Chapter 9

Transportation and
Assignment Models

To accompany
Quantitative Analysis for Management, Tenth Edition,
by Render, Stair, and Hanna © 2008 Prentice-Hall, Inc.
Power Point slides created by Jeff Heyl © 2009 Prentice-Hall, Inc.
 Introduction
◼ In this chapter we will explore two special
linear programming models
◼ The transportation model
◼ The assignment model
◼ These problems are members of a
category of LP techniques called network
flow problems

© 2009 Prentice-Hall, Inc. 10 – 2

 Introduction
◼ Transportation model
◼ The transportation problem deals with the
distribution of goods from several points of
supply (sources) to a number of points of
demand (destinations)
◼ Usually we are given the capacity of goods at
each source and the requirements at each
destination
◼ Typically the objective is to minimize total
transportation and production costs

© 2009 Prentice-Hall, Inc. 10 – 3

 Introduction
◼ Example of a transportation problem in a network
format
Factories Warehouses
(Sources) (Destinations)

100 Units Des Moines Albuquerque 300 Units

300 Units Evansville Boston 200 Units

300 Units Fort Lauderdale Cleveland 200 Units

Capacities Shipping Routes Requirements

Figure 10.1
© 2009 Prentice-Hall, Inc. 10 – 4
 Introduction
◼ Assignment model
◼ The assignment problem refers to the class of
LP problems that involve determining the most
efficient assignment of resources to tasks
◼ The objective is most often to minimize total
costs or total time to perform the tasks at hand
◼ One important characteristic of assignment
problems is that only one job or worker can be
assigned to one machine or project

© 2009 Prentice-Hall, Inc. 10 – 5

 Introduction
◼ Streamlined versions of the simplex method are
important for two reasons
1. Their computation times are generally 100 times faster
2. They require less computer memory (and hence can
permit larger problems to be solved)
◼ A common techniques for developing initial
solutions are the northwest corner method and
Vogel’s approximation
◼ The initial solution is evaluated either using the
stepping-stone method or the MODI method
◼ We also introduce a solution procedure called the
Hungarian method, Flood’s technique, or the
reduced matrix method

© 2009 Prentice-Hall, Inc. 10 – 6

 Setting Up a Transportation Problem

◼ The Executive Furniture Corporation

manufactures office desks at three locations: Des
Moines, Evansville, and Fort Lauderdale
◼ The firm distributes the desks through regional
warehouses located in Boston, Albuquerque, and
Cleveland
◼ Estimates of the monthly production capacity of
each factory and the desks needed at each
warehouse are shown in Figure 10.1

© 2009 Prentice-Hall, Inc. 10 – 7

 Setting Up a Transportation Problem

◼ Production costs are the same at the three

factories so the only relevant costs are shipping
from each source to each destination
◼ Costs are constant no matter the quantity
shipped
◼ The transportation problem can be described as
how to select the shipping routes to be used and
the number of desks to be shipped on each route
so as to minimize total transportation cost
◼ Restrictions regarding factory capacities and
warehouse requirements must be observed

© 2009 Prentice-Hall, Inc. 10 – 8

 Setting Up a Transportation Problem

◼ The first step is setting up the transportation

table
◼ Its purpose is to summarize all the relevant data
and keep track of algorithm computations

Transportation costs per desk for Executive Furniture

TO
FROM ALBUQUERQUE BOSTON CLEVELAND
DES MOINES $5 $4 $3

EVANSVILLE $8 $4 $3

FORT LAUDERDALE $9 $7 $5

Table 10.1

© 2009 Prentice-Hall, Inc. 10 – 9

 Setting Up a Transportation Problem

◼ Geographical locations of Executive Furniture’s

factories and warehouses

Boston

Cleveland
Factory
Des Moines
Evanston Warehouse

Albuquerque

Fort Lauderdale

Figure 10.2

© 2009 Prentice-Hall, Inc. 10 – 10

 Setting Up a Transportation Problem

Des Moines
◼ Transportation table for Executive Furniture capacity
constraint

TO WAREHOUSE WAREHOUSE WAREHOUSE

AT AT AT FACTORY
FROM ALBUQUERQUE BOSTON CLEVELAND CAPACITY

DES MOINES $5 $4 $3
100
FACTORY

EVANSVILLE $8 $4 $3
300
FACTORY

FORT LAUDERDALE $9 $7 $5
300
FACTORY

WAREHOUSE
300 200 200 700
REQUIREMENTS
Cell representing a
Table 10.2 Total supply source-to-destination
Cost of shipping 1 unit from Cleveland (Evansville to Cleveland)
Fort Lauderdale factory to and demand
warehouse shipping assignment
Boston warehouse demand that could be made
© 2009 Prentice-Hall, Inc. 10 – 11
 Setting Up a Transportation Problem

