Transportation

model
Transportation model

Introduction
• Involves the shipment of some homogeneous commodity from various sources (origins) of supply to a
set of destinations (sinks) each demanding specified levels of the commodity.

The model
• m sources, i = 1, 2,…,m
• n destinations, j = 1, 2,…,n
• si supply units available at source i
• dj demand units available at destination j
• cij unit transportation cost from source i to destination j
• xij amount of goods shipped from source i to destination j
 Example 1

• Powerco has three electric power plants that

supply the needs of four cities. Each power plant
can supply the following numbers of kilowatt-hours
(kwh) of electricity: plant 1— 35 million; plant 2—
50 million; plant 3—40 million. The peak power
demands in these cities, which occur at the same
time (2 P.M.), are as follows (in kwh): city 1—45
million; city 2—20 million; city 3—30 million; city
4—30 million. The costs of sending 1 million kwh of
electricity from plant to city depend on the distance
the electricity must travel (see table). Formulate an
LP to minimize the cost of meeting each city’s peak
power demand

Source: Winston, L.W, Operations Research: Applications and Algorithms, 4 ed., Cengage Learning, 2003
 • Let xij = the amount of product shipped from
Plant i to City j
• min 𝑧 = ∑$!"# ∑&%"# 𝑐!% 𝑥!%
LP • Subject to
∑$!"# 𝑥!% = 𝑑% j=1, 2, 3, 4
formulation ∑&%"# 𝑥!% = 𝑠! i=1, 2, 3
(demand)
(supply)
𝑥!% ≥ 0 i=1, 2, 3; j=1, 2, 3, 4
Example 2
A caterer supplies napkins to a restaurant as follows:

Day 1 2 3 4 5 Total
Quantity 1000 700 800 1200 1500 5200

He can buy them at $1.00 each (new) or send them for overnight wash at $0.20 each or 2-
day wash at $0.10 each. How should he supply the restaurant at minimum cost?

Formulate this problem into LP!

LP Formulation of a m-Source,
n-Destination Transportation Problem

• Assumption: Total supplies = Total demands

• Let xij = the amount of product shipped from source i to destination j

m n
min z = åå cij xij
i =1 j =1

subject to
m

åx
i =1
ij = dj j = 1,..., n
n

åx
j =1
ij = si i = 1,..., m

xij ³ 0 for all i and j

Transportation algorithm
1. Set up the problem in the standard cost
requirement table form.
2. Find an initial basic feasible solution.
3. Determine whether a better feasible solution
is possible. If yes, go to Step 4; otherwise, the
optimal solution has been found, stop.
4. Determine the improved basic feasible
solution and then go to Step 3.
 Standard
transportation
table
Example 1

Note: total supply should be balanced with total demand

 • The North-West Corner Method
Initial • The Least Cost Method
solution • The Vogel’s Approximation
Method (VAM)
procedures
North west corner

The method starts at the north-west corner cell of cost requirement matrix

The steps:
1. Allocate as much as possible to the selected cell and adjust the associated amount of supply and
demand by subtracting the allocated amount
2. Cross out the row or column with zero supply or demand to indicate that no further assignments
can be made in that row or column. If both a row or a column net to zero simultaneously, cross
out one only, and leave a zero supply (demand) in the uncross-out row (column)
3. If exactly one row or column is left uncross-out, stop. Otherwise, move to the cell to the right if a
column has just been crossed out or below if a row has been crossed out. Go to step 1
Example 1

35

10 20 20

10 30

Total cost = 35(8) + 10(9) + 20(12) + 20(13) + 10(16) + 30(5) = 1180

 Least • Find the better starting solution by
concentrating on the cheapest
routes
Cost • It starts by assigning as much as
possible to the cell with the

Method smallest unit cost (ties are broken

arbitrarily)
Example 1

15 20

30 20

10 30

Total cost = 15(8) + 30(9) + 20(6) + 20(13) + 10(16) + 30(5) = 1080

The VAM method

1. Calculate a penalty for each row (column) by subtracting the smallest cost element in
the row (column) from the next smallest cost element in the same row (column).

2. Identify the row or column with the largest penalty. Allocate as much as possible to
the variable with the least cost in the selected row or column.

