TRANSPORTATION PROBLEMS

• Transportation problem is a special kind of LPP in

which goods are transported from set of sources to a
set of destination subject to the supply & demand of
the sources & destination , respectively, such that
the total cost of transportation is minimized.
GENERALISED FORMAT OF TRANSPORTATION PROBLEM

DESTINATION -j
1 2 j n SUPPLY

1 C11 C12 C1j C1n a1

2 C21 C22 C2j C2n a2
SOURCE
I I Ci1 Ci2 Cij Cin ai

m Cm1 Cm2 Cmj Cmn am

DEMAND b1 b2 bj bn
 TRANSPORTATION PROBLEMS
EXAMPLES OF TRANSPORTATION PROBLEMS

SOURCE DESTINATION COMMODITY OBJECTIVE

MINIMIZING TOTAL
PLANTS MARKETS FINISHED GOODS COST OF SHIPPING

FINISHED GOODS MINIMIZING TOTAL

PLANTS WAREHOUSE FINISHED GOODS COST OF SHIPPING

FINISHED GOODS MINIMIZING TOTAL

WAREHOUSE MARKETS FINISHED GOODS COST OF SHIPPING

MINIMIZING TOTAL
SUPPLIERS PLANTS RAW MATERIALS COST OF SHIPPING

RAW MATERIAL MINIMIZING TOTAL

SUPPLIERS WAREHOUSE RAW MATERIALS COST OF SHIPPING

RAW MATERIAL MINIMIZING TOTAL

WAREHOUSE PLANTS RAW MATERIALS COST OF SHIPPING
 TRANSPORTATION PROBLEMS
a1 S1 D1 b1

a2 S2 D2 b2

a3 S3 D3 b3

Dj bj
ai Si

Dn bn
am Sm
 TRANSPORTATION PROBLEMS
• KEY WORDS—
• The Origin or Source of a Transportation Problem
is a location from which shipments are dispatched.
• The Destination of a Transportation Problem is the
location to which shipments are transported.
• The Unit Transportation Cost is the cost of
transporting one unit of the consignment from an
Origin to a Destination.
• An Unbalanced Transportation Problem is a
Transportation problem where the total availability
 TRANSPORTATION PROBLEMS
• at the Origin is different from the total requirement
at the Destinations.
• A Degenerate Transportation Problem with m
Origins & n Destinations has basic feasible
solutions with fewer than m+n-1 positive basic
variables.
 TRANSPORTATION PROBLEMS
Step 1 –
FINDING THE INITIAL BASIC SOLUTION—
• 1. The North-West Corner Cell Method.
• 2. Least Cost Method.
• 3. Vogel’s Approximation Method ( VAM) / Penalty
Method.
Step 2 –
OPTIMIZING THE BASIC FEASIBLE SOLUTION
APPLYING
MODI OR U-V METHOD.
 TRANSPORTATION PROBLEMS
• FINDING THE INITIAL BASIC SOLUTION—
• 1. The North-West Corner Cell Method.—Allocations
are made starting from North –West ( Upper – Left )
corner completely disregarding the Transportation Cost.
• 2. Least Cost Method.—Allocations are made in the cells
where Cij is minimum , after considering the demand &
supply limitations.
• 3. Vogel’s Approximation Method –
• A- Determine the penalty for each row & column. They are
calculated by subtracting the lowest cost element in that row
/ column from the next lowest cost element in the same
row / column.
 TRANSPORTATION PROBLEMS
• B - We identify the row or column with the largest
penalty amongst all rows & column. If the penalties
are same for two or more rows / columns then select
topmost row first & leftmost column first.
• C—Allocate Xij as high as possible depending upon
supply & demand constraint to the cell having least
Cij in the row / column where penalty is highest.
• D– Do the further iterations by applying above steps
& depending upon the balance allocations for
supply / demand constraints.
 TRANSPORTATION PROBLEMS
• OPTIMIZING THE BASIC FEASIBLE
SOLUTION APPLYING MODI OR U-V
METHOD.—
• 1.Start with initial basic solution.
• 2.Check for degeneracy.
• 2. A.--- If Yes – remove degeneracy by adding
small value to required number of cells.
• 2. B.– If No –Assign ‘0’ to first row on the right
margin.
• 3. Calculate index values for all rows & column.
J,Vj = Cij – Ui & i, Ui = Cij – Vj.
 TRANSPORTATION PROBLEMS
• 4. Using all Ui & Vj , calculate opprtunty cost for
each empty cells. i.e. = Ui + Vj – Cij
• 5. If opportunity cost is negative or zero then
solution is optimal.
• 6. If it is positive then do the reallocation with the
close loop method.
• 7. Again check for optimality. ( Many iterations
before reaching to a final solution are possible. )
 TRANSPORTATION PROBLEMS
• EX.1—Obtain basic feasible solution by N-W
corner rule , Least Cost Method & VAM. Find the
optimal solution by MODI / UV method. Matrix is
as follows ---
DESTINATION

