TRANSPORTATION

PROBLEMS
 TRANSPORTATION PROBLEM

A transportation problem basically deals with the

problem, which aims to find the best way to fulfill
the demand of n demand points using the
capacities of m supply points. While trying to find
the best way, generally a variable cost of shipping
the product from one supply point to a demand
point or a similar constraint should be taken into
consideration.
General Description of a
Transportation Problem
 EXAMPLE
A company has three production facilities S1,S2,
S3 with production capacity of 7, 9 and 18 units
(in 100s) per week of a product respectively.
These units are to be shipped to four warehouses
D1, D2, D3, D4 with requirement of 5, 6,7 and 14
units (in 100s) per week, respectively. The
transportation costs (in Rupees) per unit between
factories to warehouses are given in the table on
next slide.
 TRANSPORTATION COST MATRIX
D1 D2 D3 D4 Supply Row
Penalty
S1 19 30 50 10 7 9

S2 70 30 40 60 9 10

S3 40 8 70 20 18 12

Demand 5 8 7 14 34

Column 21 22 10 10
Penalty
OPTIMIZATION OF TRANSPORTATION PROBLEM
 Phase 1
Calculating Basic Solution
(Using VAM)
Step 1: From the Table we determine the penalty (element –
smallest in its row (column) ) for each row and column.
D1 D2 D3 D4 Supply Row
Penalty

S1
19 30 50 10 7 9

S2
70 30 40 60 9 10

S3
40 8 70 20 18 12

Demand
5 8 7 14 34

Column
Penalty 21 22 10 10
 Step 2:
Identify the row or column with the largest
penalty among all the rows and columns. If the
penalties corresponding to two or more rows or
columns are equal we select the topmost row
and the extreme left column.
Step 3: Select Xij as a basic variable if Cij is the minimum cost in the row or
column with largest penalty. Choose Xij as high as possible. Eliminate ith row or
jth column depending upon whether ai or bj is the smaller of the two.

D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 7 9

S2 70 30 40 60 9 10

S3 40 8 70 20 10 12

Demand 5 8 7 14 34

Column 21 22 10 10
Penalty
Step 4: The step (ii) is now performed on the reduced matrix until all the basic
variables have been identified.

D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 7 9

S2 70 30 40 60 9 20

S3 40 8 70 20 10 20

Demand 5 8 7 14 34

Column 21 22 10 10
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 2 9

S2 70 30 40 60 9 20

S3 40 8 70 20 10 20

Demand 5 8 7 14 34

Column 21 22 10 10
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 2 40

S2 70 30 40 60 9 20

S3 40 8 70 20 10 50

Demand 5 8 7 14 34

Column 21 22 10 10
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 2 40

S2 70 30 40 60 9 20

S3 40 8 70 20 0 50

Demand 5 8 7 4 34

Column 21 22 10 10
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 2 40

S2 70 30 40 60 9 20

S3 40 8 70 20 0 50

Demand 5 8 7 4 34

Column 21 22 10 50
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 0 40

S2 70 30 40 60 9 20

S3 40 8 70 20 0 50

Demand 5 8 7 2 34

Column 21 22 10 50
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 0 40

S2 70 30 40 60 7 20

S3 40 8 70 20 0 50

Demand 5 8 7 0 34

Column 21 22 40 50
Penalty
 D1 D2 D3 D4 Supply Row
Penalty

S1 19 30 50 10 0 40

S2 70 30 40 60 0 20

S3 40 8 70 20 0 50

Demand 5 8 7 0 34

Column 21 22 40 50
Penalty
 Phase 2
Calculating Optimal Solution
MODIFIED DISTRIBUTION (MODI or u-v) METHOD
 Step 1
Introduce dual variables corresponding to the row and column
constraints.
Eg. u1+v1=c11 = 19
D1 D2 D3 D4 Supply Row Constraints

S1 19 30 50 10 7 U1

S2 70 30 40 60 9 U2

S3 40 8 70 20 18 U3

Demand 5 8 7 14 34 U4

Column
v1 v2 v3 v4
Constraints
Equations
Step 2: Any basic feasible solution of the transportation
problem has m + n – 1; Xjj >0. Thus there will be m + n - 1
equations to determine m + n dual variables. One of the dual
variables can be chosen arbitrarily. It is to be also noted that
as the primal constraints are equations, the dual variables are
unrestricted in sign.

Putting v4=0 (as it appears maximum number of times)

u3=20 v1=9
u2=60v3=-20
u1=10 v2=-12
Step 3: If X ij = 0, the dual variables computed in 3 are compared
with the Cij values of this allocation as: Cij – Ui - Vj .

If all Cij – Ui - Vj ≥ 0, then by an application of complementary

slackness theorem it can be shown that the corresponding
solution of the transportation problem is optimum. If one or
more of Cij – Ui - Vj < 0, we choose the cell with least value of Cij –
Ui - Vj and allocate as much as possible subject to the row and
the column constraints. The allocation of a number of adjacent
cell are adjusted so that a basic variable becomes non basic.
 Basic Allocation

D1 D2 D3 D4 Supply Row Constraints

S1 5 2 7

S2 7 2 9

S3 8 10 18

Demand 5 8 7 14 34

Column
Constraints
Negative Value indicates that there is a possibility of cost
reduction by assigning to this cell.

D1 D2 D3 D4 Supply Row Constraints

S1 +32 +60 7 10

S2 +1 -18 9 60

S3 +11 +70 18 20

Demand 5 8 7 14 34

Column
9 -12 -20 0
Constraints
 Re-Allocation

D1 D2 D3 D4 Supply Row Constraints

S1 5 2 7

2
S2 (+) 7 (-) 9

10
S3 8(-) 18
(+)

Demand 5 8 7 14 34

Column
Constraints
 RE-ALLOCATION

D1 D2 D3 D4 Supply Row Constraints

S1 5 2 7 u1

S2 2 7 9 u2

S3 6 12 18 u3

Demand 5 8 7 14 34

Column
v1 v2 v3 v4
Constraints
 Step 4
A fresh set of dual variables are
computed and entire procedure is
repeated.
 D1 D2 D3 D4 Supply Row Constraints

S1 19 30 50 10 7 U1

S2 70 30 40 60 9 U2

S3 40 8 70 20 18 U3

Demand 5 8 7 14 34 U4

Column
v1 v2 v3 v4
Constraints

U1+v1=19 u1+v4=10
u2+v2=30 u2+v3=40
u3+v2=8 u3+v4=20
Putting u1=0 : v1=19,v2=-2,v3=8, v4=10, u2=32, u3=10
All positive values indicate that no further reduction in cost is
possible. Hence it is optimal solution.

D1 D2 D3 D4 Supply Row Constraints

S1 +32 +42 7 0

S2 +19 +14 9 32

S3 +11 +52 18 10

Demand 5 8 7 14 34

Column
19 -2 8 10
Constraints
 Optimal Solution

D1 D2 D3 D4 Supply Row Constraints

S1 19 30 50 10 7 U1

S2 70 30 40 60 9 U2

S3 40 8 70 20 18 U3

Demand 5 8 7 14 34 U4

Column
v1 v2 v3 v4
Constraints
Unbalanced Problem
THANKS!