TRANSPORTATION PROBLEMS

 Consider a problem of transporting goods from m sources (factories) F1,F2 ---Fm to n destinations (warehouses) W1, W2, --- Wn The capacities of the sources are S1, S2, ---Sm respectively while the expected demands at the respective warehouses are d1,d2, --- dn.

Cij indicates the cost of transporting one unit from the source Fi to destination Wj. Thus C12, is per unit transportation cost from the first factory F1, to the second warehouse W2.

It is assumed that the total supply available at the sources will exactly satisfy the total demand required at all the destinations i.e. S1 + S2 + ... + Sm= d1 + d2 + ... + d n.

 

Source

Destination

 

W1

W2

 -------

Wn

Supply capacity

F1

C11

C12

 -------

C1n

S1

F2

C21

C22

 -------

C2n

S2

 -------

 -------

 -------

 -------

 -------

 -------

 -------

 -------

 -------

 -------

 -------

 -------

Fm

Cm1

Cm2

 -------

Cmn

Sm

Demand

d1

d2

 -------

dn

N=Total supply/Demand

 

 

The problem is to find the number of units to be transported from each of the sources to each of the destinations. So that the total cost of transportation is minimised .

Terminology of Transportation problem

i.                   Balanced Transportation Problem: - Here the total capacity of the supply points or source is equal to the total demand at the destination.

ii.                 Unbalanced Transportation :-Here the total supply is not equal to the total demand

iii.             Transportation Table :-It is used to represent the data about the supply at sources demand at destination and per unit transportation cost from each source to each destination.

e.g. The above table has 3 rows for three sources, 3 columns corresponding to 3 warehouses along with one row and column indicating the demands and supply. Each square at the intersection of the rows and columns is called as a 'cell’. The figures in the right hand top corner for each cell indicate the per unit transportation cost between the respective source and destination, while the figures in circles indicate the number of units to be transported. eg. 300 units to be transported from Mumbai to Delhi where unit cost of transportation is Rs 10. We have to identify these figures to obtain the optimum solution.

iv. Dummy Source or Destination :- This is represented by adding an extra row or column the transportation table with 0 per unit cost for each of its cells. It is used to balance an unbalanced problem by considering appropriate supply or demand for it.

v. Initial Feasible solution :- It is a solution that satisfies the supply and demand conditions and yet it may or may not be the optimum one. There are three methods of obtaining this solution. viz. North West Corner Method (NWCM), Least Cost Method (LCM) and Voge Approximation Method (VAM).

Vi. Optimum solution : It is the feasible solution which also gives a transportation plan with minimum total cost. This can be obtained by using the Stepping Stone Method or Modified Distribution Method (MODI Method), once we get the initial feasible solution.

Finding the Initial Feasible Solution

There are three methods which are use for finding the initial feasible solution

A ) North-West Corner Method (NWCM)

B) Least Cost Method (LCM) Or Matrix Minima Method

C) Vogel’s Approximation Method (VAM)

A. North-West Corner Method (NWCM)

Step1:- Select the North - West corner cell in the transportation table and allocate as many units as possible to it after checking the supply (in row) and the demand (in column) position for that cell.

Step2: Reduce the supply and demand figures for the corresponding row and column accordingly.

Step3: Cover the row or column where the supply or demand gets fully exhausted (i.e. becomes 0) to get a reduced transportation table.

 Step 4: Go to step 1 and repeat the procedure until total supply is fully allocated to the cells so as to fulfill the total demand.

Example 1 : Consider the following transportation table with supply, demand and unit cost figures as shown : This is a balanced table with total demand = total supply = 125.

 

D1

D2

D3

Supply

S1

30     2

4

1

0     30

S2

3

5

2

   25

S3

4

6

7

20

S4

3

2

1

50

Demand

15   45

25

55

125

 

i. Choose the North - West corner cell i.e. S1 D1.  The row supply is 30 and column demand is 45 for S1D1 cell . Hence we can assign at most 30 units to it.

ii. After assigning these 30 units, the supply of S1 becomes (30-30=0 unit) the demand for D1 reduces to 45-30 =15

 iii. Thus, cover row S1 now as its supply has been fully used to get a reduced table.