◼ In this table, total factory supply exactly

equals total warehouse demand
◼ When equal demand and supply occur, a
balanced problem is said to exist
◼ This is uncommon in the real world and
we have techniques to deal with
unbalanced problems

© 2009 Prentice-Hall, Inc. 10 – 12

 Developing an Initial Solution:
Northwest Corner Rule
◼ Once we have arranged the data in a table, we
must establish an initial feasible solution
◼ One systematic approach is known as the
northwest corner rule
◼ Start in the upper left-hand cell and allocate units
to shipping routes as follows
1. Exhaust the supply (factory capacity) of each row
before moving down to the next row
2. Exhaust the demand (warehouse) requirements of each
column before moving to the right to the next column
3. Check that all supply and demand requirements are
met.
◼ In this problem it takes five steps to make the
initial shipping assignments
© 2009 Prentice-Hall, Inc. 10 – 13
 Developing an Initial Solution:
Northwest Corner Rule
1. Beginning in the upper left hand corner, we
assign 100 units from Des Moines to
Albuquerque. This exhaust the supply from Des
Moines but leaves Albuquerque 200 desks short.
We move to the second row in the same column.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

© 2009 Prentice-Hall, Inc. 10 – 14

 Developing an Initial Solution:
Northwest Corner Rule
2. Assign 200 units from Evansville to Albuquerque.
This meets Albuquerque’s demand. Evansville
has 100 units remaining so we move to the right
to the next column of the second row.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

© 2009 Prentice-Hall, Inc. 10 – 15

 Developing an Initial Solution:
Northwest Corner Rule
3. Assign 100 units from Evansville to Boston. The
Evansville supply has now been exhausted but
Boston is still 100 units short. We move down
vertically to the next row in the Boston column.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 100 300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

© 2009 Prentice-Hall, Inc. 10 – 16

 Developing an Initial Solution:
Northwest Corner Rule
4. Assign 100 units from Fort Lauderdale to Boston.
This fulfills Boston’s demand and Fort
Lauderdale still has 200 units available.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 100 300
(E)

FORT LAUDERDALE $9 $7 $5
100 300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

© 2009 Prentice-Hall, Inc. 10 – 17

 Developing an Initial Solution:
Northwest Corner Rule
5. Assign 200 units from Fort Lauderdale to
Cleveland. This exhausts Fort Lauderdale’s
supply and Cleveland’s demand. The initial
shipment schedule is now complete.
Table 10.3
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100 100
(D)

EVANSVILLE $8 $4 $3
200 100 300
(E)

FORT LAUDERDALE $9 $7 $5
100 200 300
(F)

WAREHOUSE
300 200 200 700
REQUIREMENTS

© 2009 Prentice-Hall, Inc. 10 – 18

 Developing an Initial Solution:
Northwest Corner Rule
◼ We can easily compute the cost of this shipping
assignment
ROUTE
UNITS PER UNIT TOTAL
FROM TO SHIPPED x COST ($) = COST ($)
D A 100 5 500
E A 200 8 1,600
E B 100 4 400
F B 100 7 700
F C 200 5 1,000
4,200

◼ This solution is feasible but we need to check to

see if it is optimal
© 2009 Prentice-Hall, Inc. 10 – 19
 Stepping-Stone Method:
Finding a Least Cost Solution

◼ The stepping-stone method is an iterative

technique for moving from an initial
feasible solution to an optimal feasible
solution
◼ There are two distinct parts to the process
◼ Testing the current solution to determine if
improvement is possible
◼ Making changes to the current solution to
obtain an improved solution
◼ This process continues until the optimal
solution is reached

© 2009 Prentice-Hall, Inc. 10 – 20

 Stepping-Stone Method:
Finding a Least Cost Solution
◼ There is one very important rule
◼ The number of occupied routes (or squares) must
always be equal to one less than the sum of the
number of rows plus the number of columns
◼ In the Executive Furniture problem this means the
initial solution must have 3 + 3 – 1 = 5 squares
used
Occupied shipping Number Number of
routes (squares) = of rows + columns – 1