1 2 3 4 SUPPLY
1 3 1 7 4 300
SOURCE 2 2 6 5 9 400
3 8 3 3 2 500
DEMAND 250 350 400 200 1200
 TRANSPORTATION PROBLEMS
DESTINATION

1 2 3 4 SUPPLY
1 3 1 7 4 300
SOURCE 2 2 6 5 9 400
3 8 3 3 2 500
DEMAND 250 350 400 200 1200

LP Formulation –
Min Cost Z = 3 * X11+ 1 * X12 + 7 * X13 + 4 * X14 + 2 * X21+ 6 *
X22 + 5 * X23 + 9 * X24 + 8 * X31 + 3* X32 + 3 * X33 + 2 * X34
S.T. Non Negativity Requirement - All X (ij) > / = 0
1) Supply Constraints
•X11 + X12 + X13 + X14 < / = 300
•X21 + X22 + X23 + X24 </ = 400
•X31+ X32 + X33 + X 34 < / = 500
•2) Demand Requirements
•X11 + X21 + X31 > / = 250
•X12 + X22 + X32 > / = 350
•X13+ X23 + X33 > / = 400
•X14 + X24 + X34 > / = 200
 D

1 2 3 4 Supply Penalty

1 3 1 7 4 300

S 2 2 6 5 9 400

3 8 3 3 2 500

Demand 250 350 400 200

Penalty
 D

1 2 3 4 Supply

1 3 1 7 4 300

Source 2 2 6 5 9 400

3 8 3 3 2 500

Demand 250 350 400 200

 TRANSPORTATION PROBLEMS
• EX.2-Consider the problem of allocating raw
material from different warehouses to five different
plants.Demand / Supply & cost matrix is as given
below. Please note that it is not possible to ship the
raw material from warehouse 4 to plant 4 because of
steep road. Find the optimum shipping plan for raw
material.
PLANT

1 2 3 4 5 SUPPLY
1 10 2 3 15 9 25
WAREHOUSE 2 5 10 15 2 4 30
3 15 5 14 7 15 20
4 20 15 13 …….. 8 30
DEMAND 20 20 30 10 25 105
 TRANSPORTATION PROBLEMS
• Converting Unbalanced Problem into Balanced
Problem ---
• EX.3--
DESTINATION
1 2 3 SUPPLY
1 30 50 15 300
SOURCE 2 35 70 20 200
3 20 45 60 500
DEMAND 300 200 400

DESTINATION
1 2 3 4 SUPPLY
1 30 50 15 0 300
SOURCE 2 35 70 20 0 200
3 20 45 60 0 500
DEMAND 300 200 400 100 1000
 TRANSPORTATION PROBLEMS
• Converting Unbalanced Problem into Balanced
Problem ---
• EX.4--
DESTINATION
1 2 3 4 SUPPLY
1 5 12 6 10 300
SOURCE 2 7 8 10 3 400
3 9 4 9 2 300
DEMAND 200 300 450 250

