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Teaching Notes - Module 3

This document discusses the transportation problem and its mathematical modeling. The transportation problem aims to minimize the total cost of shipping goods from sources to destinations. It provides an example of shipping products from three factories to four warehouses. The problem is formulated as a linear program (LP) to minimize total transportation costs given supply/demand constraints. It also discusses general models for transportation problems and methods for finding initial feasible solutions like the Northwest Corner rule.

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Sneha Giji Saji
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55 views

Teaching Notes - Module 3

This document discusses the transportation problem and its mathematical modeling. The transportation problem aims to minimize the total cost of shipping goods from sources to destinations. It provides an example of shipping products from three factories to four warehouses. The problem is formulated as a linear program (LP) to minimize total transportation costs given supply/demand constraints. It also discusses general models for transportation problems and methods for finding initial feasible solutions like the Northwest Corner rule.

Uploaded by

Sneha Giji Saji
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Teaching Notes – Transportation Problem

Practical Issues
• What is the optimal way of shipping goods from various sources (warehouses) to
different markets so as to minimize the total cost involved in the shipping?
• How to handle a situation when some routes are not available or when some units have
to be necessarily transported from a particular source to a particular market?
• If it were possible to increase supply, which of the sources should be preferred?
• Instead of allowing shipping of goods only from listed sources to different destinations,
if it were possible to ship goods from a particular source to another source or destination
and then from there to a further destination, how much cost can be saved? This is what
is called a transshipment problem.

Mathematical model of transportation problem


• Let us consider an example of a single commodity from three source of supply to
four demand destinations. The source of supply are production facilities,
warehouses or supply centres having certain amount of supply. The destinations are
consumption facilities, warehouses or demand centres each having certain amount
of requirements of the commodity.
• Example: A company has three production facilities 𝑆1 , 𝑆2 , and 𝑆3 with production
capacity of 7, 9 and 18 units per week of a product, respectively. These units are to
be shipped to four warehouses 𝐷1 , 𝐷2 , 𝐷3 and 𝐷4 with requirement of 5,6,7 and 14
units per week, respectively. The transportation costs (in Rs) per unit between
factories to warehouses are given in the table below:
• Formulate the transportation problem as an LP model to minimize the total
transportation cost.
𝑫𝟏 𝑫𝟐 𝑫𝟑 𝑫𝟒 Supply
(Availability)
𝑺𝟏 19 30 50 10 7
𝑺𝟐 70 30 40 60 9
𝑺𝟑 40 8 70 20 18
Demand (Requirement) 5 8 7 14 34

Let 𝑥𝑖𝑗 = number of units of the product to be transported from a production facility 𝑖 (𝑖 =
1,2,3) to a warehouse 𝑗 (𝑗 = 1,2,3,4)
The Transportation problem is stated as an LP model as follows:
Minimize
𝑍 = 19𝑥11 + 30𝑥12 + 50𝑥13 + 10𝑥14 + 70𝑥21 + 30𝑥22 + 40𝑥23 + 60𝑥24 + 40𝑥31 + 8𝑥32
+ 70𝑥33 + 20𝑥34
Subject to constraints
Supply constraints
𝑥11 + 𝑥12 + 𝑥13 + 𝑥14 = 7
𝑥21 + 𝑥22 + 𝑥23 + 𝑥24 = 9
𝑥31 + 𝑥32 + 𝑥33 + 𝑥34 = 18
Demand constraints
𝑥11 +𝑥21 + 𝑥31 = 5
𝑥12 + 𝑥22 + 𝑥32 = 8
𝑥13 + 𝑥23 + 𝑥33 = 7
𝑥14 + 𝑥24 + 𝑥34 = 14
𝑥𝑖𝑗 ≥ 0

In the above LP model, there are 𝑚 × 𝑛 = 3 × 4 = 12 decision variables, and 𝑚 + 𝑛 =


7 constraints, where 𝑚 number of rows and 𝑛 are number of columns in the general
transportation table
General Mathematical model of transportation problem
𝑥𝑖𝑗 = number of units shipped from supply point 𝑖 to demand point 𝑗
i =m j =n
Minimize Total Cost  c x
i =1 j =1
ij ij

n
Subject to xij = si (i = 1, 2,..., m)
j =1
m

x
i =1
ij = dj ( j = 1, 2,..., n)

xij  0 (i = 1, 2,..., m; j = 1, 2,..., n)

General transportation table

Existence of feasible solution


• A necessary and sufficient conditions for a feasible solution to the
transportation problem is
• Total Supply=Total Demand
i =m j =n