© 2009 Prentice-Hall, Inc. 10 – 21

 Testing the Solution for
Possible Improvement

◼ The stepping-stone method works by

testing each unused square in the
transportation table
◼ To see what would happen to total
shipping costs if one unit of the product
were tentatively shipped on an unused
route
◼ There are five steps in the process

© 2009 Prentice-Hall, Inc. 10 – 22

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
1. Select an unused square to evaluate
2. Beginning at this square, trace a closed path
back to the original square via squares that are
currently being used with only horizontal or
vertical moves allowed
3. Beginning with a plus (+) sign at the unused
square, place alternate minus (–) signs and plus
signs on each corner square of the closed path
just traced

© 2009 Prentice-Hall, Inc. 10 – 23

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
4. Calculate an improvement index by adding
together the unit cost figures found in each
square containing a plus sign and then
subtracting the unit costs in each square
containing a minus sign
5. Repeat steps 1 to 4 until an improvement index
has been calculated for all unused squares. If all
indices computed are greater than or equal to
zero, an optimal solution has been reached. If
not, it is possible to improve the current solution
and decrease total shipping costs.

© 2009 Prentice-Hall, Inc. 10 – 24

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
◼ For the Executive Furniture Corporation data

Steps 1 and 2. Beginning with Des Moines–Boston

route we trace a closed path using only currently
occupied squares, alternately placing plus and
minus signs in the corners of the path
◼ In a closed path, only squares currently used for
shipping can be used in turning corners
◼ Only one closed route is possible for each square
we wish to test

© 2009 Prentice-Hall, Inc. 10 – 25

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
Step 3. We want to test the cost-effectiveness of the
Des Moines–Boston shipping route so we pretend
we are shipping one desk from Des Moines to
Boston and put a plus in that box
◼ But if we ship one more unit out of Des Moines
we will be sending out 101 units
◼ Since the Des Moines factory capacity is only
100, we must ship fewer desks from Des Moines
to Albuquerque so we place a minus sign in that
box
◼ But that leaves Albuquerque one unit short so we
must increase the shipment from Evansville to
Albuquerque by one unit and so on until we
complete the entire closed path
© 2009 Prentice-Hall, Inc. 10 – 26
 Five Steps to Test Unused Squares
with the Stepping-Stone Method
◼ Evaluating the unused Warehouse A Warehouse B

$5 $4
Des Moines–Boston Factory
100
D
shipping route – +
Factory
+ $8 – $4
E 200 100

TO FACTORY
ALBUQUERQUE BOSTON CLEVELAND
FROM CAPACITY
$5 $4 $3
DES MOINES 100 100

$8 $4 $3
EVANSVILLE 200 100 300

$9 $7 $5
FORT LAUDERDALE 100 200 300

WAREHOUSE
300 200 200 700 Table 10.4
REQUIREMENTS
© 2009 Prentice-Hall, Inc. 10 – 27
 Five Steps to Test Unused Squares
with the Stepping-Stone Method
◼ Evaluating the unused Warehouse A Warehouse B

$5 $4
Des Moines–Boston Factory
99
100 1
D
shipping route – +
Factory 201 + $8 99 – $4
E 200 100

TO FACTORY
ALBUQUERQUE BOSTON CLEVELAND
FROM CAPACITY
$5 $4 $3
DES MOINES 100 100

$8 $4 $3
EVANSVILLE 200 100 300

$9 $7 $5
FORT LAUDERDALE 100 200 300

WAREHOUSE
300 200 200 700 Table 10.4
REQUIREMENTS
© 2009 Prentice-Hall, Inc. 10 – 28
 Five Steps to Test Unused Squares
with the Stepping-Stone Method
◼ Evaluating the unused Warehouse A Warehouse B

$5 $4
Des Moines–Boston Factory
99
100 1
D
shipping route – +
Factory 201 + $8 99 – $4
E 200 100

TO FACTORY
ALBUQUERQUE BOSTON CLEVELAND
FROM Result
CAPACITY of Proposed
$5 $4 $3 Shift in Allocation
DES MOINES 100 100
= 1 x $4
$8 $4 $3 – 1 x $5
EVANSVILLE 200 100 300 + 1 x $8
– 1 x $4 = +$3
$9 $7 $5
FORT LAUDERDALE 100 200 300