 

D1

D2

D3

Supply

S1

30     2

4

1

30

S2

15     3

5

2

10    25

S3

4

6

7

20

S4

3

2

1

50

Demand

15   45   

25

55

125

 

2. In this table go again to the north west corner cell i.e. S2D1 and allocate 15 units  to it as 15 unit of demand  and 25 units of supply available. This reduces supply 25 - 15 = 10 and demand of D1 to 15 - 15 = 0. Now reduce table for avoid confusion by reducing D1 column and S1 row.

D2

D3

Supply

S2

10       5

2

10

S3

6

7

20

S4

2

1

50

Demand

15      25

55

125

 

3. In this table go again to the north west corner cell i.e. S2D2 and allocate 10 units  to it , as 25 units of demand  and 10 units of supply available. This reduces supply 10-10 = 0 and demand of D2 to 25 - 10 = 15.  Again  reducing  S2 row.

 

D2

D3

Supply

S3

15      6

7

5      20

S4

2

1

50

Demand

15      25

55

125

 

4. In this table go again to the north west corner cell i.e. S3D2 and allocate 15 units  to it, as 15 units of demand  and 20 units of supply available. This reduces supply 20-15 = 5  and demand of D2 to 15 - 15 = 0.  Again  reducing  D2 coloum.

 

D3

Supply

S3

5            7

5      20

S4

 50              1

50

Demand

50     55

125

 

4. In this table go again to the north west corner cell i.e. S3D3 and allocate 5 units  to it, as 50 units of demand  and 5 units of supply available. This reduces supply 5-5 = 0 and demand of D2 to 55 - 5 = 50.  Again reducing S3 row. Now last cell is remaining S4D3 here demand is 50 and supply is also 50 so assign 50 to this cell.

Finally we get

 

 

D1

D2

D3

Supply

S1

30     2

4

1

30

S2

15     3

10        5

2

   25

S3

4

15        6

5         7

20

S4

3

2

50       1

50

Demand

45

25

55

125

 

Total= 30 × 2+ 15 × 3+ 10 ×5 +15 ×6 + 5 ×7+ 50×1 = 330 as total transportation cost.

Since there are m+n-1 = 4+3-1 = 6 number of independent occupied cells , the solution is feasible.

 Least Cost Method (LCM) or Matrix Minima Method

we go on making allocations to the minimum cost cell in the table

Step 1:

(i) Select a cell with minimum unit transportation cost from the table.

(ii)If there are more than one cells with minimum unit cost i.e. there is a tie, then select that cell among them where more number of units can be allocated (after considering their row supply and column demands.) If there is a tie again, then select a cell randomly from them.

 Step 2: Allocate maximum possible number of units to it. Reduce the corrosponding supply and demand figures accordingly to get a reduced transportation table as in case of NWCM.

Step 3 : Repeat steps 1 and 2 until entire supply is exhausted to fulfil the entire demand.

 Example 2 : For the same problem as in Example 1

 i. Choose the cell with minimum unit cost. There are two such cells S1D3 and S4D3 both having unit cost 1 i.e. there is a tie.

 ii. Hence select that cell where more units can be allocated. After considering the row supply and column demand for these cells we see that we can allocate 30 units to S1D3and 50 units to S4D3. Hence select S4D3.

2. Allocate 50 units to it and then reduce its row supply and column demand by 50. Thus, the supply of S, gets fully exhaused and demand for D, becomes 5. Hence, cover S, to get the reduced table.

 

 

D1

D2

D3

Supply

S1

2

4

1

25    30

S2

3

5

2

   25

S3

4

6

7

20

S4

3

2

50     1

50

Demand

   45

25

5    55

125

 

3. Next minimum cost cell is S1D3 having unit cost 1, here supply capacity is 25 but demand is only 5 so assign 5 to cell ,after supply capacity of S1 become 30-5-25

 

D1

D2

D3

Supply

S1

2

4

5      1

  25    30

S2

3

5

2

   25

S3

4

6

7

20

S4

3

2

50     1

50

Demand

   45

25

5    55

125

 

4.Here minimum cost cell is S1D1 having unit cost 2 here supply capacity is 25 but demand is 45 so assign 25 to cell ,after supply capacity of S1 become 25-25=0, and demand 45-25 =20

 

D1

D2

Supply

S1

25      2

4

 25    30

S2

20     3

5      5

5   25

S3

4

20    6

20

Demand

    20   45

25

125

 

5.After this minimum cost cell is S2D1 having unit cost 3, here supply capacity is 25 but demand is 20 so assign 20 to cell ,after supply capacity of S2 become 25-20=5, and demand 20-20=0