s = d
i =1
i
j =1
j

• If Total supply equals to total demand, the problem is said to be a


balanced transportation problem
• If total supply exceeds total demand, we can balance the problem by
adding dummy demand point. Since shipments to the dummy demand
point are not real, they are assigned a cost of zero.
Finding an Initial Basic Feasible Solution
• The transportation simplex starts with an initial basic feasible solution (as does
regular simplex)
• There are alternative ways to find an initial BFS, most common are
• The Northwest corner rule
• Least cost method
• Vogel’s method
The Northwest corner rule
Step1: Select the upper left (north-west) cell of the transportation matrix and allocate
the maximum possible value to X11 which is equal to min(a1,b1).
Step2:
• If allocation made is equal to the supply available at the first source (a1 in first
row), then move vertically down to the cell (2,1).
• If allocation made is equal to demand of the first destination (b1 in first
column), then move horizontally to the cell (1,2).
• If a1=b1 , then allocate X11= a1 or b1 and move to cell (2,2).
Step3: Continue the process until an allocation is made in the south-east corner cell of
the transportation table.
Least cost method
• The Least Cost Method is another method used to obtain the initial feasible solution
for the transportation problem. Here, the allocation begins with the cell which has the
minimum cost. The lower cost cells are chosen over the higher-cost cell with the
objective to have the least cost of transportation.
• The Least Cost Method is considered to produce more optimal results than the North-
west Corner because it considers the shipping cost while making the allocation,
whereas the North-West corner method only considers the availability and supply
requirement and allocation begin with the extreme left corner, irrespective of the
shipping cost.
Vogel's Approximation Method (VAM) or penalty method
This method is preferred over the NWCM and VAM, because the initial basic feasible solution
obtained by this method is either optimal solution or very nearer to the optimal solution.
Step-1:
Find the cells having smallest and next to smallest cost in each row and write the difference
(called penalty) along the side of the table in row penalty.
Step-2:
Find the cells having smallest and next to smallest cost in each column and write the difference
(called penalty) along the side of the table in each column penalty.
Step-3:
Select the row or column with the maximum penalty and find cell that has least cost in selected
row or column. Allocate as much as possible in this cell.
If there is a tie in the values of penalties then select the cell where maximum allocation can be
possible
Step-4:
Adjust the supply & demand and cross out (strike out) the satisfied row or column.
Step-5:
Repeat this step until all supply and demand values are 0.
Solve the Transportation Table to find Initial Basic Feasible Solution using Vogel's
Approximation Method (VAM) Method.

` ````````
Example 2
First of all the difference between two least cost cells are calculated for each row
and column, which can be seen in the iteration given for each row and column.
Then the largest difference is selected, which is 4 in this case. So, allocate 20 units
to cell BD, since the minimum cost is to be chosen for the allocation. Now, only 20
units are left with the source B.

Column D is deleted, again the difference between the least cost cells is calculated
for each row and column, as seen in the iteration below. The largest difference
value comes to be 3, so allocate 35 units to cell AF and 15 units to the cell AE.
With this, the Supply and demand of source A and origin F gets saturated, so
delete both the row A and Column F.

Now, single column E is left, since no difference can be found out, so allocate
60 units to the cell CE and 20 units to cell BE, as only 20 units are left with
source B. Hence the demand and supply are completely met.

Now the total cost can be computed, by multiplying the units assigned to each
cell with the cost concerned. Therefore,

Total Cost = 20*3 + 35*1 + 15*4 + 60*4 + 20*8 = Rs 555

Why Transportation Problems are not solved using simplex algorithm?

Transportation problem is a special case of linear programming, but they are not solved using
simplex algorithm for the following two reasons:

• The balanced transportation problem has all its constraints in equation form and since
∑𝑎𝑖 = ∑𝑏𝑗, the system of equations (constraints) is linearly dependent. This gives rise
to degeneracy and the limitation of the simplex algorithm resulting in more iteration for
degenerate problems are well known.

• The balanced transportation problem by its structure allows the formation of good basic
feasible solutions that are close to optimal, while simplex starts with a basic feasible
solution that is quite far away from the optimal. Balanced transportation problems are
solved by creating an initial basic feasible solution, that is close to optimum and then
reaching the optimum in very few iterations.
Assignment Problem

Practical issue

• How to assign the given jobs to some workers on a one-to-one basis when completion
time of performance is given for each combination and it is desired that the jobs are
completed in the least time or at the least cost.

• How to deal with situations when the number of jobs do not match with the number of
job performers, when some job(s) cannot be performed by, or is not be given to, a
particular performer, or when a certain job has to be given to a particular individual?

• How should the salesman of a company be assigned to different sales zones so that the
total expected sales are maximized?

• How to schedule the flights or the bus routes between two cities so that the layover
times for the crew can be minimized?

• An assignment problem is a balanced transportation problem in which all supplies and


demands are equal to 1. Thus, an assignment problem is characterized by knowledge of
the cost of assigning each supply point to each demand point. The assignment
problem’s matrix of costs is its cost matrix

• This situation is a special case of the Transportation Model And it is known as the
assignment problem.

• Here, jobs represent “sources” and machines represent “destinations.”

• The supply available at each source is 1 unit And demand at each destination is 1 unit.

The assignment model can be expressed mathematically as follows:

Xij= 0, if the job j is not assigned to machine i

1, if the job j is assigned to machine i


Example: Assignment Problem using Simplex Method

Worker Job Supply


A B C D
1 45 40 51 67 1
2 57 42 63 55 1
3 49 52 48 64 1
4 41 45 60 55 1
Demand 1 1 1 1

Minimize
𝑍 = 45𝑋11 + 40𝑋12 + 51𝑋13 + 67𝑋14 + 57𝑋21 + 42𝑋22 + 63𝑋23 + 55𝑋24 +
49𝑋31 + 52𝑋32 + 48𝑋33 + 64𝑋34 + 41𝑋41 + 45𝑋42 + 60𝑋43 + 55𝑋44
Subject to
𝑋11 + 𝑋12 + 𝑋13 + 𝑋14 = 1
𝑋21 + 𝑋22 + 𝑋23 + 𝑋24 = 1
𝑋31 + 𝑋32 + 𝑋33 + 𝑋34 = 1
𝑋41 + 𝑋42 + 𝑋43 + 𝑋44 = 1
𝑋11 + 𝑋21 + 𝑋31 + 𝑋41 = 1
𝑋12 + 𝑋22 + 𝑋32 + 𝑋42 = 1
𝑋13 + 𝑋23 + 𝑋33 + 𝑋43 = 1
𝑋14 + 𝑋24 + 𝑋34 + 𝑋44 = 1
All 𝑋𝑖𝑗’𝑠 = 0 𝑜𝑟 1

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