3. Adjust the supply and demand and cross out the satisfied row or column. If a row
and a column are satisfied simultaneously, only one of them is crossed out and the
remaining row (column) is assigned a zero supply (demand). Any row or column with
zero supply or demand should not be used in computing future penalties.
The VAM method (cont’d)

4. Check number of uncrossed out rows and columns

a) If exactly one row and one column remain uncrossed out, stop.
b) If only one row (column) with positive supply (demand) remains
uncrossed out, determine the basic variables in the row (column) by
the Least Cost Method and then stop.
c) If all uncrossed out rows and columns have zero supply and
demand, determine the zero basic variables by the Least Cost
Method and then stop; otherwise, re-compute the penalties for all
the uncrossed out rows and columns and then go to Step 2.
 penalty

10 25 2 2 2 2

45 5 2 3 3 4

10 30 4 5 - -

penalty 1 3 3 2
1 3 3 -
1 6 3 -
1 - 3 -

Total cost = 45(9) + 10(6) + 10(9) + 20(6) + 25(10) + 5(13) + 30(5) = 1140
How to determine optimum
solution?
Use the method of multipliers
The method of multipliers

1. Associate with each Rowi of the transportation tableau a multiplier ui.

2. Associate with each Colj of the transportation tableau a multiplier vj.
3. For each basic variable xij in the current solution, write the equation: ui + vj =
cij.
n These equations give m+n-1 equations in m+n unknowns.
4. Set u1=0 and solve the m+n-1 equations in the remaining m+n-1 unknown
multipliers.
5. Evaluate 𝑐!
!" = 𝑐!" − 𝑢! − 𝑣" for each non-basic variable xij.
6. Select the most negative cij bar as the entering variable to enter the basic.
The method of multipliers

7. Determine the leaving variable by constructing a loop associated with the

selected entering variable as follows:
a) Identify a closed loop which starts and ends at the selected non-basic
variable.
b) The loop consists of successive horizontal and vertical segments whose
end points must be basic variables, except for the two segments starting
and ending at the non-basic variable.
c) The leaving variable is selected from among the corner variables of the
loop which will decrease when the entering variable increases above zero
level. It is selected as the one having the smallest value, since it will be the
first to reach zero value and any further decrease will cause it to be
negative
Example 1
Initial solution using North-West Corner, Total Cost 1180
v1 v2 v3 v4

u1 35

u2 10 20 20

u3 10 30
Iteration 0
For all basic variables,
u1 + v1 = 8 (1)
u2 + v1 = 9 (2)
u2 + v2 = 12 (3)
u2 + v3 = 13 (4) For all non-basic variables,
u3 + v3 = 16 (5) 𝑐!"
̃ = 𝑐!" − 𝑢! − 𝑣" = 6 − 0 − 11 = −5
u3 + v4 = 5 (6) 𝑐!#
̃ = 𝑐!# − 𝑢! − 𝑣# = 1 − 0 − 12 = −2
𝑐!$
̃ = 𝑐!$ − 𝑢! − 𝑣$ = 9 − 0 − 1 = 8
Set u1=0, thus 𝑐"$
̃ = 𝑐"$ − 𝑢" − 𝑣$ = 7 − 1 − 1 = 5
v1=8, u2=1, v2 = 11, v3=12, u3=4, v4= 1 𝑐#!
̃ = 𝑐#! − 𝑢# − 𝑣! = 14 − 4 − 8 = 2
𝑐#"
̃ = 𝑐#" − 𝑢# − 𝑣" = 9 − 4 − 11 = −6

Allocate as many as possible to cell 3-2, x32 , since it gives the

largest cost reduction per unit
Example 1
Construct a closed loop (steeping stone) for allocating x32
v1 v2 v3 v4

