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# THE TRANSPORTATION PROBLEM

MODULE II

## Sensitivity analysis ; allocation problems Assignment and distribution problems

THE TRANSPORTATION MODEL The transportation model is a special class of LPPs that deals with transporting(shipping) a commodity from sources (e.g. factories) to destinations(e.g. warehouses). The objective is to determine the transportation schedule that minimizes the total transportation cost while satisfying supply and demand limits. We assume that the transportation cost is proportional to the number of units transported on a given route.

We assume that there are m sources 1,2, , m and n destinations 1, 2, , n. The cost of transporting one unit from Source i to Destination j is cij. We assume that the availability(supply) at source i is ai (i=1, 2, , m) and the demand at the destination j is bj (j=1, 2, , n). We make an important assumption: the problem is a balanced one. That is
m i i !1 n j j !1

a ! b

## That is, total availability equals total demand.

We can always meet this condition by introducing a dummy source (if the total demand is more than the total supply) or a dummy destination (if the total supply is more than the total demand). Let xij be the amount of commodity to be shipped from the source i to the destination j.

## Thus the problem becomes the LPP

m n

Minimize subject to

z!
i !1
n

c
j !1

ij

xij

x
j !1 m i !1

ij

! ai (i ! 1,2,..., m) ! b j ( j ! 1,2,..., n)

ij

xij u 0

Though we can solve the above LPP by Simplex method, we solve it by a special algorithm called the transportation algorithm. We present the data in an mvn tableau called the transportation matrix or the cost effectiveness matrix shown below.

1 S o u r c e 1 2 . . m Demand
xm1
Cm1

Destination 2 .
x12
C11

.
x1n

n Supply
C1n

x11 x21
C21

c12 x22
C22

a1 a2

x2n
C2n

xm2
Cm2

xmn
Cmn

am

b1

b2

bn

## BASIC ASSUMPTIONS IN THE TRANSPORTATION PROBLEM

1.

2.

3.

The availability of the commodity at each source and the amount of demand at each destination is finite and known. The unit transportation cost of the commodity from each source to each destination is certain (finite) and known. The unit transportation cost is independent of the quantity transported.

## OBJECTIVE OF THE TRANSPORTATION MODEL

To determine the amount of the commodity to be shifted from each source to each destination such that the total transportation cost is minimised and the demand at each destination (requirement centre) is met.

DEFINTIONS

A set of non-negative values (allocations) xij that satisfies the constraints (rim conditions) and also the non - negativity restrictions is called a feasible solution to the transportation problem.  A feasible solution to an m x n transportation problem that has not more than (m + n 1) non negative allocations is called a basic feasible solution to the transportation problem.  A basic feasible solution to an m x n transportation problem is said to be non degenerate if it contains exactly (m + n 1) non negative allocations in independent positions .


DEFINTIONS (contd.)

The allocations are said to be in independent positions if it is impossible to increase or decrease any allocation without either changing the position of the allocation or violating the rim conditions. That is, it is impossible to travel from any allocation back to itself, by a series of horizontal/vertical jumps without a direct reversal of route.

DEFINTIONS (contd.)

A basic feasible solution to an m x n transportation problem is said to be degenerate if it contains less than (m + n 1) non negative allocations in independent positions .  A feasible solution (not necessarily basic) is said to be an optimal solution if it minimizes the total transportation cost (or maximises the profit)


## CONDITION FOR A FEASIBLE SOLUTION OF THE TRANSPORTATION PROBLEM

The necessary and sufficient condition for the transportation problem to have a feasible solution is that the Total supply = Total demand That is, the problem must be balanced.

## OPTIMAL SOLUTION OF THE TRANSPORTATION PROBLEM PROCEDURAL STEPS

Find the initial basic feasible solution using a) North West Corner Rule b) Least Cost Matrix c) Vogel s Approximation Method/ Penalty Method 2. Find an optimal solution by making successive improvements using MODI Method.
1.

## NORTH WEST CORNER RULE

Starting with the cell at the upper left (north-west) corner of the transportation matrix, allocate as much as possible. That is, x11= min (a1, b1). 2. (i) If min (a1, b1) = a1 put x11= a1, decrease b1 by a1, and move vertically to the second row and make the second allocation x21= min (a2, b1 - x11) in the cell (2,1) . Cross out the first row. (ii)If min (a1, b1) = b1 put x11= b1, decrease a1 by b1, and move horizontally to the second row and make the second allocation x12= min (a1 - x11, b2) in the cell (1,2) . Cross out the first column.
1.

