Polytechnique University of the Philippines

Sto. Tomas Branch

Transportation
and
Assignment
Models
CHAPTER 4

Jhun Jhun M. Quiatchon, MBA

 LEARNING
• OBJECTIVES
At the end of this chapter, the student should
be able to:
1. Determine how to structure the initial
solution for the transportation problem
suing the Northwest corner method
2. Apply the stepping stone method and
MODI methods to find the optimal solution
to transportation problems; and
3. Solve assignment problems using the
Hungarian Method
 • Transportation Model and
Assignment Model are considered
special purpose algorithm linear
Definition programming models because of
their structures
Definition • Transportation Model is used
when a business intends to
distribute goods from
various resources to different
destinations with varying
unit costs of transportation.

• This indicated that this

model is not applicable when
there is only one source or
only one destination.
STEPS IN SOLVING TRANSPORTATION PROBLEM

1. Set up the initial transportation table.

2. Compute the transportation cost.

3. Test if improvements should be made.

4. Improve the transportation table and

repeat Step 2.

5. Make recommendation.
STEPPING-STONE
METHOD:
BALANCED
TRANSPORTATION
PROBLEM
ILLUSTRATION
Jenny Company is engaged in the production of special window frames for
commercial buildings. It has three warehouses located in different locations in
Mindanao with the following available units: warehouse A, 150 frames; warehouse
B, 450 frames; and warehouse C, 450 frames. For the month, ABC Company took
three projects at different locations with the following requirements: project 1,
450 frames; project 2, 300 frames; and project 3, 300 frames. The unit costs of
transporting the frames from the three warehouses to the three projects are as
follows:

Project 1 Project 2 Project 3

Required. Using the stepping-stone
Warehouse A Php6.00 Php5.00 Php4.00
method, determine the distribution of
Warehouse B Php9.00 Php5.00 Php4.00
the frames from the three warehouses
Warehouse C Php10.00 Php8.00 Php6.00
to the projects.
STEP 1
Table 1a. Initial Table
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150

Warehouse B 9 5 4
450

Warehouse C 10 8 6
450

Total Demand 1050

450 300 300 1050
STEP 1
Table 1b. Improved Table
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
300 450

Warehouse C 10 8 6
450

Total Demand 1050

450 300 300 1050
STEP 1
Table 1c. Improved Initial Table
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
300 150 450

Warehouse C 10 8 6
150 450

Total Demand 1050

450 300 300 1050
STEP 1
Table 1d. Complete Initial Table
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
300 150 450

Warehouse C 10 8 6
150 300 450

Total Demand 1050

450 300 300 1050
STEP 2
Computation of transportation cost

A1 (150 x Php6.00) Php900.00

B1 (300 x Php9.00) 2,700.00
B2 (150 x Php5.00) 750.00
C2 (150 x Php8.00) 1,200.00
C3 (300 x Php6.00) 1,800.00
Total Cost Php7,350.00
STEP 3
• Test of the table is optimal. A table is optimal if there is no
negative improvement index on the empty cells; otherwise,
an improvement should be made.
• The rule of degeneracy requires that the total number of
columns and rows minus one is equal to the number of
occupied cells.
• To improve the table, the vacant cells shall be tested
whether the transfer of one unit produces a positive or
negative value.
STEP 3
1. Select any vacant cell to be tested.
2. Test the vacant cell by making a horizontal or vertical path
back to the original vacant cell.
3. Begin with a plus sign on the original vacant cell and
alternately place minus and plus signs on each square of
the path.
4. Ensure that the path always lands in an occupied cell.
5. End the path on an occupied cell that is perpendicular to
the original vacant cell.
 6 A2 5

150

9 5

A2 has a path of + 5 – 5 + 9 -6. The test

has an improvement index of +3. This 300 150
indicates that the transportation cost will
increase by Php3.00 per unit if units are
transferred to cell A2.
 \
6 5 A3 4

