In guidance : Neha Bhardwaj

 Mansi joshi
 Neetika varshney

 rahul kumar

 Veshnavi

 Kamaljeet

 shalu
To find out optimum transportation schedule
keeping in mind cost of transportation to be
mininimize.
• The transportation problem is a special
type of LPP where the object is to minimize
the cost of distributing a product from a
number of sources to the number of
destinations.
• Because of its complex structure the
simplex method is not suitable for solving it.
These problems require special method of
solution.
Source Destination
• Balance transportation problem where the total
supply is equal to demand.
• Unbalance transportation problem where the total
supply is not equal to demand.
 phase I – obtains the initial basic feasible
solution.
 phase II – obtain the optimal solution.
 North West Corner Rule (NWCR)
 Least Cost Method
 vogle approximation method (VAM)
 Modified Distribution Method
Now lets take a example for understanding these
method
A company has three production facilities p1, p2, p3
with production capicity of 11, 13 and 19 units per
week of a product , respectively. These units are to be
shipped to four warehouses D1 , D2 , D3 and D4 with
requirement of 6, 10, 12 and 15 units per week ,
respectively. The transportation cost per unit beetween
factories to warehouse are given in the table below.
 Destination D1 D2 D3 D4 Capacity
Source

P1 21 16 25 13 11

P2 17 18 14 23 13

P3 32 27 18 41 19

Demand 6 10 12 15 43
IN THIS METHOD –
1) We start from the cell (1,1) at the north-west
corner (at the top most left corner) and allocate
its maximum possible amount.
2) Then we move to the right hand cell (1,2) if
there is any available quantity remained
otherwise we move to down cell (2,1) and
allocate its maximum possible amount.
3) Repeat the step (2) again and proceed untill all
available quantity is distributed and demand is
full field.
 Destination D1 D2 D3 D4 Capacity
source
P1 6 21 5 16 25 13 11

P2 17 5 18 8 14 23 13

P3 32 27 4 18 15 41 19

Demand 6 10 12 15 43

Allocations – X 11 = 6, X 12 =5 , X22 = 5 , X23 = 8 , X33 = 4 , X34 = 15

 Here m = 3 , n= 4
So m+n-1 = 3+4-1 = 6

No. of allocation = 6
Hence No. of total allocation = m+n-1

So it is Non-degenerate basic feasible solution

Total Minimum Cost = 21*6 + 16*5 + 18*5 + 14*8 +

18*4 + 41*15
= 1095
IN THIS METHOD –
1) we write the cost and requirement matrix and the
cost are written within brackets ( ).
2) Then we examine the cost matrix carefully and
choose the cell with lowest cost and allocate there
as much as possible.
3) Again we examine the cost matrix and select the
cell with the lowest cost excluding the cell in which
allocation has been made and allocate as much as
possible . We proceed untill all avilable quantity is
allocated.
 Destination D1 D2 D3 D4 Capacity
source
P1 (21) (16) (25) 11(13) 11

P2 1(17) (18) 12(14) (23) 13

P3 5(32) 10(27) (18) 4(41) 19

Demand 6 10 12 15 43

Allocations : X14 = 11 , X11 = 1 , X13 = 12 , X31 = 5 , X32 = 10 , X 34 = 4

Here m = 3 , n= 4
So m+n-1 = 3+4-1 = 6

No. of allocation = 6
Hence No. of total allocation = m+n-1

So it is Non-degenerate basic feasible solution

Total Minimum Cost = 11*13 + 1*17 + 12*14+ 5*32

+ 10*27 + 4*41
= 922
IN THIS METHOD -
1) We write the penalties of row and columns
which are differences of the smallest and second
smallest cost of row and columns respectively.
These penalties are calculated for each row and
each column.
2) Now select the row or the column for which the
penalty is largest and allocate the maximum
possible amount to the cell with lowest cost in
that particular row or column.
 3) Then we leave the that row or column in which
demand or supply has been satisfied and
construct the reduced matrix. Then continue
this process on the reduces matrix until we
have all allocation made.

 If the largest penalty occurs in more than one or

columns then we may select any one out of them .
 Destination D1 D2 D3 D4 Supply Penalties

Source
P1 (21) (16) (25) 11(13) 11 3

P2 (17) (18) (14) (23) 13 3

P3 (32) (27) (18) (41) 19 9

Demand 6 10 12 15 43
[15– 11=4]
penalties 4 2 4 10
 Destination D1 D2 D3 D4 Supply Penalties

Source
P2 (17) (18) (14) 4(23) 13 4
[13 – 4 = 9]
P3 (32) (27) (18) (41) 19 9

Demand 6 10 12 4

penalties 15 9 4 18
 Destination D1 D2 D3 Supply Penalties

Source
P2 6(17) (18) (14) 9 3
[9 – 6 = 3]