DESTINATION
1 2 3 4 SUPPLY
1 5 12 6 10 300
SOURCE 2 7 8 10 3 400
3 9 4 9 2 300
4 0 0 0 0 200
DEMAND 200 300 450 250 1200
 TRANSPORTATION PROBLEMS
• Solve the following transportation problem for
maximum profit.
MARKETS
A B C D SUPPLY
X 12 18 6 25 200
WAREHOUSE Y 8 7 10 18 500
Z 14 3 11 20 300
DEMAND 180 320 100 400 1000
• (Hint---Subtract all the values from the largest value
in the profit matrix to get the opportunity cost
matrix.) MARKETS
A B C D SUPPLY
X 13 7 19 0 200
WAREHOUSE Y 17 18 15 7 500
Z 11 22 14 5 300
DEMAND 180 320 100 400 1000
 TRANSPORTATION
Example – PROBLEMS
•The Automobile Company manufactures automobiles in three
plants and then ships them to four regions of the country. Company
wants to find the lowest-cost shipping plan for meeting the demands
of the four regions without exceeding the capacities of the plants.
•Input Data for Example
• Region 1 Region 2 Region 3 Region 4 Capacity
•Plant 1 131 218 266 120 450
•Plant 2 250 116 263 278 600
•Plant 3 178 132 122 180 500
•Demand 450 200 300 300
 TRANSSHIPMENT PROBLEMS
• In this type of the problems, consignment passes
thro’ one or more intermediate nodes. The objective
‘ however’ is to minimizes the total cost of
shipment.
S1 P1 M1
W1
S2 D1
P2 M2
S3 W2
D2 P3 M3
S4
 TRANSSHIPMENT PROBLEMS
• Consider the following Transshipment Problem
involving 4 sources & 2 destinations. The matrix as
given below--
S1 S2 S3 S4 D1 D2 SUPPLY
S1 0 4 20 5 25 12 100
S2 10 0 6 10 5 20 200
S3 15 20 0 8 45 7 150
S4 20 25 10 0 30 6 350
D1 20 18 60 15 0 10
D2 10 25 30 23 4 0
DEMAND 350 450
 TRANSSHIPMENT PROBLEMS
• B= Buffer Stock which must be maintained at each
of transient source & destination = sum of supplies
or sum of demand. = 800 units in the said
example.Once added , the problem has to be solved
by the same way as given in the transportation
problems.
S1 S2 S3 S4 D1 D2 SUPPLY
S1 0 4 20 5 25 12 100+800 900
S2 10 0 6 10 5 20 200+800 1000
S3 15 20 0 8 45 7 150+800 950
S4 20 25 10 0 30 6 350+800 1150
D1 20 18 60 15 0 10 800
D2 10 25 30 23 4 0 800
DEMAND 800 800 800 800 800+350 450+800
1150 1250
 Minimum Cost Network Flow Model
• The objective of many real-world network models is to
ship goods from one set of locations to another set of
locations at minimum cost, subject to various constraints.
• There are many variations of these models. The simplest
models include a single product that must be shipped via
one mode of transportation (truck, for example) in a
particular period of time.
• More complex models—and much larger ones—can
include multiple products, multiple modes of
transportation, and/or multiple time periods.
• This general class of problems is referred to as a
minimum cost network flow problem
 Multi Nodal Transshipment Problem
• The general minimum cost network flow problem is similar to
the transportation problem except for two possible differences.
• First, arc capacities are often imposed on some or all of the
arcs. These become simple upper bound constraints in the
model.
• Second and more significant, inflows and outflows can be
associated with any node.
• Nodes are generally categorized as suppliers, demanders, and
trans-shipment points.
• A supplier is a location that starts with a certain supply (or
possibly a capacity for supplying).
• A demander is the opposite; it requires a certain amount to end
up there.
• A transshipment point is a location where goods simply pass
through.
 Multi Nodal Transshipment Problem
• The best way to think of these categories is in terms of net
inflow and net outflow.
• The net inflow for any node is defined as total inflow minus
total outflow for that node.
• The net outflow is the negative of this, total outflow minus
total inflow.
• Then a supplier is a node with positive net outflow
• A demander is a node with positive net inflow
• A transhipment point is a node with net outflow (and net
inflow) equal to 0.
• It is important to realize that inflows are sometimes allowed
to suppliers, but their net outflows must be positive.
• Similarly, outflows from demanders are sometimes allowed,
but their net inflows must be positive
 Multi Nodal Transshipment Problem
• There are typically two types of constraints in minimum cost
network flow models (other than nonnegativity of flows).
• The first type represents the arc capacity constraints, which
are simple upper bounds on the arc flows.
• The second type represents the flow balance constraints, one
for each node.
• For a supplier, this constraint is typically of the form Net
Outflow Original Supply or possibly Net Outflow Capacity.
• For a demander, it is typically of the form Net Inflow
Demand.
• For a trans-shipment point, it is of the form Net Inflow 0
(which is equivalent to Net Outflow 0).
• If the network is represented graphically, then it is easy to
“see” these constraints.
• We simply examine the flows on the arrows leading into and
out of the various nodes.
 Multi Nodal Transshipment Problem
Example:
•The Company produces a product at three plants.
•This product can be shipped directly to the company’s two
customers, or it can first be shipped to the company’s two
warehouses and then to the customers.
•Figure next slide is a network representation of Company’s
problem.
•Nodes 1, 2, and 3 represent the plants (these are the suppliers,
denoted by S), nodes 4 and 5 represent the warehouses (these
are the transhipment points, denoted by T), and nodes 6 and 7
represent the customers (these are the demanders, denoted by
D).
•Note that we allow the possibility of some shipments among
plants, among warehouses, and among customers.
•Also, some arcs have arrows on both ends, which means that
flow is allowed in either direction.
 Multi Nodal Transshipment Problem
• The cost of producing the product is the same at each plant,
so Company is concerned with minimizing the total shipping
cost incurred in meeting customer demands.
• The production capacity of each plant (in tons per year) and
the demand of each customer are shown in table. For
example, plant 1 (node 1) has a capacity of 200, and
customer 1 (node 6) has a demand of 400.
• In addition, the cost (in thousands of dollars) of shipping a
ton of the product between each pair of locations is listed in
Table, where a blank indicates that Company cannot ship
along that arc.
• We also assume that at most 200 tons of the product can be
shipped between any two nodes. This is the common arc
capacity.
• Company wants to determine a minimum-cost shipping
schedule.
 Multi Nodal Transshipment Problem
To Node 1 2 3 4 5 6 7
From Node
1 5 3 5 5 20 20
2 9 9 1 1 8 15
3 0.4 8 1 0.5 10 12
4 1.2 2 12
5 0.8 2 12
6 1
7 7

Objective To find the minimum-cost way to ship the tomato product from
suppliers to customers, possibly through warehouses, so that customer demands
are met and supplier capacities are not exceeded.
Multi Nodal Transshipment
T=0
Problem
4
S = 200 D =400
1 6

2
S=
300

3 7
S= D =180
100
5
T=0