WAREHOUSE
300 200 200 700 Table 10.4
REQUIREMENTS
© 2009 Prentice-Hall, Inc. 10 – 29
 Five Steps to Test Unused Squares
with the Stepping-Stone Method
Step 4. We can now compute an improvement index
(Iij) for the Des Moines–Boston route
◼ We add the costs in the squares with plus signs
and subtract the costs in the squares with minus
signs
Des Moines–
Boston index = IDB = +$4 – $5 + $5 – $4 = + $3

◼ This means for every desk shipped via the Des

Moines–Boston route, total transportation cost
will increase by $3 over their current level

© 2009 Prentice-Hall, Inc. 10 – 30

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
Step 5. We can now examine the Des Moines–
Cleveland unused route which is slightly more
difficult to draw
◼ Again we can only turn corners at squares that
represent existing routes
◼ We must pass through the Evansville–Cleveland
square but we can not turn there or put a + or –
sign
◼ The closed path we will use is
+ DC – DA + EA – EB + FB – FC

© 2009 Prentice-Hall, Inc. 10 – 31

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
◼ Evaluating the Des Moines–Cleveland shipping
route
TO FACTORY
ALBUQUERQUE BOSTON CLEVELAND
FROM CAPACITY
$5 $4 Start $3
DES MOINES 100 100
– +
$8 $4 $3
EVANSVILLE 200 100 300
+ –
$9 $7 $5
FORT LAUDERDALE 100 200 300
+ –
WAREHOUSE
300 200 200 700
REQUIREMENTS

Table 10.5

Des Moines–Cleveland
improvement index = IDC = + $3 – $5 + $8 – $4 + $7 – $5 = + $4

© 2009 Prentice-Hall, Inc. 10 – 32

 Five Steps to Test Unused Squares
with the Stepping-Stone Method
◼ Opening the Des Moines–Cleveland route will not
lower our total shipping costs
◼ Evaluating the other two routes we find
Evansville-
Cleveland index = IEC = + $3 – $4 + $7 – $5 = + $1
◼ The closed path is
+ EC – EB + FB – FC
Fort Lauderdale–
Albuquerque index = IFA = + $9 – $7 + $4 – $8 = – $2
◼ The closed path is
+ FA – FB + EB – EA
◼ So opening the Fort Lauderdale-Albuquerque
route will lower our total transportation costs
© 2009 Prentice-Hall, Inc. 10 – 33
 Obtaining an Improved Solution

◼ In the Executive Furniture problem there is only

one unused route with a negative index (Fort
Lauderdale-Albuquerque)
◼ If there was more than one route with a negative
index, we would choose the one with the largest
improvement
◼ We now want to ship the maximum allowable
number of units on the new route
◼ The quantity to ship is found by referring to the
closed path of plus and minus signs for the new
route and selecting the smallest number found in
those squares containing minus signs

© 2009 Prentice-Hall, Inc. 10 – 34

 Obtaining an Improved Solution

◼ To obtain a new solution, that number is added to

all squares on the closed path with plus signs
and subtracted from all squares the closed path
with minus signs
◼ All other squares are unchanged
◼ In this case, the maximum number that can be
shipped is 100 desks as this is the smallest value
in a box with a negative sign (FB route)
◼ We add 100 units to the FA and EB routes and
subtract 100 from FB and EA routes
◼ This leaves balanced rows and columns and an
improved solution

© 2009 Prentice-Hall, Inc. 10 – 35

 Obtaining an Improved Solution

◼ Stepping-stone path used to evaluate route FA

TO FACTORY
A B C
FROM CAPACITY
$5 $4 $3
D 100 100

$8 $4 $3
E 200 100 300
– +
$9 $7 $5
F 100 200 300
+ –
WAREHOUSE
300 200 200 700
REQUIREMENTS

Table 10.6

© 2009 Prentice-Hall, Inc. 10 – 36

 Obtaining an Improved Solution
◼ Second solution to the Executive Furniture
problem
TO FACTORY
A B C
FROM CAPACITY
$5 $4 $3
D 100 100

$8 $4 $3
E 100 200 300

$9 $7 $5
F 100 200 300

WAREHOUSE
300 200 200 700
REQUIREMENTS

Table 10.7

◼ Total shipping costs have been reduced by (100

units) x ($2 saved per unit) and now equals $4,000
© 2009 Prentice-Hall, Inc. 10 – 37
 Obtaining an Improved Solution
◼ This second solution may or may not be optimal
◼ To determine whether further improvement is
possible, we return to the first five steps to test
each square that is now unused
◼ The four new improvement indices are