Now only S2D2 and  S3D2  cells are remaining and out of this  S2D2 having minimum value  so assign 5 to this cell and remaining 20 to S3D2

 

D1

D2

D3

Supply

S1

25     2

4

5     1

   30

S2

20      3

     5     5

2

   25

S3

4

20     6

7

20

S4

3

2

50    1

50

Demand

   45

25

   55

125

Total cost is = 25× 2+ 20 × 3+ 5×5+ 20× 6+5 ×1 +50 ×1 = 310

m+n -1 = 4+3-1=6

  Vogel's Approximation Method (VAM) :

Here we go on making allocations to the minimum cost cell of a row or column for the penalty for not making an allocation is high.

 Step 1: Compute the penalty (ie. the difference between the two smallest unit cost figure cells) for each row and column.

Step 2: Identify the row or column with highest penalty and choose the cell with smallest unit cost in it.

(If there is a tie for highest penalties, select the row or column containing the minimum cost cell among them If there is a tie again, then select that cell where maximum allocation is possible cell or we can select it randomly) .

Step 3: Allocate maximum possible units to the selected cell and reduce its row supply and column demand accordingly. Obtain the reduced table then as done previously.

Step 4:- Recompute the penalties for reduced table. Repeat the above procedure until the entire demand and supply gets exhausted.

Example

1)   Find penalty by the difference between the two smallest unit cost figure cells for each row and column

 

D1

D2

D3

Supply

Penalty

S1

2

4

1

    30

2-1=1

S2

3

5

2

   25

3-2=1

S3

4

6

7

20

6-4=2

S4

3

25   2

1

25  50

2-1=1

Demand

   45

0   25

    55

125

 

Penalty

3-2=1

4-2=2

2-1=1

 

 

2)    Identify the row or column with highest penalty and choose the cell with smallest unit cost in it, in this row S3 and D2 column having highest penalty so there is tie then select the row or column containing the minimum cost cell among them so , in  D2 column having minimum cost cell 2 in  is S4D2 cell , Here supply is 50 and demand is 25 so assign 25 to this cell so demand of D2 is 25-25=0 and S2 supply is 50-25=25.

D1

D2

D3

Supply

Penalty

S1

2

4

1

    30

2-1=1

S2

3

5

2

   25

3-2=1

S3

20     4

6

7

20

7-4=3

S4

3

25    2

1

25  50

3-1=2

Demand

 25  45

25

    55

125

 

Penalty

3-2=1

4-2=2

2-1=1

 

 

3)   Again find out penalty  by above method, Here highest penalty is 3 in row S3 and lowest cost is 4 in cell S3D1 .For this cell supply capacity is 20 and demand is 45 so assign 20 to this cell so supply become 0 and demand become 45-20=25

 

D1

D2

D3

Supply

Penalty

S1

2

4

1

    30

2-1=1

S2

3

5

2

   25

3-2=1

S3

20   4

6

7

20

7-4=3

S4

3

25     2

25       1

25  50

3-1=2

Demand

 25  45

25

30    55

125

 

Penalty

3-2=1

4-2=2

2-1=1

 

 

 

4)   Find penalty again, we get S4 row having maximum penalty 2 and minimum cost is 1 in cell S4D3. For this cell supply capacity is 25 and demand is25, so assign 25 to this cell so supply become 0 and demand become 55-25=30

5)    

 

D1

D2

D3

Supply

Penalty

S1

2

4

30      1

    30

2-1=1

S2

25     3

5

2

   25

3-2=1

S3

20    4

6

7

20

7-4=3

S4

3

25     2

25     1

25  50

3-1=2

Demand

 25  45

25

30    55

125

 

Penalty

3-2=1

4-2=2

2-1=1

 

 

5) Find penalty, there is tie then select the row or column containing the minimum cost cell among them so , in row S1and  D3 column having minimum cost cell 1 in   S1D3 cell , Here supply is 30 and demand is 30 so assign 30 to this cell so demand of D3 is 30-30=0 and S1 supply is 30-30=0.

Final

 

 

D1

D2

D3

Supply

S1

2

4

30      1

    30

S2

25     3

5

2

   25

S3

20    4

6

7

20

S4

3

25     2

25     1

  50

Demand

 45

25

    55

125

 

 

M+n-1=6 but here we get only cell 5 so this is not feasible solution

 

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