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Transportation Problem

Transportation Problem : special kind of LPP where goods are transported from a set
of sources to a set of destinations

Objective : minimizing the total transportation cost

Source Destination Commodity


Plants Markets Finished goods
Plants Fin goods Finished goods
(FG)Warehouses
FG warehouses Markets Finished goods
Suppliers Plants Raw materials
Raw material Plants Raw materials
warehouses
Let

m be the number of sources,

n be the no of destinations

ai be the supply at the source i

bj be the demand at the destination j

Cij be the unit transportation cost/unit from source i to destination j


The transportation problem shown below has 3 sources & 3 destinations

1 2 3
Supply

Destination
1 20 10 15 200
Source 2 10 12 9 300
3 25 30 18 500

Demand 200 400 400


Types of transportation problem

a) Balanced Transportation problem


b) Unbalanced Transportation problem

a) Balanced Transportation problem

Where the sum of supplies of all sources is equal to the sum of demands of all
destinations

b) Unbalanced Transportation problem

Where the sum of supplies of all sources is not equal to the sum of demands of all
destinations
Convert the following transportation problem into a balanced transportation problem

1 2 3
Supply Here total demand is < total
supply. Hence unbalanced.
Destination Solved by introducing a
1 30 50 15 300 dummy destination

Source 2 35 70 20 200
3 20 45 60 500

Demand 300 200 400 900/1000

1 2 3 4
Supply
Destination
1 30 50 15 0 300
2 35 70 20 0 200
3 20 45 60 0 500

Demand 300 200 400 100 1000/1000


Convert the following transportation problem into a balanced transportation problem

1 2 3 4 Here total demand is> total


Supply supply. Hence unbalanced.
Destination Solved by introducing a
1 5 12 6 10 300 dummy source
Source 2 7 8 10 3 400
3 9 4 9 2 300
Demand 200 300 450 250 1200/1000

1 2 3 4
Destination Supply
1 5 12 6 10 300
Source 2 7 8 10 3 400
3 9 4 9 2 300
4 0 0 0 0 200

200 300 450 250 1200/1200


Methods to solve the Transportation Problem
1. Finding the Initial Basic feasible solution(IBFS)
2. Optimizing the IBFS obtained in step 1

Techniques of finding the IBFS


•North West Corner method(NWCM)
•Least cost cell method
•Vogel’s approximation method/penalty method
Algorithm for NWCM

1. Find the min of supply & demand w.r.t current NWC cell of cost matrix
2. Allot this minimum value to current NWC cell & subtract this min from supply/demand values
3. Check if any row/column has zero supply/demand.if so,go to step 4
4. Delete the row/column with zero supply/demand & go to step 5
5. Delete both row/column
6. Check if exactly one row/column is left out.If yes,go to step 7
7. Match supply/demand with remaining demands/supplies of undeleted rows/columns
8. Go to phase 2(optimising the soln)
Solve the following transportation problem using the NWCM

1 2 3 4
Destination Supply
1 3 1 7 4 300
Source 2 2 6 5 9 400
3 8 3 3 2 500
Demand 250 350 400 200 1200

Cell 1,1 is the NWC where s=300,d=250.Min is 250.hence allocate 250 for 1,1
Since supply to destination 1 is fully met,it is deleted

1 2 3 4
2 3 4
Destination Supply
Destination
1 3(250) 1 7 4 300
1 1 7 4 50
2 2 6 5 9 400
2 6 5 9 400
3 8 3 3 2 500 3 3 3 2 500
250 350 400 200 1200 350 400 200
2 3 4 2 3 4
Destination Destination
1 1 7 4 50 0
1 1(50) 7 4
2 6 5 9 400 2 6 5 9 400
3 3 3 2 500 3 3 3 2 500
350 400 200 300 400 200

2 3 4 3 4
Destination
3 3(300) 2(200) 500
2 6(300) 5 9 100 2 5(100) 9 0
0 0
3 3 3 2 500 3 3 2 500
300 200
0 400 200
1 2 3 4
Destination Supply
1 3(250) 1(50) 7 4 300
2 2 6(300) 5(100) 9 400
3 8 3 3(300) 2(200)
500
250 350 400 200 1200

The total cost of solution is 3x250+1x50+6x300+5x100+3x300+2x200=Rs 4400/-


Solve the following transportation problem using the NWCM

1 2 3 4
Destination Supply
1 2 2 6 3 400
2 3 5 4 8 500
3 7 4 5 1
450
250 450 400 250 1350
Least Cost Cell Method
Similar to the NWC method, but here the cell with least unit cost value is given first preference

