Transshipment problem -I

ByUdit Anand (211152)

Arjun Kapoor(211173)

The Case
This is a classical case of transshipment problem in which we have been given this
figure and we need to find out the minimum transportation cost in transporting
units from plants to warehouses with following assumptions.

(a) Inter plant and inter warehouse transfers are not allowed.
(b) The units may be transshipped.

Here
P1,P2- Represent Manufacturing plants
W1,W2,W3- Represent Warehouses
The lines represent distances between
different plants and warehouses

Since it is given that transportation costs are exactly proportional to the

distances , taking proportionality constant as unity .
Unit transportation cost=Distance b/w plants and warehouses given in
figure(in miles)

Objective- To minimize transportation costs as per given assumptions .

According to assumption (a),Inter-plant and Inter-warehouse transportation
cost are assumed to be to avoid allocations to those cells.
The total number of starting nodes (sources) as well as the total number of
ending nodes (destinations) of this transshipment problem is 2+3=5.

Converting figure into transportation table ,we get

DESTINATION

P1

P2

W1

W2

W3

Supply

P1 0

100

90

60

240

P2

120

140

110

160

W1 100

120

W2 90

140

W3 60

110

80

120

200

SOURCE

Demand -

Total Supply = 400

Total Demand = 400

Since Supply == Demand, it is a balanced problem

The value of buffer stock to be added to all the rows and columns is
400 units.

DESTINATION

P1

SOURCE

P2

W1

W2

W3

Supply

P1 0

100

90

60

240+400
=640

P2

120

140

110

160+400
=560

W1 100

120

400

W2 90

140

400

W3 60

110

400

400

80+400
=480

120+40 200+4
0=520 00=60
0

Demand 400

Applying VAM to find out initial basic feasible solution

P1

P2

W1

W2

W3

P1 0

100

90 120

60

P2

140

110

W1 100

120

0 400

W2 90

140

W3 60

110

Dema 400
nd
Penalt (60),(60),
ies (60),
(60),()

400

Supply

Penalties

640 240
120

(60),(60),(60),(6
0),(60),(30),(40)

560 160
80 80

(110),(10),(10),(
10),(10),(10),(10
),(10)

400

(100),(100)

0 400

400

(90), (90),(90)

400

(60), (60), (60),

(60)

400

480 80

520 120

600 , 200
80

(110)

(100),(1
00),(20),
(20),(20)
,(20),(20
),(120)

(90),(90),(
90),(50),(
50),(50)

(60),(60),(6
0),(60),(50)
,(50),(50),(
50),(110)

400

120

80

120
80

400

Initial basic feasible solution

P1

P2

W1

W2

W3

P1

400

-----

-----

120

120

P2

-----

400

80

-----

80

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

-----

400

Test for degeneracy

m+n-1 = 5+5-1 = 9
Therefore, it is non-degenerate.
Solution= 0+ 0 + 9600 + 0 + 10800+0+ 7200 + 8800+0
=36400

Test for Optimality

Applying MODI method
Cost of Occupied cells

Cost of unoccupied cells

ui

ui

100

60

140

110

90

60

60

120

110

110

-10

100

120

-10

-30

90

140

-30

60

110

Vj

-60

-110 10

30

0
Vj

-60

-110 10

30

Net Evaluation table cij=cij-(ui+vj)

30

170

240

180

280

120

220

Since all values of the table are non-negative . IBFS is an optimal

solution.
Optimal Cost= 0+ 0 + 9600 + 0 + 3600 + 11200 + 0 + 12000+0
=36400
But since we have one 0 in the table , an alternate solution
exists.

Alternate Optimal solution

Applying Stepping Stone Method

P1

P2

W1

W2

W3

P1

400

-----

-----

120-

120+

P2

-----

400

80

80-

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

-----

400

Putting =80 in this solution ,we get

Alternate optimal solution

P1

P2

W1

W2

W3

P1

400

-----

-----

40

200

P2

-----

400

80

80

-----

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

-----

400

Test for degeneracy = m+n-1 = 5+5-1 = 9

Therefore, it is non-degenerate.
We do not need to apply MODI method as this is an alternate solution of
an optimal table.
Optimal Solution =36400

Diagrammatic representation of optimal solution(IBFS)

120

W2

P1
120

W3
80

P2

80

W1

Since it is given that transportation costs are exactly proportional to the

distances , taking proportionality constant as unity .
Unit transportation cost=Distance b/w plants and warehouses given in
figure(in miles)

Objective- To minimize transportation costs as per given assumptions .

