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UNIT 3 Transportation Problem

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7 views

UNIT 3 Transportation Problem

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ayushedu.2005
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIT 3

TRANSPORTATION PROBLEM
What is a Transportation Problem?

 The Transportation Problem is a special type of LPP where the objective is to


minimise the cost of distributing a product from a number of sources or origins to
demands or to destinations.

 The problem of finding the minimum cost distribution of a given commodity from
a group of supply centres (sources) Ii=1,2,….,m to a group of receiving centers
(destinations) j = 1,2,…n.

 Each source has a certain supply (Si).

 Each destination has a certain demand (dj)

 The cost of shipping from a source to a destination is directly proportional to a


number of units shipped.
Purpose of Transportation Models:

 Transportation models or problems are primarily concerned with the


optimal (best possible) way in which a product produced at different
factories or plants ( called supply or origins) can be transported to a
number of warehouses (called demand or destinations).

 The objective in a transportation problem is to fully satisfy the


destination requirements within the operating production capacity
constraints at minimum possible cost.

 To find out the optimum transportation schedule keeping in mind cost of


transportation to be minimized.
Two Types of Transportation Problem:

 Balanced Transportation Problem deals with the problem where the total supply is equal to total
demand.
Total supply = Total Demand

 Unbalanced Transportation Problem deals with the problem where the total supply is not equal to
the total demand.
Total supply ≠ Total demand
- There are two possibilities in unbalanced Transportation Problem
1) Less supply as compared to Demand
2) Less Demand as compared to Supply

Special issues in Modeling:

 Demand is not equal to supply


-Called an unbalanced Problem.
-Common situation in the real world
-Resolved by introducing dummy sources or dummy destinations as necessary with the
cost coefficients of zero.
North-West Corner Method (NWCM)

This method does not take into account the cost of transportation on any route of transportation. The method
can be summarized as follows:

Step 1: Start with the cell at the upper left (north-west) corner of the transportation table
(or matrix) and allocate commodity equal to the minimum of the rim values for the first row and first column,
i.e. min (a1, b1).
Step 2: (a) If allocation made in Step 1 is equal to the supply available at first source (a1, in first row), then move
vertically down to the cell (2, 1), i.e., second row and first column. Apply Step 1 again, for next allocation.

(b)If allocation made in Step 1 is equal to the demand of the first destination (b1 in first column), then
move horizontally to the cell (1, 2), i.e., first row and second column. Apply Step 1 again for next allocation.

(c) If a1 = b1, allocate x11 = a1 or b1 and move diagonally to the cell (2, 2).
Step 3: Continue the procedure step by step till an allocation is made in the south-east corner cell of the
transportation table.
Least Cost Method (LCM)

Since the main objective is to minimize the total transportation cost, transport as much as
possible through those routes (cells) where the unit transportation cost is lowest. This method
takes into account the minimum unit cost of transportation for obtaining the initial solution
and can be summarized as follows:

Step 1: Select the cell with the lowest unit cost in the entire transportation table and allocate
as much as possible to this cell. Then eliminate (line out) that row or column in which either
the supply or demand is fulfilled. If a row and a column are both satisfied simultaneously,
then crossed off either a row or a column.
In case the smallest unit cost cell is not unique, then select the cell where the maximum
allocation can be made.

Step 2: After adjusting the supply and demand for all uncrossed rows and columns repeat the
procedure to select a cell with the next lowest unit cost among the remaining rows and
columns of the transportation table and allocate as much as possible to this cell. Then crossed
off that row and column in which either supply or demand is exhausted.

Step 3: Repeat the procedure until the available supply at various sources and demand at
various destinations is satisfied. The solution so obtained need not be non-degenerate.
Vogel’s Approximation Method (VAM)

Vogel’s approximation (penalty or regret) is preferred over NWCR and LCM methods. In
this method, an allocation is made on the basis of the opportunity (or penalty or extra) cost
that would have been incurred if the allocation in certain cells with minimum unit
transportation cost were missed. Hence, allocations are made in such a way that the penalty
cost is minimized. An initial solution obtained by using this method is nearer to an optimal
solution or is the optimal solution itself. The steps of VAM are as follows:

Step 1: Calculate the penalties for each row (column) by taking the difference between the
smallest and next smallest unit transportation cost in the same row (column). This difference
indicates the penalty or extra cost that has to be paid if decision-maker fails to allocate to the
cell with the minimum unit transportation cost.

Step 2: Select the row or column with the largest penalty and allocate as much as possible in
the cell that has the least cost in the selected row or column and satisfies the rim conditions.
If there is a tie in the values of penalties, it can be broken by selecting the cell where the
maximum allocation can be made.

Step 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.
Step 4: Repeat Steps 1 to 3 until the available supply at various sources and demand at
various destinations is satisfied.

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