The transportation problem arises frequently in planning for the distribution of goods and service

from several supply locations to several demand locations. Typically, the quantity of goods
available at each supply location (origin) is limited and the quantity of goods needed at each
several demand location (destinations) is known.

The usual objective in a transportation problem is to minimize the cost of shipping goods from
the origins to the destinations.

Definition Transportation Model:

Transportation models deals with what happens to the effectiveness function when we
associated each of the member of origins with each of a possibly different number of
destinations.

The general problem is represented by the following network.

Sources Destination

C11:X11
A1 1 1 B1

Units of supply A2 2 2 B2 Units of demand

Am m n Bn

Cmn:Xmn

There are m sources and n destinations, each represented by a node. The arc represents the routes
linking the sources and the destinations. Arc (I,j) joining sources I to destination J carries two
piece of information: The transportation cost per unit C ij and amount shipped Xij. The amount of
supply at source I is Ai and the amount of demand at destination J is Bj.

The objective of the model is to determine the unknowns X ij that will minimize the total
transportation cost while satisfying the supply and demand restrictions.
Matrix Terminology:
Simplex algorithm can be used solve linear programming model. But this algorithm is laborious.
For this reason, whenever possible we try to simplify calculations.

Transportation problems are expressed in matrix form. The matrix consists of squares called
“cells”, which when stacked form “columns” vertically and “rows” horizontally. The cell located
at the intersection of a row and column is designed by its row and column headings. Thus the
cell located at the intersection of row A and column B is called cell (A,B).Units costs are placed
in each cells.

Methods of obtaining initial basic feasible solution:

There are several methods for finding an initial basic feasible solution, out of which three are
very important and these are

1. North- West Corner Rule

2. Least Cost Method
3. Vogel’s Approximation Method
Problem:A dairy firm has three plants located throughout a state. Daily milk production at
each point is as follows:

Plan
Capacity(million liters)
t
1 6
2 1
3 10
Each day firm must fulfill the needs of its four distribution centers. Minimum requirements at
each center are as follows:

Distribution
Requirements (million liters)
Center
1 7
2 5
3 3
4 2
Cost of shipping one million liters of milk from each plant to each distribution center is given in
the following table in hundred TK.

Plan Distribution Center

t
1 2 3 4
1 2 3 11 7
2 1 0 6 1
3 5 8 15 9
Find initial basic feasible solution by

1. North – West Corner Rule

2. Least Cost Method
3. VAM
Initial Basic Feasible solution by North-West corner rule:

Supply

Distribution Center
Plant

1 2 3 4
6
1 2 3 11 7

1
2 1 0 6 1

10
3 5 8 15 9

REQ 7 5 3 2

Total cost=2 ×6+1 ×1+8 × 5+15 ×3+9 × 2=116

Least Cost Method:

Supply

Distribution Center
Plant

1 2 3 4
6
1 2 3 11 7

1
2 1 0 6 1

10
3 5 8 15 9

REQ 7 5 3 2

Total cost=2 ×6+ 0× 1+ 5× 1+8 × 4+15 ×3+ 9× 2=112

VAM: Total cost=2 ×1+3 ×5+1 ×1+5 ×6 +15× 3+9 ×1=102

Supply Diff

Distribution Center
Plant

1 2 3 4
6 (1)(1)(5)
1 2(1) 3(5) 11 7

1 (1)--
2 1 0 6 1(1)

10 (3)(3)(4)
3 5(6) 8 15(3) 9(1)

REQ 7 5 3 2

Diff (1)(3)(3) (3)(5)- (5)(4)(4) (6)(2)(2)

 1. Stepping – Stone Method:

STEP #01: m+n-1=3+4-1=6

Distribution Center
Plant

1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6 1(1)

3 5(7) 8 15(2) 9(1)

Total Cost:3*5+11*1+1*1+5*7+15*2+9*1=101

I(1,3)=+11-15+5-2=-1

I(1,4)=+7-9+5-2=+1

I(2,1)=+1-1+9-5=+4

I(2,2)=-3+2-5+9-1=+2

I(2,3)=+6-1+9-15=-1

I(3,2)=+8-3+2-5=+2
Second Step:

Distribution Center
Plant

1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6(1) 1

3 5(7) 8 15(1) 9(2)

Total Cost: 3*5+11*1+6*1+6*1+15*1+9*2+5*7=100

I(1,1)=+2-11+15-5=+1

I(1,4)=+1

I(2,1)=+4

I(2,2)=+1

I(2,3)=-1

I(3,2)=+1
Step#3

Distribution Center
Plant

1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6(1) 1

3 5(7) 8 15(1) 9(2)

I(1,1)=

I(1,4)=

I(2,1)=

I(2,2)=

I(2,4)=

I(3,2)=

Distribution Center
Plant

1 2 3 4
Step#1
1 2 3(5) 11(1) 7

2 1 0 6 1(1)

3 5(7) 8 15(2) 9(1)

For the stepping stone method to be applied to a transportation problem one rule about the
number of shipping routes being must first observed.