## NORTH WEST CORNER RULE (contd.)

(iii) If a1 = b1 then put x11= a1 = b1. Cross out the first row and the first column and move diagonally . 3. Repeat steps 1 and 2 until rim requirements are met.

PROBLEM 1 1. MG Auto has three plants in Chennai, Fatehpur and Kolkata, and five distribution centers in Coimbatore, Hyderabad, Mumbai, Delhi and Chandigarh. The capacities of the plants (each quarter), the quarterly demands at the distribution centers and the transportation cost per car (in thousands of rupees) from the plants to the distribution centers are given below. Find the initial basic feasible solution to this problem using North West Corner Rule. (MAY 2007) Distribution Centers Supply
Chennai
Plants

2 1 3

11 4 9

10 7 4

3 2 8

7 1 12

4 8 9

Fatehpur Kolkata

Demand

PROBLEM 2

Three refineries with daily capacities of 7, 12 and 11 million gallons of petrol, respectively, supply three distribution areas with daily demands of 10 million gallons each. Petrol is distributed to the three distribution areas through a network of pipelines. The table below gives the transportation cost of transportation (in thousands of rupees) between the refineries and the distribution areas. Using the North West Corner Rule approximation find the initial solution. Distribution Centres Supply
1 Refineries 0 3 2 4 1 6 2 5 7 12 11

PROBLEM 3

Obtain an initial basic feasible solution to the following Transportation problem using the North West corner Rule.
Distribution Centers

Supply
3 11 6 15 4
7

1
Supply Centers

2 3 0 8

1 2 3

2 1 5

1 9

6 1 10

Demand

HOMEWORK 1. Three orchards supply crates of oranges to four retailers. The daily demand at the four retailers is 200, 225, 275, and 250 crates, respectively. Supply at the three orchards is estimated at 250, 300, and 400 crates daily. The transportation costs (in rupees) per crate from the orchards to the retailers are given in Table below. Find the initial basic feasible solution to this problem using the North West Corner Rule.
Retailers 11 16 21 200 13 18 24 225 17 14 13 275 14 10 10 250 Supply 250 300 400

Orchards Demand

## LEAST COST METHOD

1.

2.

Identify the cell with the smallest cost and allocate as much as possible. That is, xij= min (ai, bj). (i) If min (ai, bj) = ai put xij= ai, decrease bj by ai. Cross out the ith row. (ii)If min (ai, bj) = bj put xij= bj, decrease ai by bj. Cross out the jth column. (iii)If min (ai, bj) = ai = bj then put xij = ai = bj. Cross out the ith row and the jth column.

## LEAST COST METHOD (contd.)

3. Repeat step 1 for the resulting reduced transportation matrix until all rim requirements are met.

PROBLEM 1 Mangoes have to be transported from farms in Tamil Nadu, Andhra Pradesh and Maharashtra to 4 factories of Tasty Squash Ltd. located elsewhere in India. Determine using the Least Cost Method, how many tons of mangoes must be transported from each farm to each factory so that the total cost of transportation is minimized given the following data pertaining to the transportation cost (in thousands of rupees).
FACTORIES 1 F TAMIL NADU A ANDHRA PRADESH R M MAHARASHTRA S 1 3 4 2 2 3 2 3 1 2 5 4 4 1 9

Supply 30 50 20

Demand

20

40

30

10

PROBLEM 2

Obtain an initial basic feasible solution to the following Transportation problem using the Least Cost Method.
Distribution Centers

Supply
3 11 6 15 4
7

1
Supply Centers

2 3 0 8

1 2 3

2 1 5

1 9

6 1 10

Demand

PROBLEM 3

The following table gives the cost of transportation per ton (in thousands of rupees) of wheat from the distribution centers to the supply centers of a public Distribution System. Obtain an initial basic feasible solution to the following Transportation problem using the Least Cost Method.
Distribution Centers

Supply
3 7 1 3 4
2

1
Supply Centers

2 3 2 2

1 2 3

5 8 6

5 2

30 70 50

Demand

20

40

60

50

HOMEWORK

Obtain an initial basic feasible solution to the following Transportation problem using the Least Cost Method.
Distribution Centers

Supply
3 6 2 5

1
Supply Centers

2 2 4 1

1 2 3

1 0 3

7 12 11

Demand

10

10

10

## VOGEL S APPROXIMATION METHOD

Find the difference (penalty) between the smallest and the next smallest element in each row(column) and write them in brackets beside each row(column). 2. Identify the row/column with largest penalty (if tie occurs break it arbitrarily). Choose the cell with the smallest cost in the selected row/column and allocate as much as possible to this cell. Cross out the satisfied row/column. 3. Compute the row and column penalties for the reduced transportation matrix and go to step 2. Repeat till rim requirements are satisfied.
1.