u1 35

-x32 +x32
u2 10 20 20

+x32 -x32
u3 10 30

The maximum value of x32 is 10

Example 1
Current allocation
v1 v2 v3 v4

u1 35

u2 10 10 30

u3 10 30

Total cost = 35(8) + 10(9) + 10(12) + 10(9) + 30(13) + 30(5) = 1120

Previous total cost = 1180. There is a 60 reduction in cost as a result of

transporting 10 unit to cell 3-2 with 𝑐!"
̃ =-6
Iteration 1
For all basic variables,
u1 + v1 = 8 (1)
u2 + v1 = 9 (2)
u2 + v2 = 12 (3)
u2 + v3 = 13 (4) For all non-basic variables,
u3 + v2 = 9 (5) 𝑐!"
̃ = 𝑐!" − 𝑢! − 𝑣" = 6 − 0 − 11 = −5
u3 + v4 = 5 (6) 𝑐!#
̃ = 𝑐!# − 𝑢! − 𝑣# = 10 − 0 − 12 = −2
𝑐!$
̃ = 𝑐!$ − 𝑢! − 𝑣$ = 9 − 0 − 7 = 2
Set u1=0, thus 𝑐"$
̃ = 𝑐"$ − 𝑢" − 𝑣$ = 7 − 1 − 7 = −1
v1=8, u2=1, v2 = 11, v3=12, u3=-2, v4= 7 𝑐#!
̃ = 𝑐#! − 𝑢# − 𝑣! = 14 − (−2) − 8 = 8
𝑐##
̃ = 𝑐## − 𝑢# − 𝑣# = 16 − (−2) − 12 = 6

Allocate as many as possible to cell 1-2, x12 , since it gives the

largest cost reduction per unit
Example 1
Construct a closed loop (steeping stone) for allocating x12
v1 v2 v3 v4

-x12 +x12
u1 35

+x12 -x12
u2 10 10 20

u3 10 10 30

The maximum value of x12 is 10

Example 1
Current allocation
v1 v2 v3 v4

u1 25 10

u2 20 30

u3 10 30

Total cost = 25(8) + 20(9) + 10(6) + 10(9)+ 30(13) + 30(5) = 1070

Previous total cost = 1120. There is a 50 reduction in cost as a result of

transporting 10 unit to cell 1-2 with 𝑐#"
̃ =-5
Iteration 2
For all basic variables,
u1 + v1 = 8 (1)
u2 + v1 = 9 (2)
u1 + v2 = 6 (3)
u2 + v3 = 13 (4) For all non-basic variables,
u3 + v2 = 9 (5) 𝑐!#
̃ = 𝑐!# − 𝑢! − 𝑣# = 10 − 0 − 12 = −2
u3 + v4 = 5 (6) 𝑐!$
̃ = 𝑐!$ − 𝑢! − 𝑣$ = 9 − 0 − 2 = 7
𝑐""
̃ = 𝑐"" − 𝑢" − 𝑣" = 12 − 1 − 6 = 5
Set u1=0, thus 𝑐"$
̃ = 𝑐"$ − 𝑢" − 𝑣$ = 7 − 1 − 2 = 4
v1=8, u2=1, v2 = 6, v3=12, u3=3, v4= 2 𝑐#!
̃ = 𝑐#! − 𝑢# − 𝑣! = 14 − 3 − 8 = 3
𝑐##
̃ = 𝑐## − 𝑢# − 𝑣# = 16 − 3 − 12 = 1

Allocate as many as possible to cell 1-3, x13 , since it gives the

negative value
Example 1
Construct a closed loop (steeping stone) for allocating x12
v1 v2 v3 v4

-x13 +x13
u1 25 10

+x13 -x13
u2 20 30

u3 10 30

The maximum value of x12 is 25

Example 1
Current allocation
v1 v2 v3 v4

u1 10 25

u2 45 5

u3 10 30

Total cost = 45(9) + 10(6) + 10(9)+ 25(10) + 5(13) + 30(5) = 1020

Previous total cost = 1070. There is a 50 reduction in cost as a result of

transporting 25 unit to cell 1-2 with 𝑐#"
̃ =-2
Iteration 3
For all basic variables,
u1 + v2 = 6 (1)
u1 + v3 = 10 (2)
u2 + v1 = 9 (3)
u2 + v3 = 13 (4)
For all non-basic variables,
u3 + v2 = 9 (5)
𝑐!!
̃ = 𝑐!! − 𝑢! − 𝑣! = 8 − 0 − 6 = 2
u3 + v4 = 5 (6)
𝑐!$
̃ = 𝑐!$ − 𝑢! − 𝑣$ = 9 − 0 − 2 = 7
𝑐""
̃ = 𝑐"" − 𝑢" − 𝑣" = 12 − 3 − 6 = 3
Set u1=0, thus
𝑐"$
̃ = 𝑐"$ − 𝑢" − 𝑣$ = 7 − 3 − 2 = 2
v2=6, v3=10, u2=3, v1 = 6, u3=3, v4= 2
𝑐#!
̃ = 𝑐#! − 𝑢# − 𝑣! = 14 − 3 − 6 = 5
𝑐##
̃ = 𝑐## − 𝑢# − 𝑣# = 16 − 3 − 10 = 3