1 2 3 4
Destination Supply
1 3 1 7 4 300
Source 2 2 6 5 9 400
3 8 3 3 2 500
Demand 250 350 400 200 1200

1 2 3 4
Destination Supply
1 3 1(300) 7 4 300
Source 2 2(250) 6(50) 5(100) 9 400
3 8 3 3(300) 2(200)
500
Demand 250 350 400 200 1200

1x300 + 2x250 + 6x50 + 5x100 + 3x300 + 2x200 = Rs 2900 / -


Solve the following transportation problem using Least cost method

1 2 3 4
Destination Supply
Supply 9 2(300) 6 3 300/0
Destination 1
1 9 2 6 3 300 2 11 5(100) 4(400) 8 500/100
2 11 5 4 8 500 3 7(200) 12(50) 10 1(200)
450/250
3 7 12 10 1 0 0 0 0(50)
450 50/0
200 450 400 250
200 450/ 400/ 250
150/ 0
50

=600+500+1600+1400+600+200=4900/-
Solve the following transportation problem using Least cost method

1 2 3 4

Supply
Destination
1 9 2 6 3 350
2 11 5 4 8 500
3 7 12 10 1
450
200 450 400 250
Vogel’s Approximation Method

1. Find row penalties(difference between 1st minimum & 2nd minimum of each row).If two
min values are equal, then row penalty is zero
2. Likewise find column penalties
3. Find the maximum of the row & column penalties. Identify if it happens in a row or
column. If max penalty is in a row ,go to step 4
4. Find cell for allocation which has least cost in that row
5. Find the minimum of demand / supply wrt selected cell & likewise complete all
allocations
1 2 3 4 Supply Penalty
1 3 1 7 4 300 2

2 2 6 5 9 400 3*
3 8 3 3 2 500 1
Demand 250 350 400 200
Penalty 1 2 2 2

1 2 3 4 Supply Penalty
1 3 1 7 4 300 2
2 2(250) 6 5 9 400 3
3 8 3 3 2 500 1
Demand 250 350 400 200
Penalty 1 2 2 2
2 3 4 Supply Penalty
1 1(300) 7 4 300 3*
2 6 5 9 150 1
3 3 3 2 500 1
Demand 50 400 200
Penalty 2 2 2

2 3 4 Supply Penalty
2 6 5 9 150 1
3 3 3 2 500 1
Demand 50 400 200
Penalty 3 2 7*

2 3 4 Supply Penalty
2 6 5 9 150 1
3 3 3 2(200) 300 1
Demand 50 400 200
Penalty 3 2 7*
2 3 Supply Penalty 250 Supply Penalty
2 6 5 150 1 2 5(150) 150 1
3 3(50) 3 300 0 3 3(250) 250 0
Demand 50 400 Demand 400
Penalty 3* 2 Penalty 2

1 2 3 4 Supply
1 3 1(300) 7 4 300

2 2(250) 6 5(150) 9 400


3 8 3(50) 3(250) 2(200) 500

Demand 250 350 400 200

1x300 + 2x250 + 5x150 + 3x50 + 3x250 + 2x200 = Rs2850/-


Solve the following by VAM

1 2 3 4 Supply
1 21 16 25 13 11

2 17 18 14 23 13
3 32 27 18 41 19
Demand 6 10 12 15

Rs 796/-
Optimizing using UV method
(also known as Modified distribution method
1. Row 1,Row 2 etc are assigned with variables U1,U2 etc & columns with V1,V2 etc
2. Check if no. of basic cells in IBFS >=(m+n-1)
3. Compute the values of U1,U2,U3 etc & V1,V2,V3 etc by applying following formula to
basic cells only, U1+V1=Cij (assuming U1=0)
4. Compute penalties for non basic cells by using formula,Pij = Ui+Vj-Cij
5. Check whether all Pij values are <=zero. If yes go to step 11,else to step 6
6. Identify non basic cell with maximum +ve penalty & term that as the new basic cell
7. Starting from the new cell, draw a closed loop containing only horizontal & vertical
lines passing through some basic cells.(change of direction of the loop should be with
90degrees only at some basic cell)
8. Starting from the new basic cell, alternatively assign +ve & -ve signs at the corners of
the closed loop
9. Find the minimum of the allocations made amongst the –ve signed cells
10. Obtain table for next iteration by doing foll steps & then go to step 2 a)add min
allocation obtained in previous step to all +ve signed cells & b)subtract min allocation
from all –ve signed cells
11. If optimality is reached,treat the present allocations to the set of basic cells as
optimum allocations
12. Stop
Apply NWC & VAM methods to find the IBFS & also find the optimal solution using UV( in Rs)