PROBLEM 1 1. Three orchards supply crates of oranges to four retailers. The daily demand at the four retailers is 200, 225, 275, and 250 crates, respectively. Supply at the three orchards is estimated at 250, 300, and 400 crates daily. The transportation costs (in rupees) per crate from the orchards to the retailers are given in Table below. Find the initial basic feasible solution using Vogels approximation method.
Retailers 11 16 21 200 13 18 24 225 17 14 13 275 14 10 10 250 Supply 250 300 400

Orchards Demand

PROBLEM 2

Three refineries with daily capacities of 7, 12 and 11 million gallons of petrol, respectively, supply three distribution areas with daily demands of 10 million gallons each. Petrol is distributed to the three distribution areas through a network of pipelines. The table below gives the transportation cost of transportation (in thousands of rupees) between the refineries and the distribution areas. Using Vogels approximation find the initial solution.
Distribution Centres 1 2 Refineries Demand 0 3 10 4 1 10 6 2 5 10 Supply 7 12 11

PROBLEM 3
Determine how many tons of wheat must be transported from each grain elevator to each mill on a monthly basis in order to minimize the total cost of transportation given the following data? Grain Elevator 1. Amritsar 2. Coimbatore 3. Kalahandi Supply 150 175 275
Jaipur Amritsar Coimbatore Kalahanadi 6 7 4

Mysore 8 11 5

## Demand 200 100 300

Puri 10 11 12

HOMEWORK

Obtain an initial basic feasible solution to the following Transportation problem using the Vogels approximation Method.
Distribution Centers Supply

1
Supply Centers

2 3 0 8 5

3 11 6 15 3

4
7

1 2 3

2 1 5 7

6 1 10

1 9 2

Demand

## MODI METHOD (MODIFIED DISTRIBUTION METHOD)

1. 2.

Find an initial basic feasible solution. Check the number of allocated cells. If these are less than (m + n -1) there exists degeneracy and we add a very small positive assignment in suitable independent positions so that the total number of independent allocated positions is (m + n -1). Compute the ui and vj values for each row and column, from the relation cij = ui + vj , for each occupied cell (i,j), starting initially with ui = 0 or vj = 0, preferably for which the corresponding rows or columns has maximum number of individual allocations

3.

MODI METHOD (contd.) 4. Find dij = cij (ui + vj) and enter at the upper right hand corner of each unoccupied cell. 5. (i) If all dij > 0, then the solution under test is optimal and unique. (ii) If all dij > 0, with at least one dij = 0, then the solution under test is optimal and an alternative optimal solution exists. (iii) If at least one dij < 0, then the solution is not optimal. Go to the next step.

MODI METHOD (contd.) 6. Form a new basic feasible solution by giving maximum allocation to the cell for which dij is most negative by making an occupied cell empty. For this draw a closed path consisting of horizontal and vertical lines beginning and ending at the cell for which dij is most negative and having all of its other corners at some allocated cell. Along this loop indicate +U and - U alternatively at the corners. Choose the minimum of the allocations from the cells with U %dd this minimum allocation to the cells with + U and subtract from cells with U

MODI METHOD (contd.) 7. Repeat steps 2 to 5 to test the optimality of the new basic feasible solution. 8. Continue the above procedure until an optimum solution is attained.

PROBLEM 1

The South East Cement Company has 3 factories in Tamil Nadu supplying 4 distribution centres located elsewhere. The monthly production capacities of the factories are 11, 13 and 19 tons, and the monthly requirements at the distribution centres are 6, 10, 12 and 15 tons , respectively. The transportation cost ( in thousands of rupees) per ton is given below. Determine an optimum transportation schedule that would minimise the overall cost.
Distribution Centers

1
Factories

2 16 18 27

3 25 14 18

4
13

1 2 3

21 17 32

23 41

PROBLEM 2

Obtain the optimal solution for the transportation problem whose matrix is given below.