All 𝑐$%
̃ are positive, thus the current solution is optimal
Irregular transportation
problem
1. Imbalanced transportation problem (Supply
≠ demand)

• Add dummy row/column

Example
Two reservoirs are available to supply the water needs of
three cities. Each reservoir can supply up to 50 million
gallons of water per day. Each city would like to receive 40
million gallons per day. For each million gallons per day of
unmet demand, there is a penalty. At city 1, the penalty is
$20; at city 2, the penalty is $22; and at city 3, the penalty
is $23. The cost of transporting 1 million gallons of water
from each reservoir to each city is shown in Table 4.
Formulate a balanced transportation problem that can be
used to minimize the sum of shortage and transport costs.
Irregular transportation problem
2. Degeneration

• Degeneration
• Balanced transportation
table can be solved if the
45 45 number of allocated cells =
number of raw + number of
column – 1
20 30 10 60
• If not, add artificial
allocation with the amount
0 40 of 0 so that the stepping
stone path can be
50 performed
Irregular transportation problem
3. Forbidden route

• Assign M (big value) to the respective route

Example:
Sailco Corporation must determine how many sailboats should be produced during each of the next four
quarters (one quarter is three months). Demand is as follows: first quarter, 40 sailboats; second quarter,
60 sailboats; third quarter, 75 sailboats; fourth quarter, 25 sail- boats. Sailco must meet demand on time.
At the beginning of the first quarter, Sailco has an inventory of 10 sailboats. At the beginning of each
quarter, Sailco must decide how many sailboats should be produced during the current quarter. For
simplicity, we assume that sailboats manufactured during a quarter can be used to meet demand for the
current quarter. During each quarter, Sailco can produce up to 40 sailboats at a cost of $400 per sailboat.
By having employees work overtime during a quarter, Sailco can produce addi- tional sailboats at a cost
of $450 per sailboat. At the end of each quarter (after production has occurred and the current quarter’s
demand has been satisfied), a carrying or holding cost of $20 per sailboat is incurred. Formulate a
balanced transportation problem to mini- mize the sum of production and inventory costs during the
next four quarters.
Application of transportation problems

1. Transportation of goods from supply points to demand centers to minimize

total transportation cost.

2. Refuse collection
• The refuse collection includes the collection of refuse at the various
sources and transporting them to the disposal points. The operation may
be divided into the following activities:
• a) Storage at or near the sources
• b) Collection and haulage of the refuse to the disposal sites
• c) Disposal
• The problem can be modeled as a transportation problem.
Application of transportation problems (cont’d)

3. Recruitment of staff
Suppose an organization has vacancies on n types of jobs. Each type
of job j requires dj persons to fulfill the vacancy. After advertising,
the organization receives applications from m applicants to apply
for these posts.
Let cij denote the cost of assigning applicant i to job j. The problem
can be modeled as a transportation problem.
Application of transportation problems (cont’d)

4. Production planning
Given the demand dj for n periods and the regular time and
overtime production rates as well as production costs and inventory
holding costs, an optimal production schedule to minimize the total
of production and inventory costs can be obtained by modeling this
as a transportation problem.
 Tugas 4
Soal 1 (UTS 2019)
Sebuah perusahaan konsultan memiliki tiga tenaga ahli.
Diperkirakan bulan depan setiap tenaga ahli dapat bekerja
selama 160 jam. Tercatat perusahaan tersebut harus Tenaga Tarif Tenaga Ahli /jam, $
menangani tiga proyek yang harus diselesaikan bulan Ahli Proyek 1 Proyek 2 Proyek 3
depan. Waktu yang diperlukan untuk mengerjakan Proyek
1, Proyek 2, dan Proyek 3 berturut-turut adalah 130 jam,
140 jam, dan 160 jam. Ketiga tenaga ahli tersebut Tenaga 120 150 190
mempunyai pengalaman yang berbeda-beda dalam Ahli 1
menangani proyek sejenis, sehingga besarnya tarif per jam
untuk setiap tenaga ahli berbeda-beda seperti tercantum
Tenaga 140 130 120
pada tabel. Setiap proyek dapat dikerjakan oleh beberapa Ahli 2
tenaga ahli. Perusahaan ingin mengetahui susunan tim Tenaga 160 140 150
tenaga ahli yang akan mengerjakan ketiga proyek tersebut
sehingga total tarif yang ditetapkan dapat maksimum.
Ahli 3

