830


A B C Supply
D 2 7 4 50
E 3 3 1 80
F 5 4 7 70
G 1 6 2 140
Demand 70 90 180 340
70 30
80
70
70
70
CONT...
c) Vogels Approximation Method

A B C SUPPLY PENALTY
D 2 30 7 20 4 50 2 2 2 2 2
E 3 3 1 80 80 2 - - - -
F 5 4 70 7 70 1 1 1 -
G 1 40 6 2 100 140 1 1 5 - -
DEMAND 70 90 180 340
PENALTY 1
1
3
3
1
2
3
3

2
2
-
-
CONT...
TC = 2X30 + 7X20 + 1X80 + 4X70 + 1X70 + 2X100
= 800
v
1
= 2 v
2
= 7 v
3
= 3



u
1
= 0


u
2
= -2

u
3
= -3

u
4
= -1





A B C SUPPLY
D 2 30+ 7 20- 4 50
E 3 3 + 1 80- 80
F 5 4 70 7 70
G 1 40- 6 2 100+ 140
DEMAND 70 90 180 340
CONT...
Occupied Cells:
v
1
+ u
1
= 2 Let u
1
= 0 Therefore v
1
= 2
v
2
+ u
1
= 7 v
2
= 7
v
3
+ u
2
= 1 3 + u
2
=
1
therefore u
2
= -2
v
2
+ u
3
= 4 7 + u
3
= 4 Therefore u
3
= -3
v
1
+ u
4
= 1 2 + u
4
= 1 Therefore u
4
= -1
v
3
+ u
4
= 2 v
3
1 = 2 therefore v
3
= 3
UNOCCUPIED CELLS
2 + 2 -4 = -2
2 + 2 -3 = -3
7 2 - 3 = 2*
2 -3 - 5 = 0
3 3 -7 = -7
7 -1 - 6 = 0
CONT...
30 +
20 -

80 -
40 -
100 -
The value of which satisfies all the
situations will be 20 and the next
iteration of the table will be
CONT...
The redistributed situation will be:




Total Cost = 760

A B C SUPPLY
D 2 50 7 4 50
E 3 3 20 1 60 80
F 5 4 70 7 70
G 1 20 6 2 120 140
DEMAND 70 90 180 340
CONT...
Occupied Cells:
u
1
+ v
1
= 2 Let v
1
= 0 u
1
= 2
u
2
+ v
2
= 3 0 + v
2
= 3 v
2
= 3
u
2
+ v
3
= 1 u
2
+ 1 = 1 u
2
= 0
u
3
+ v
2
= 4 u
3
+ 3 = 4 u
3
= 1
u
4
+ v
1
= 1 u
4
= 1
u
4
+ v
3
= 2 1 + v
3
= 2 v
3
= 1
UNOCCUPIED CELLS
2 + 3 - 7 = -2
2 + 1 - 4 = -1
0 + 0 3 = -3
1 + 0 5 = -4
1 + 1 -7 = -5
1 + 3 -6 = -2
STEPS FOR MODIFIED DISTRIBUTION
METHOD (MODI)
Step 1:Set up a feasible solution by North West corner rule, Least Cost Method or VAM.
Step 2: Assign a value of zero to any u
i
or v
j
. Calculate the remaining u
i
and v
j
values from the
relationship that for all occupied cells
C
ij
= u
i
+ v
j

Step 3: Calculate the opportunity costs of all unoccupied cells from the relationship: Opportunity cost
= u
i
+ v
j
C
ij

Step 4: If the opportunity cost of all unoccupied cells is zero or negative, an optimal solution has
been reached.
Step 5: In case cells have positive opportunity costs, select the cell with the maximum positive
opportunity cost. Starting from the selected cell and moving only along horizontal or vertical
lines, trace a closed path back to this cell, such that all the corners of the closed path are
occupied cells. Beginning with a positive sign in this cell, assign positive and negative signs
alternately to the corners of the closed path.
Step 6: Determine the smallest quantity in a negative position on the closed path. Add this quantity
to all corner cells with a positive sign on the closed path, and subtract it from all cells with a
negative sign on the closed path. This gives us an improved solution. Go to step 2.
THE UNBALANCED CASE
If the supply and demand or availability and
requirements are unequal, we make the
supply and demand equal by the introduction
of either a dummy destination, if the supply is
larger or a dummy source if the demand is
larger. The difference is allocated to this
dummy. The cost of moving units from the
dummy to any source or from sources to a
dummy to a dummy location is zero as no
movement actually takes place
CONT...
Consider the following transportation
problem:

A B C SUPPLY
1 2 7 4 50
2 3 3 1 80
3 5 4 7 70
4 1 6 2 140
DEMAND 90 90 180
CONT...
A dummy origin is added to the problem having zero
transportation cost in those routes. The difference in supply
and demand is produced by the dummy factory and then the
problem is solved in the usual way.

A B C SUPPLY
1 2 7 4 50
2 3 3 1 80
3 5 4 7 70
4 1 6 2 140
DUMMY 0 0 0 20
DEMAND 90 90 180 360
CONT...
The solution using VAM is given by the following
table:
TC = 2x50 + 1x80 + 4x70 + 1x40 + 2x100 + 0x20
= 700
A B C SUPPLY
1 2 50 7 4 50
2 3 3 1 80 80
3 5 4 70

7 70
4 1 40 6 2 100 140
DUMMY 0 0 20 0 20
DEMAND 90 90 180 360
CHECKING THE OPTIMALITY
According to MODI this is the optimal
solution.