IBFS
Source Markets Source Markets
by
NW Supply Supply
CM 1 2 3 1 2 3
1 6 4 1 70 1 6(40) 4(30) 1 70
2 3 8 7 60 2 3 8(60) 7 60
3 4 4 2 90 3 4 4(25) 2(65) 90

Demand 40 115 65 Demand 40 115 65


IBFS =6x40+4x30+8x60+4x25+2x65=Rs 1070/-
No of basic cells =5. m+n-1=5. Hence condition satisfied

Source Markets U1 = 0 U1 = 0

V1 V2 V3 U1+V1 =6 V1= 6 U1+V3-1= +1


1 2 3 Supply U1+V2= 4 V2= 4 U2+V1-3 = +7
U1 1 6 4 1 70 U2+V2= 8 U2= 4 U2+V3 -7 -1
U2 2 3 8 7 60 U3+V2= 4 U3= 0 U3+V1 -4= +2
U3 3 4 4 2 90
U3+V3= 2 V3 = 2
Demand 40 115 65
Since cells (1,3),(2,1) &(3,1) have +ve values,soln is not optimal
•Highest +ve is in (2,1) with +7.
Source Markets •Trace a closed loop around with 3 occupied cells
Sup •Subtract Min allocation in (-) cells & add in (+)
1 2 3 ply Source Markets
1 6(40) (-) 4(30) (+) 1 70 Sup
1 2 3 ply
2 3 (+) 8(60) (-) 7 60
1 70
3 4 4(25) 2(65) 90 6 4(70) 1
2 3 (40) 8(20) 7 60
Demand 40 115 65 3 4 4(25) 2(65) 90

Demand 40 115 65
Source Markets U1 = 0 U1 = 0
V1 V2 V3 U1+V2 =4 V2 =4 U1+V1-6= -7
1 2 3 Supply
U2+V1= 3 V1= -1 U1+V3-1 = +1
U1 1 6 4(70) 1 70
U2+V2= 8 U2= 4 U2+V3 -7= -1
U2 2 3 (40) 8(20) 7 60
U3+V2= 4 U3= 0 U3+V1 -4= -5
U3 3 4 4(25) 2(65) 90
U3+V3= 2 V3 = 2
Demand 40 115 65
•Highest +ve is in (1,3) with +1.
•Trace a closed loop around with 3 occupied cells
•Subtract Min allocation in (-) cells & add in (+)
IBFS =4x70+3x40+8x20+4x25+2x65=Rs 790/-
Source Markets
Source Markets
V1 V2 V3
V1 V2 V3 Sup
1 2 3 Supply 1 2 3 ply
U1 1 6 4(70) (-) 1 (+) 70
U1 1 6 4(70) 1 70
U2 2 3 (40) 8(20) 7 60
U2 2 3 (40) 8(20) 7 60
U3 3 4 4(25) 2(65) 90 U3 3 4 4(25) (+) 2(65) (-) 90

Demand 40 115 65 Demand 40 115 65

Source Markets U1 = 0 U1 = 0

V1 V2 V3 U1+V2 =4 V2 =4 U1+V1-6= -7
1 2 3 Supply U1+V3 =1 V3 =1 U2+V3-7 = -2
U1 1 6 4(5) 1 (65) 70 U2+V1= 3 V1= -1 U3+V1 -4= -5
U2 2 3 (40) 8(20) 7 60
U2+V2= 8 U2= 4 U3+V3 -2= -1
U3 3 4 4(90) 2 90
U3+V2= 4 U3= 0
Demand 40 115 65

Opportunity cost of all non basic cells is – ve & hence the current solution is optimal.
Optimal cost= Rs(4x5+1x65+3x40+8x20+4x90)= Rs 725/-
Source Markets

IBFS by Supply
1 2 3
VAM 70
1 6 4 1
2 3 8 7 60
3 4 4 2 90

Demand 40 115 65

Source Markets
1 2 3
1 6 4(5) 1(65) 70 70 5 3 3
No of basic cells =5
2 3(40) 8(20) 7 60 20 20 4 1
m+n-1=5. Condition satisfied
3 4 4(90) 2 90 90 90 2 2
40 115 65
IBFS =4x5+1x65 +3x40+8x20+4x90=Rs 725/-
115 65
1 0 1
0 1 Basic Cells : (1,2) (1,3) (2,1) (2,2)(3,2)
Non Basic cells : (1,1) (2,3) (3,1) (3,3)
UV Method
Basic Cells : (1,2) (1,3) (2,1) (2,2)(3,2)
Source Markets Non Basic cells : (1,1) (2,3) (3,1) (3,3)
V1 V2 V3
1 2 3 Supply
U1 1 6 4 1 70
U2 2 3 8 7 60
U3 3 4 4 2 90
Demand 40 115 65
Opportunity cost of non basic cells is relative to the transportation cost of basic cells
Basic Cells Non Basic Cells
Taking U1 = 0
V2= 4
U1+V1-6= -7
U1+V2= 4
U2+V3-7= -2
U1+V3= 1 V3= 1
U2+V1= 3 V1= -1 U3+V1-4 = -5