D to B = IDB = + $4 – $5 + $8 – $4 = + $3
(closed path: + DB – DA + EA – EB)
D to C = IDC = + $3 – $5 + $9 – $5 = + $2
(closed path: + DC – DA + FA – FC)
E to C = IEC = + $3 – $8 + $9 – $5 = – $1
(closed path: + EC – EA + FA – FC)
F to B = IFB = + $7 – $4 + $8 – $9 = + $2
(closed path: + FB – EB + EA – FA)
© 2009 Prentice-Hall, Inc. 10 – 38
 Obtaining an Improved Solution
◼ Path to evaluate for the EC route

TO FACTORY
A B C
FROM CAPACITY
$5 $4 $3
D 100 100

$8 $4 Start $3
E 100 200 300
– +
$9 $7 $5
F 100 200 300
+ –
WAREHOUSE
300 200 200 700
REQUIREMENTS

Table 10.8

◼ An improvement can be made by shipping the

maximum allowable number of units from E to C
© 2009 Prentice-Hall, Inc. 10 – 39
 Obtaining an Improved Solution
◼ Total cost of third solution

ROUTE
DESKS PER UNIT TOTAL
FROM TO SHIPPED x COST ($) = COST ($)
D A 100 5 500
E B 200 4 800
E C 100 3 300
F A 200 9 1,800
F C 100 5 500
3,900

© 2009 Prentice-Hall, Inc. 10 – 40

 Obtaining an Improved Solution
◼ Third and optimal solution

TO FACTORY
A B C
FROM CAPACITY
$5 $4 $3
D 100 100

$8 $4 $3
E 200 100 300

$9 $7 $5
F 200 100 300

WAREHOUSE
300 200 200 700
REQUIREMENTS

Table 10.9

© 2009 Prentice-Hall, Inc. 10 – 41

 Obtaining an Improved Solution
◼ This solution is optimal as the improvement
indices that can be computed are all greater than
or equal to zero

D to B = IDB = + $4 – $5 + $9 – $5 + $3 – $4 = + $2
(closed path: + DB – DA + FA – FC + EC – EB)
D to C = IDC = + $3 – $5 + $9 – $5 = + $2
(closed path: + DC – DA + FA – FC)
E to A = IEA = + $8 – $9 + $5 – $3 = + $1
(closed path: + EA – FA + FC – EC)
F to B = IFB = + $7 – $5 + $3 – $4 = + $1
(closed path: + FB – FC + EC – EB)

© 2009 Prentice-Hall, Inc. 10 – 42

 Summary of Steps in Transportation
Algorithm (Minimization)
1. Set up a balanced transportation table
2. Develop initial solution using the northwest
corner method
3. Calculate an improvement index for each empty
cell using the stepping-stone method. If
improvement indices are all nonnegative, stop as
the optimal solution has been found. If any index
is negative, continue to step 4.
4. Select the cell with the improvement index
indicating the greatest decrease in cost. Fill this
cell using the stepping-stone path and go to step
3.

© 2009 Prentice-Hall, Inc. 10 – 43

 MODI Method
◼ The MODI (modified distribution) method allows
us to compute improvement indices quickly for
each unused square without drawing all of the
closed paths
◼ Because of this, it can often provide considerable
time savings over the stepping-stone method for
solving transportation problems
◼ If there is a negative improvement index, then only
one stepping-stone path must be found
◼ This is used in the same manner as before to
obtain an improved solution

© 2009 Prentice-Hall, Inc. 10 – 44

 How to Use the MODI Approach

◼ In applying the MODI method, we begin with an

initial solution obtained by using the northwest
corner rule
◼ We now compute a value for each row (call the
values R1, R2, R3 if there are three rows) and for
each column (K1, K2, K3) in the transportation table
◼ In general we let

Ri = value for assigned row i

Kj = value for assigned column j
Cij = cost in square ij (cost of shipping from
source i to destination j)