P3 (32) (27) (18) 19 9

Demand 6 10 12

penalties 15 9 4
 Destination D2 D3 Supply Penalties

Source
P2 (18) (14) 3 4

P3 (27) 12(18) 19 9
[ 19 -12 =7]
Demand 10 12

penalties 9 4
 Destination D2 Supply Penalties

Source
P2 3(18) 3 0

P3 (27) 7 0

Demand 10
[10 –3=7]

penalties 9
 Destination D1 D2 D3 D4 Supply Penalties

Source
P1 (21) (16) (25) 11 (13) 11 3

P2 6 (17) 3 (18) (14) 4 (23) 13 3

P3 (32) 7 (27) 12 (18) (41) 19 9

Demand 6 10 12 15 43
[15-11=4]
penalties 4 2 4 10

Allocations : X14 = 11 , X21 = 6 , X22 = 3 , X24 = 4 , X32 = 7 , X 33 = 12

 Here m = 3 , n= 4
So m+n-1 = 3+4-1 = 6

No. of allocation = 6
Hence No. of total allocation = m+n-1

So it is Non-degenerate basic feasible solution

Total Minimum Cost = 11*13 + 6*17 + 3*18+ 4*23 +

7*27 + 12*18
= 796
IN THIS METHOD –
1) determine an initial basic feasible solution using any of the
methods . Consider the transportation matrix indicating the final
allocations. Check the number of allocation s in independent
positions and deal degeneracy if any.
2) Calculate a set of (m + n) numbers ui and vj for i = 1 ,2 , ….m and j =
1 , 2, ……n such that for each occupied cell ( i , j )
Cij = ui + vj (Actual cost = Implied cost)
For calculating of these ui , vj choose any one of ui and vj=0 for which the
corresponding row or column have the maximum number of
individual allocations. If the maximum number of allocation is more
than one , choose any one arbitrarily.
3) Calculate the cell eveluation (or cost difference or opportunity cost)
dij for each unoccupied cell ( i, j) by
dij = Cij –( ui + vj) , for all I and j
Obviously dij = 0 for occupied cells.
 4) Check all the cell evaluations dij and conclude that :
i. If all dij > 0 , then the cost of transportation will
increase, i.e., that is the solution is optimal and
unique.
ii. If all dij >= 0 ( with at least one dij = 0) , then the
solution is optimal and alternative solution exists. If
dij = 0 , then cost transportation will remains
unchanged.
iii. If at least one dij< 0 , then the solution is not
optimal. In this case proceed to step 5.
5) From a new I.B.F.S for this select an entering
unoccupied cell and outgoing an occupied cell. Add
that unoccupied cell for which dij= cij – (ui + vj) is
minimum negative (i.e., most negative) allocate in
this cell as much as possible and make one cell
empty out of the occupied cells, make use of a loop
starting from the unoccupied cell so selected.
6) Repeat the step 1 to 4 till an optimal solution is obtained.
 Distribution D1 D2 D3 D4 supply
center
Plant
P1 19 30 50 12 7

P2 70 30 40 60 10

P3 40 10 60 20 18

Requirement 5 8 7 15
 An initial basic feasible solution is obtained by least cost
method and is shown in table 1.

Distribution D1 D2 D3 D4 supply
center
Plant
P1 19 30 50 7 12 7

P2 70 8 30 2 40 60 10

P3 5 40 10 5 60 8 20 18

Requirement 5 8 7 15
Minimum cost :
= 7* 12 + 8* 30 + 2 * 40 + 5 *40 + 5* 60 + 8* 20
= 84 + 240 + 80 + 200 + 300 + 160
= 1064
Calculating ui and vj using ui + vj = Cij
Substituting u1 = 0 , we get
u1 + v4 = 12 0+v 4 = 12 or v4 =12
u3 + v4 = 20 u3+12 = 20 or u3 = 8
u3 + v3 = 60 8+v3 = 60 or v3 = 52
u3 + v1 = 40 8+v1 = 40 or v1 = 32
u 2+ v3 = 30 u2+52 = 40 or u2 = -12
u2 + v2 = 30 -12+v2 = 30 or v2 = 42
 Distribution D1 D2 D3 D4 supply
center
ui
Plant
P1 19 30 50 7 12 7 0

P2 70 8 30 2 40 60 10 -12

P3 5 40 10 5 60 8 20 18 8

Requirement 5 8 7 15

vj 32 42 52 12
Calculate opportunity cost using Cij – ( ui + vj )

Unoccupied Cells Opportunity Cost

(P1 , D1) C11– (u1+v1) = 19– (0+32) = -13

( P1, D2) C12 –(u1+v2) = 30– (-12+42) = 0
(P1 , D3) C13 –(u1+v3) = 50– (0+52) = -2
(P2 , D1) C21 –(u2+v1) = 70– (-12+32) = 50
(P1, D4) C14 –(u1+v4) = 60 – (0+12) = 48
(P3, D2) C32 –(u3+v2) = 10– (8+42) = - 40
 Distribution D1 D2 D3 D4 supply
center
ui
Plant
P1 19 30 50 7 12 7 0
-13 0 -2

P2 70 8 30 2 40 60 10 -12
50 48

P3 5 40 10 5 60 8 20 18 8
-40

Requirement 5 8 7 15

vj 32 42 52 12