U2+V2= 8 U2= 4 U3+V3-2=-1

U3+V2= 4 U3 = 0
•Opportunity cost of all non basic cells is – ve
U1 = 0 V1= -1 •Since all the unoccupied(non-basic cells) values are –ve,
U2 = 4 V2= 4 the current solution is optimal.Optimal cost = Rs 725/-
U3 = 0 V3= 1
For the problem given below find the IBFS using NWCM & optimize the
solution using UV method

D1 D2 D3 Supply
S1 6 4 1 50

S2 3 8 7 40
S3 4 4 2 60
Demand 20 95 35

D1 D2 D3 Supply
S1 6(20) 4(30) 1 50

S2 3 8(40) 7 40
S3 4 4 (25) 2 (35) 60
Demand 20 95 35

6x20 + 4x30 + 8x40 + 4x25 + 2x35 = Rs 730/-


V1=6 V2=4 V3=2 Supply
U1=0 P13 = 0+2-1=1 +VE
U1+V1=6,V1=6 U1=0 6(20) 4(30) 1 50 P21 = 4+6-3=7 +VE
U1+V2=4,V2=4 P23 = 4+2-7=-1 -VE
U2=4 3 8(40) 7 40
U2+V2=8,U2=4 P31 = 0+6-4= 2 +VE
U3+V2=4,U3=0 U3=0 4 4 (25) 2 (35) 60
U3+V3=2,V3=2 Demand 20 95 35

V1=6 V2=4 V3=2 Supply


U1=0 6(20) 4(30) 1 + 50

U2=4 3 + 8(40) 7 - 40
U3=0 4 + 4 (25) 2 (35) 60
Demand 20 95 35

V1=6 V2=4 V3=2 Supply


U1=0 6(20) 4(30) 1 + 50

U2=4 3 + 8(40) 7 - 40
U3=0 4 + 4 (25) 2 (35) 60
Demand 20 95 35
V1=6 V2=4 V3=2 Supply
U1=0 P13 = 0+2-1=1 +VE
U1+V1=6,V1=6 U1=0 6(20)- 4(50)+ 1 + 50
P21 = 4+6-3=7 +VE
U1+V2=4,V2=4 P23 = 4+2-7=-1 -VE
U2=4 3 + 8(40)- 7 - 40
U2+V2=8,U2=4 P31 = 0+6-4= 2 +VE
U3+V2=4,U3=0 U3=0 4 + 4 (25) 2 (35) 60
U3+V3=2,V3=2 Demand 20 95 35

V1=-1 V2=4 V3=2 S


U1=0
U1=0 6 4(15) 1 (35) 50 P11=0-1-6=-7 -VE
U1+V2=4,V2=4
P13 = 0+2-1=1 +VE
U2+V1=3,V1=-1 U2=4 3 (20) 8(20) 7 40
P23 = 4+2-7=-1 -VE
U2+V2=8,U2=4 4 4 (60) 2
U3=0 60 P31 = 0-1-4= -5 -VE
U3+V2=4,U3=0
U3+V3=2,V3=2 D 20 95 35

V1=-1 V2=4 V3=1 S


U1=0 P11=0-1-6= -7 -VE
U1=0 6 4(15) 1 (35) 50 P23 = 4+1-7=-2 -VE
U1+V2=4,V2=4
U1+V3=1,V3=1 U2=4 3 (20) 8(20) 7 40 P31 = 0-1-4=-5 -VE
U2+V1=3,V1=-1 4 4 (60) 2
P33 = 0-1-2= -1 -VE
U3=0 60
U2+V2=8,U2=4
D 20 95 35
U3+V2=4,U3=0
Optimal cost = Rs(4x15+1x35+3x20+8x20+4x60)= Rs 555/-
Apply NWCM for IBFS & then UV method for optimal solution

1 2 3 4
Destination Supply
1 3(250) 1(50) 7 4 300
2 2 6(300) 5(100) 9 400
3 8 3 3(300) 2(200)
500
250 350 400 200 1200

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