© 2009 Prentice-Hall, Inc. 10 – 45

 Five Steps in the MODI Method to
Test Unused Squares
1. Compute the values for each row and column, set
Ri + Kj = Cij
but only for those squares that are currently used
or occupied
2. After all equations have been written, set R1 = 0
3. Solve the system of equations for R and K values
4. Compute the improvement index for each unused
square by the formula
Improvement Index (Iij) = Cij – Ri – Kj
5. Select the best negative index and proceed to
solve the problem as you did using the stepping-
stone method
© 2009 Prentice-Hall, Inc. 10 – 46
 Solving the Executive Furniture
Corporation Problem with MODI
◼ The initial northwest corner solution is repeated
in Table 10.10
◼ Note that to use the MODI method we have added
the Ris (rows) and Kjs (columns)
Kj K1 K2 K3
TO FACTORY
Ri A B C
FROM CAPACITY
$5 $4 $3
R1 D 100 100

$8 $4 $3
R2 E 200 100 300

$9 $7 $5
R3 F 100 200 300

WAREHOUSE
300 200 200 700
REQUIREMENTS

Table 10.10
© 2009 Prentice-Hall, Inc. 10 – 47
 Solving the Executive Furniture
Corporation Problem with MODI
◼ The first step is to set up an equation for each
occupied square
◼ By setting R1 = 0 we can easily solve for K1, R2, K2,
R3, and K3

(1) R1 + K1 = 5 0 + K1 = 5 K1 = 5
(2) R2 + K1 = 8 R2 + 5 = 8 R2 = 3
(3) R2 + K2 = 4 3 + K2 = 4 K2 = 1
(4) R3 + K2 = 7 R3 + 1 = 7 R3 = 6
(5) R3 + K3 = 5 6 + K3 = 5 K3 = –1

© 2009 Prentice-Hall, Inc. 10 – 48

 Solving the Executive Furniture
Corporation Problem with MODI
◼ The next step is to compute the improvement
index for each unused cell using the formula
Improvement index (Iij) = Cij – Ri – Kj
◼ We have

Des Moines- IDB = C12 – R1 – K2 = 4 – 0 – 1

Boston index = +$3
Des Moines- IDC = C13 – R1 – K3 = 3 – 0 – (–1)
Cleveland index = +$4
Evansville- IEC = C23 – R2 – K3 = 3 – 3 – (–1)
Cleveland index = +$1
Fort Lauderdale- IFA = C31 – R3 – K1 = 9 – 6 – 5
Albuquerque index = –$2

© 2009 Prentice-Hall, Inc. 10 – 49

 Solving the Executive Furniture
Corporation Problem with MODI
◼ The steps we follow to develop an improved
solution after the improvement indices have been
computed are
1. Beginning at the square with the best
improvement index, trace a closed path back
to the original square via squares that are
currently being used
2. Beginning with a plus sign at the unused
square, place alternate minus signs and plus
signs on each corner square of the closed
path just traced

© 2009 Prentice-Hall, Inc. 10 – 50

 Solving the Executive Furniture
Corporation Problem with MODI
3. Select the smallest quantity found in those
squares containing the minus signs and add
that number to all squares on the closed path
with plus signs; subtract the number from
squares with minus signs
4. Compute new improvement indices for this
new solution using the MODI method
◼ Note that new Ri and Kj values must be
calculated
◼ Follow this procedure for the second and third
solutions

© 2009 Prentice-Hall, Inc. 10 – 51

 Assignment Model Approach
◼ The second special-purpose LP algorithm is the
assignment method
◼ Each assignment problem has associated with it
a table, or matrix
◼ Generally, the rows contain the objects or people
we wish to assign, and the columns comprise the
tasks or things we want them assigned to
◼ The numbers in the table are the costs associated
with each particular assignment
◼ An assignment problem can be viewed as a
transportation problem in which the capacity
from each source is 1 and the demand at each
destination is 1
© 2009 Prentice-Hall, Inc. 10 – 52
 Assignment Model Approach
◼ The Fix-It Shop has three rush projects to repair
◼ They have three repair persons with different
talents and abilities
◼ The owner has estimates of wage costs for each
worker for each project
◼ The owner’s objective is to assign the three
project to the workers in a way that will result in
the lowest cost to the shop
◼ Each project will be assigned exclusively to one
worker

© 2009 Prentice-Hall, Inc. 10 – 53

 Assignment Model Approach
◼ Estimated project repair costs for the Fix-It shop
assignment problem

PROJECT

PERSON 1 2 3

Adams $11 $14 $6

Brown 8 10 11

Cooper 9 12 7

Table 10.26

© 2009 Prentice-Hall, Inc. 10 – 54

 Assignment Model Approach
◼ Summary of Fix-It Shop assignment alternatives
and costs