According to assumption (b) that the units may be
Transhipped i.e. Inter-plant and Inter-warehouse transportation cost are not
but their actual allocations to those cells.
The total number of starting nodes (sources) as well as the total number of
ending nodes (destinations) of this transshipment problem is 2+3=5.

Converting figure into transportation table ,we get

DESTINATION

P1

P2

W1

W2

W3

Supply

P1 0

80

100

90

60

240

P2 80

120

140

110

160

W1 100

120

60

80

W2 90

140

60

90

W3 60

110

80

30

80

120

200

SOURCE

Demand Total Supply = 400

Total Demand = 400

Since Supply == Demand, it is a balanced

problem.

DESTINATION

P1

SOURCE

P2

W1

W2

W3

Supply

P1 0

80

100

90

60

240+400
=640

P2 80

120

140

110

160+400
=560

W1 100

120

60

80

400

W2 90

140

60

30

400

W3 60

110

80

30

400

400

80+400
=480

120+40 200+4
0=520 00=60
0

Demand 400

P1

P1 0

P2

W1

W2

W3

Supply

Penalties

80

100

90

60

640 240
40

(60),(60),(30),(3
0),(30),(30),(10)

110

560 160
80 80

(80),(30),(10),(1
0),(10),(10),(20),
(20),(20)

60

80

400

(60),(60),(60)

30

400

(30),
(30),(30),(30)

400

(30), (30), (30),

(30),(30)

400
P2 80

120

400
W1 100

200

40

120

140

80
0

80

400
W2 90

140

60

400
W3 60

110

80

30

400
Dema 400
nd

400

480 80

520 120
80

600 , 200
80

Penalt (60),(60)
ies

(80)

(60),(60)
,(60),(20
),(20),(2
0),(20),(

(30),(30),(
30),(30),(
60),(50),(
50),(140)

(30),(30),(3
0),(30),(60)
,(50)

Initial basic feasible solution

400

-----

-----

40

200

-----

400

80

80

------

-----

-----

400

-----

-----

-----

-----

-----

400

-----

-----

-----

-----

-----

400

Test for degeneracy = m+n-1 = 5+5-1 = 9

Therefore, it is non-degenerate.
Solution= 0+3600 + 12000 + 0 + 9600 + 11200 + 0 + 0+0
=36400

Test for Optimality

Applying MODI method
Cost of Occupied cells

Cost of unoccupied cells

ui

ui

80

100

60

80

110

110

90

60

60

120

140

110

-10

100

120

60

80

-10

-30

90

140

60

30

-30

60

110

80

30

Vj

-60

-110 10

30

0
Vj

-60

-110 10

30

Net Evaluation table cij=cij-(ui+vj)

-

130

30

170

240

40

90

180

280

80

60

120

220

70

30

Since all values of the table are non-negative . IBFS is an optimal

solution.
Optimal Cost= 0+3600 + 12000 + 0 + 9600 + 11200 + 0 + 0+0
=36400
But since we have two 0s in the table , two alternate solution
exist.

Alternate Optimal solution

Applying Stepping Stone Method

P1

P2

W1

W2

W3

P1

400

-----

-----

40+

200-

P2

-----

400

80

80-

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

-----

400

Putting =80 in this solution ,we get

Alternate optimal solution

P1

P2

W1

W2

W3

P1

400

-----

-----

120

120

P2

-----

400

80

----

80

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

-----

400

Test for degeneracy = m+n-1 = 5+5-1 = 9

Therefore, it is non-degenerate.
We do not need to apply MODI method as this is an alternate solution of
an optimal table.
Optimal Solution =36400

Alternate Optimal solution

Applying Stepping Stone Method

P1

P2

W1

W2

W3

P1

400

-----

-----

40-

200+

P2

-----

400

80

80

----

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

400-

Putting =40 in this solution ,we get

Alternate optimal solution

P1

P2

W1

W2

W3

P1

400

-----

-----

240

P2

-----

400

80

----

80

W1

-----

-----

400

-----

-----

W2

-----

-----

-----

400

-----

W3

-----

-----

-----

-----

360

Test for degeneracy = m+n-1 = 5+5-1 = 9

Therefore, it is non-degenerate.
We do not need to apply MODI method as this is an alternate solution of
an optimal table.
Optimal Solution =36400

200

W3

P1
40

W2
80

P2

80

W1

Any Queries ???

25