Demand Centres

Supply
Q 3 1 4 R
2

P
Production Centres

1 2 3

7 2 3

3 6

3 5

Demand

PROBLEM 3

The Koolair Company has 3 plants manufacturing Air conditioners with capacities of 30, 40 and 30 units per month. It markets these Air conditioners through 3 warehouses whose requirements are 45, 35 and 20 units per month. The cost of transportation ( in rupees) per unit is given below. How should the units be transported to minimise the cost.
Warehouses

P
Plants

Q 11 16 10

R
8

1 2 3

13 14 12

13 12

PROBLEM 4

The Palath Pickles Company has 3 factories in Kerala supplying 5 distribution centres located in different parts of the country. The daily production capacities of the factories are 100, 120 and 120 bottles, and the daily requirements at the distribution centres are 40, 50, 70, 90 and 90 bottles, respectively. The transportation cost (in rupees) per bottle is given below. Determine an optimum transportation schedule that would minimise the overall cost.
Distribution Centers

1
Factories

2 1 4 2

3 2 3 6

4 6 5 4

5
9

1 2 3

4 6 5

7 8

PROBLEM 5

Obtain the optimal solution for the transportation problem whose matrix is given below.

20

18 22 19 80

18 23 21 85

21 20 18 105

19 24 19 70

SUPPLY 100
125

21 18 DEMAND 60

175

DEGENERACY IN TRANSPORTATION MODEL  In a transportation problem whenever the number of non-negative independent allocations is less than (m + n - 1) the problem is said to be degenerate.


Degeneracy may occur either at the initial stage or at an intermediate stage or at a subsequent iteration. To resolve degeneracy, allocate an extremely small amount I (close to zero) to one or more empty cells of the transportation matrix (generally minimum cost cells in independent positions)such that,

DEGENERACY IN TRANSPORTATION MODEL (contd.) (i) 0 < I < xij for all xij > 0 (ii) xij I ! xij for all xij > 0


The cells containing I are then treated like other occupied cells and the problem is solved in the usual way. The Is are kept till the optimum solution is reached and then we let each I p 0

PROBLEM 1

Obtain the optimal solution for the transportation problem whose matrix is given below.
Demand Centres

Supply
R 5 12 7 1
5

P
Production Centres

Q 20 9 5 7
12

S
7

1 2 3 4
5

10 13 4 14
3

8 9 0
19

10 20 30 40 50

Demand

60

60

20

10

PROBLEM 2

Obtain the optimal solution for the transportation problem whose matrix is given below.
Demand Centres

Supply
C 3 2
2

A
Production Centres

B 2 3
2

D
4

1 2
3

1 4
0

6 8 10

0
1

Demand

HOMEWORK 3

Obtain the optimal solution for the transportation problem whose matrix is given below.
Demand Centres

Supply
Q 8 11
5

P
Production Centres

R
10

1 2
3

6 7
4

11
12

Demand

## 200 100 300

PROBLEM 3

Obtain the optimal solution for the transportation problem whose matrix is given below.
Demand Centres

Supply
Q 7 3 4
6

P
Production Centres

R
4

1 2 3
4

2 3 5
1

1 7
2

1 7

Demand

UNBALANCED TRANSPORTATION MODEL  If a transportation problem is unbalanced, that is, if total availability is not equal to the total demand
m i i !1 n j j !1

a { b

Then we have to convert this to a balanced problem, by introducing a dummy source or destination with zero transportation costs and then solve by the usual method

PROBLEM 2

Obtain the optimal solution for the transportation problem whose matrix is given below.
Demand Centres

Supply
Q 8 11
5

P
Production Centres

R
10

1 2
4

6 7
4

11
12

Demand

## MAXIMISATON IN TRANSPORTATION MODEL



In a transportation problem the objective is to minimize the transportation cost. If the objective is to maximize the profit then we convert the maximization problem into a minimization problem by subtracting all the entries of the cost matrix from the highest entry in that matrix. We then solve the problem as usual.

PROBLEM 1

Solve the following transportation problem to maximise the profit. (MAY 2007)
Demand Centres

Supply
C 22 30
28

A
Production Centres

B 25 35
38

D
33

1 2
3

40 44
38

100 30 70

30
30

Demand

40

20

60

30

PROBLEM 2

Demand Centres

Supply
C 22 14
16

A
Supply Centres

B 19 9
6

D
11

1 2
3

4 0
6

100 30 70

4
14

Demand

40

20

60

30