PRODUCT ASSIGNMENT
LABOR TOTAL
1 2 3
COSTS ($) COSTS ($)
Adams Brown Cooper 11 + 10 + 7 28
Adams Cooper Brown 11 + 12 + 11 34
Brown Adams Cooper 8 + 14 + 7 29
Brown Cooper Adams 8 + 12 + 6 26
Cooper Adams Brown 9 + 14 + 11 34
Cooper Brown Adams 9 + 10 + 6 25

Table 10.27

© 2009 Prentice-Hall, Inc. 10 – 55

 The Hungarian Method
(Flood’s Technique)
◼ The Hungarian method is an efficient method of
finding the optimal solution to an assignment
problem without having to make direct
comparisons of every option
◼ It operates on the principle of matrix reduction
◼ By subtracting and adding appropriate numbers
in the cost table or matrix, we can reduce the
problem to a matrix of opportunity costs
◼ Opportunity costs show the relative penalty
associated with assigning any person to a project
as opposed to making the best assignment
◼ We want to make assignment so that the
opportunity cost for each assignment is zero
© 2009 Prentice-Hall, Inc. 10 – 56
Three Steps of the Assignment Method

1. Find the opportunity cost table by:

(a) Subtracting the smallest number in each row
of the original cost table or matrix from every
number in that row
(b) Then subtracting the smallest number in
each column of the table obtained in part (a)
from every number in that column
2. Test the table resulting from step 1 to see
whether an optimal assignment can be made by
drawing the minimum number of vertical and
horizontal straight lines necessary to cover all
the zeros in the table. If the number of lines is
less than the number of rows or columns,
proceed to step 3.
© 2009 Prentice-Hall, Inc. 10 – 57
Three Steps of the Assignment Method

3. Revise the present opportunity cost table by

subtracting the smallest number not covered by
a line from every other uncovered number. This
same number is also added to any number(s)
lying at the intersection of horizontal and vertical
lines. Return to step 2 and continue the cycle
until an optimal assignment is possible.

© 2009 Prentice-Hall, Inc. 10 – 58

 Steps in the Assignment Method

Not
Set up cost table for problem Revise opportunity cost table
optimal
in two steps:
Step 1 (a) Subtract the smallest
number not covered by a line
from itself and every other
Find opportunity cost
uncovered number
(a) Subtract smallest number in
(b) add this number at every
each row from every number
intersection of any two lines
in that row, then
(b) subtract smallest number in
each column from every
number in that column Optimal solution at zero
locations. Systematically make
final assignments.
Step 2
(a) Check each row and column
for a unique zero and make the
Test opportunity cost table to first assignment in that row or
see if optimal assignments are column
possible by drawing the
minimum possible lines on (b) Eliminate that row and
columns and/or rows such that Optimal column and search for another
all zeros are covered unique zero. Make that
assignment and proceed in a
like manner.
Figure 10.3
© 2009 Prentice-Hall, Inc. 10 – 59
 The Hungarian Method
(Flood’s Technique)

◼ Step 1: Find the opportunity cost table

◼ We can compute row opportunity costs and
column opportunity costs
◼ What we need is the total opportunity cost
◼ We derive this by taking the row opportunity
costs and subtract the smallest number in that
column from each number in that column

© 2009 Prentice-Hall, Inc. 10 – 60

 The Hungarian Method
(Flood’s Technique)
◼ Cost of each person- ◼ Row opportunity
project assignment cost table

PROJECT PROJECT
PERSON 1 2 3 PERSON 1 2 3

Adams $11 $14 $6 Adams $5 $8 $0

Brown 8 10 11 Brown 0 2 3

Cooper 9 12 7 Cooper 2 5 0

Table 10.28 Table 10.29

◼ The opportunity cost of assigning Cooper to

project 2 is $12 – $7 = $5
© 2009 Prentice-Hall, Inc. 10 – 61
 The Hungarian Method
(Flood’s Technique)
◼ We derive the total opportunity costs by taking
the costs in Table 29 and subtract the smallest
number in each column from each number in that
column
◼ Row opportunity ◼ Total opportunity
cost table cost table
PROJECT PROJECT
PERSON 1 2 3 PERSON 1 2 3