“The number of occupied routes must always be equal to one less than the sum of the number of
rows plus the number of columns”

For our problem, m=row, n= column then m+n-1= 3+4-1=6

I(1,3)=+11-15+5-2=-1

I(1,4)=+7-9+5-2=+1

I(2,1)=+1-1+9-5=+4

I(2,2)=+2

I(2,3)=-1

I(3,2)=+8-3+2-5=+2

Total cost: 3 ×5+11 × 1+ 1×1+15 × 2+ 9 ×1+5 ×7=101

Distribution Center
Plant
Step#2
1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6(1) 1

3 5(7) 8 15(1) 9(2)

I(1,1)=+2-11+15-5=+1

I(1,4)=+7-9+15-11=+2

I(2,1)=+4

I(2,2)=+1

I(2,3)=-1

I(3,2)=+8-15+11-3=+1

Total Cost:3∗5+11∗1+ 6∗1+5∗7+15∗1+9∗2=100

Distribution Center
Plant

Step#3 1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6(1) 1

3 5(7) 8 15(1) 9(2)

MODI:
We first set up the cost matrix containing the cost associated with the cell for which allocations
have been made. We enter a set of numbers Vj across the top of the matrix and a set of numbers
Ui across the left side so that their sums equals the costs entered.

Distributio
n Center
Plant
V1 V2 V3 V4
1 2 3 4
U
1 2 3
1
U
2 1
2
U
3 5 15 9
3

Now,

U1+V1=2

U1+V2=3

U2+V4=1

U3+V1=5

U3+V3=15

U3+V4=9

Let,

V1=0, then, U1=2

V2=1 U3=5, U2=-3

V3=10
V4=4

Therefore the matrix can be written as

Distributio
n Center
Plant
0 1 10 4
1 2 3 4

1 2 2 3

2 -3 1

3 5 5 15 9

Now we fill up the vacant cells with the sums of Ui+Vj

Distributio
n Center
Plant
0 1 10 4
1 2 3 4

1 2 12 6

2 -3 -3 -2 7

3 5 6

Now we subtract the cell values of the matrix from the original cost matrix
 Distributio
n Center
Plant
0 1 10 4
1 2 3 4

1 2 11-12=-1 7-6=1

2 -3 1+3=4 0+2=2 6-7=-1

3 5 8-6=2

Here from the above cell evaluation matrix we can see that two cells are with same
negative entry. So we choose the cell (1,3).

We trace a path in this matrix consisting of a series of horizontal and vertical lines.

Distribution Center
Plant

1 2 3 4

1 2(1) 3(5) 11 7

2 1 0 6 1(1)

3 5(6) 8 15(3) 9(1)

Now we make a new allocation in the identified cell by entering the smallest
allocation on the path that has been assigned a (-) negative sign
 Distribution Center
Plant

1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6 1(1)

3 5(7) 8 15(2) 9(1)

Now, the total cost for transportation

=(3*5+11*1+1*1+5*7+15*2+9*1)=101

MODI method:
We first set up the cost matrix containing the cost associated with the cell for which allocations
have been made.

Here , m+n-1=3+4-1=6. We enter a set of numbers v j across the top of the matrix and a set of
numbers u j across the left side so that their sum equals the costs entered.
 Distribution Center
Plant

v1 v2 v3 v4

u1 2 3

u2 1

u3 5 15 9

Now,

U1+V1=2

U1+V2=3

U2+V4=1

U3+V1=5

U3+V3=15

U3+V4=9

Let, V1=0, then U1=2

V2=1 U2=-3

V3= 10 U3=5

V4=4

Therefore the matrix

can be written as

0 1 10 4

2 2 3

-3 1

5 5 15 9
Now we fill up the vacant cells with the sum of Uj+Vj

0 1 10 4

2 12 6

-3 -3 -2 7

5 6

Now we subtract the cells values of the matrix from the original cost matrix
 0 1 10 4

2 11-12=-1 7-6=1

-3 1+3=4 0+2=2 6-7=-1

5 8-6=2

Here from the above cell evolution matrix we can see that cells are same negative entry. So we
choose the cell (1,3).We trace a path in this matrix consisting of a series of alternative horizontal
and vertical lines.

Distribution Center
Plant

1 2 3 4

1 2(1) 3(5) 11 7

2 1 0 6 1(1)

3 5(6) 8 15(3) 9(1)

Now we make a new allocation in the identified cell by entering the smallest allocation on the
path that has been assigned a negative sign
 Distribution Center
Plant

1 2 3 4

1 2 3(5) 11(1) 7

2 1 0 6 1(1)

3 5(7) 8 15(2) 9(1)

Total cost: 3*5+11*1+1*1+5*7+15*2+9*1=101