a. Buatlah balanced transportation table untuk kasus ini!

b. Tentukan susunan tim tenaga ahli yang akan
mengerjakan ketiga proyek tersebut supaya total tarif
yang diterapkan perusahaan tersebut dapat
maksimum!
Soal 2 (UTS 2018)

Diketahui formulasi linear programming untuk sebuah model transportasi sebagai berikut.
Meminimumkan z = 6x11 + 3x12 + 5x13 + 4x21 + Mx22 + 7x23 + 3x31 + 4x32 + 3x33
Terbatas pada x11 + x12 + x13 = 4
x21 + x22 + x23 = 3
x31 + x32 + x33 = 2
x11 + x21 + x31 = 4
x12 + x22 + x32 = 2
x13 + x23 + x33 = 3
xij ³ 0 dengan i merupakan daerah asal dan j adalah tujuan.

a. Buatlah cost requirement table berdasarkan model matematika tersebut!

b. Tentukan initial feasible solution dengan metode VAM!
c. Apakah initial feasible solution tersebut sudah optimal? Jika belum, tentukan solusi optimalnya
 Soal 3 (UTS 2017)

Pada sebuah unbalanced transportation problem,

jika 1 unit barang tidak dipindahkan dari gudang i ke
tujuan j, maka akan menimbulkan biaya simpan
Sumber Tujuan Pasokan
pada gudang i. Misalkan biaya simpan untuk gudang
Tujuan 1 Tujuan 2 Tujuan 3
1, 2, dan 3 sebesar $5/unit, $4/unit, dan $3/unit
Gudang 1 1 2 1 20 secara berturut-turut. Berdasarkan kebijakan
perusahaan, barang pada gudang 2 harus
Gudang 2 0 4 5 40 dipindahkan semua (tidak boleh disimpan) karena
gudang tersebut dialokasikan untuk menyimpan
Gudang 3 2 3 3 30
barang baru. Berikut adalah biaya transportasi
Permintaan 35 20 15 (dalam $/unit) dari gudang i ke tujuan j.
a. Buatlah balanced transportation table untuk
kasus ini!
b. Tentukan initial feasible solution dengan metode
VAM!
c. Apakah initial feasible solution tersebut sudah
optimal? Jika belum, tentukan solusi optimalnya
cukup sampai 1 kali iterasi saja!
d. Formulasikan masalah tersebut ke dalam Linear
Programming!
Soal 4 (Winston, 2004)
A company supplies goods to three customers, who
each require 30 units. The company has two
warehouses. Warehouse 1 has 40 units available,
and warehouse 2 has 30 units available. The costs
of shipping 1 unit from warehouse to customer are
shown in Table 7. There is a penalty for each unmet
customer unit of demand: With customer 1, a
penalty cost of $90 is incurred; with customer 2,
$80; and with customer 3, $110.
a. Formulate a balanced transportation problem
to minimize the sum of shortage and shipping
costs.
b. Suppose that extra units could be purchased
and shipped to either warehouse for a total
cost of $100 per unit and that all customer
demand must be met. Formulate a balanced
transportation problem to minimize the sum
of purchasing and shipping costs
Soal 5 (Winston, 2004)
A bank has two sites at which checks are
processed. Site 1 can process 10,000 checks
per day, and site 2 can process 6,000 checks
per day. The bank processes three types of
checks: vendor, salary, and personal. The
processing cost per check depends on the site
(see Table 11). Each day, 5,000 checks of each
type must be processed.
a. Formulate a balanced transportation
problem to minimize the daily cost of
processing checks.
b. Solve the problem
Thank you