Adams $5 $8 $0 Adams $5 $6 $0

Brown 0 2 3 Brown 0 0 3

Cooper 2 5 0 Cooper 2 3 0

Table 10.29 Table 10.30

© 2009 Prentice-Hall, Inc. 10 – 62
 The Hungarian Method
(Flood’s Technique)
◼ Step 2: Test for the optimal assignment
◼ We want to assign workers to projects in such
a way that the total labor costs are at a
minimum
◼ We would like to have a total assigned
opportunity cost of zero
◼ The test to determine if we have reached an
optimal solution is simple
◼ We find the minimum number of straight lines
necessary to cover all the zeros in the table
◼ If the number of lines equals the number of
rows or columns, an optimal solution has been
reached
© 2009 Prentice-Hall, Inc. 10 – 63
 The Hungarian Method
(Flood’s Technique)
◼ Test for optimal solution

PROJECT
PERSON 1 2 3

Adams $5 $6 $0

Brown 0 0 3 Covering line 1

Cooper 2 3 0

Table 10.31 Covering line 2

◼ This requires only two lines to cover the zeros so

the solution is not optimal

© 2009 Prentice-Hall, Inc. 10 – 64

 The Hungarian Method
(Flood’s Technique)
◼ Step 3: Revise the opportunity-cost table
◼ We subtract the smallest number not covered
by a line from all numbers not covered by a
straight line
◼ The same number is added to every number
lying at the intersection of any two lines
◼ We then return to step 2 to test this new table

© 2009 Prentice-Hall, Inc. 10 – 65

 The Hungarian Method
(Flood’s Technique)
◼ Revised opportunity cost table (derived by
subtracting 2 from each cell not covered by a line
and adding 2 to the cell at the intersection of the
lines)
PROJECT
PERSON 1 2 3

Adams $3 $4 $0

Brown 0 0 5

Cooper 0 1 0

Table 10.32

© 2009 Prentice-Hall, Inc. 10 – 66

 The Hungarian Method
(Flood’s Technique)
◼ Optimality test on the revised opportunity cost
table
PROJECT
PERSON 1 2 3

Adams $3 $4 $0

Brown 0 0 5 Covering line 2

Cooper 0 1 0

Table 10.33 Covering line 1 Covering line 3

◼ This requires three lines to cover the zeros so the

solution is optimal
© 2009 Prentice-Hall, Inc. 10 – 67
 Making the Final Assignment
◼ The optimal assignment is Adams to project 3,
Brown to project 2, and Cooper to project 1
◼ But this is a simple problem
◼ For larger problems one approach to making the
final assignment is to select a row or column that
contains only one zero
◼ Make the assignment to that cell and rule out its
row and column
◼ Follow this same approach for all the remaining
cells

© 2009 Prentice-Hall, Inc. 10 – 68

 Making the Final Assignment
◼ Total labor costs of this assignment are

ASSIGNMENT COST ($)

Adams to project 3 6

Brown to project 2 10

Cooper to project 1 9

Total cost 25

© 2009 Prentice-Hall, Inc. 10 – 69

 Making the Final Assignment
◼ Making the final assignments

(A) FIRST (B) SECOND (C) THIRD

ASSIGNMENT ASSIGNMENT ASSIGNMENT

1 2 3 1 2 3 1 2 3

Adams 3 4 0 Adams 3 4 0 Adams 3 4 0

Brown 0 0 5 Brown 0 0 5 Brown 0 0 5

Cooper 0 1 0 Cooper 0 1 0 Cooper 0 1 0

Table 10.34

© 2009 Prentice-Hall, Inc. 10 – 70

Unbalanced Assignment Problems

◼ Often the number of people or objects to be

assigned does not equal the number of tasks or
clients or machines listed in the columns, and the
problem is unbalanced
◼ When this occurs, and there are more rows than
columns, simply add a dummy column or task
◼ If the number of tasks exceeds the number of
people available, we add a dummy row
◼ Since the dummy task or person is nonexistent,
we enter zeros in its row or column as the cost or
time estimate

© 2009 Prentice-Hall, Inc. 10 – 71

Unbalanced Assignment Problems
◼ The Fix-It Shop has another worker available
◼ The shop owner still has the same basic problem
of assigning workers to projects
◼ But the problem now needs a dummy column to
balance the four workers and three projects
PROJECT
PERSON 1 2 3 DUMMY
Adams $11 $14 $6 $0
Brown 8 10 11 0
Cooper 9 12 7 0
Davis 10 13 8 0

Table 10.35

© 2009 Prentice-Hall, Inc. 10 – 72