150
9 5 4

300 150
10 8 6
A3 has a path of + 4 -6 +8 -5 +9 -6.
The test gives an improvement
index of +4. This means that the 150 300
transportation cost will increase by
Php4.00 per unit if units are
transferred to cell A3.
 5 B3 4

150

8 6

The test for vacant cell B3 has a path of

+4 -6 +8 -5. The test has an improvement 150 300
index of +1. A Php1.00 increase in the
transportation cost per unit will occur if
units are transferred to cell B3.
 9 5

300 150

C1 8
10
C1 has a path of +10 -8 +5 -9. The test has
an improvement index of -2. This implies
that a reduction of Php2.00 per unit will 150
occur if units are transferred to cell C1.
SUMMARY

Vacant Cells (Table 1d) Path and Improvement Index

A2 +5 -5 +9 -6 = +3
A3 +4 -6 +8 -5 +9 -6 = +4
B3 +4 -6 +8 -5 = +1
C1 +10 -8 +5 -9 = -2

It can be observed that cell C1 has a negative improvement

index. Therefore, table 1d must be improved by transferring a
certain number of units to Cell 1.
STEP 4
Table 2. First Iteration

To Project 1 Project 2 Project 3 Total Supply

From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
150 300 450

Warehouse C 10 8 6
150 300 450

Total Demand 1050

450 300 300 1050
STEP 4
Computation of transportation cost

A1 (150 x Php6.00) Php900.00

B1 (150 x Php9.00) 1,350.00
B2 (300 x Php5.00) 1,500.00
C1 (150 x Php10.00) 1,500.00
C3 (300 x Php6.00) 1,800.00
Total Cost Php7,050.00
STEP 4
Vacant Cells (Table 2) Path and Improvement Index
A2 +5 -5 +9 -6 = +3
A3 +4 -6 +10 -6 = +2
B3 +4 -6 +10 -9 = -1
C2 +8 -10 +9 -5 = +2

9 5 B3 4 9 5 B3 4

150 300 300 150

10 8 10 8
150 300 300 150
STEP 4
Table 3. Second Iteration

To Project 1 Project 2 Project 3 Total Supply

From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
300 150 450

Warehouse C 10 8 6
300 150 450

Total Demand 1050

450 300 300 1050
STEP 4
Computation of transportation cost

A1 (150 x Php6.00) Php900.00

B2 (300 x Php5.00) 1,500.00
B3 (150 x Php4.00) 600.00
C1 (300 x Php10.00) 3,000.00
C3 (150 x Php6.00) 900.00
Total Cost Php6,900.00
STEP 4
Vacant Cells (Table 2) Path and Improvement Index
A1 +5 -5 +4 -6 +10 -6 = +2
B2 +4 -6 +10 -6 = +2
B3 +9 -4 +6 -10 = +1
C1 +8 -6 +4 -5 = +1

The test for vacant cells produced positive values

for the improvement indices. Hence, the optimal
solution has been reached.
STEP 5
Based on Table 3, Jenny Company should distribute the window frames
to the three projects as follows:

From Number of Frames To Transportation Cost

Warehouse A 150 units Project 1 150 x Php6 = Php900.00
Warehouse B 300 units Project 2 300 x Php5 = Php1500.00
150 units Project 3 150 x Php4 = Php600.00
Warehouse C 300 units Project 1 300 x Php10 = Php3000.00
150 units Project 3 150 x Php6 = Php900.00
Total Transportation Cost Transportation Cost
STEPPING STONE
METHOD:
SUPPLY IS
GREATER THAN
DEMAND
ILLUSTRATION
Jenny Company is engaged in the production of special window frames for
commercial buildings. It has three warehouses located in different locations in
Mindanao with the following available units: warehouse A, 375 frames; warehouse
B, 450 frames; and warehouse C, 450 frames. For the month, ABC Company took
three projects at different locations with the following requirements: project 1,
450 frames; project 2, 300 frames; and project 3, 300 frames. The unit costs of
transporting the frames from the three warehouses to the three projects are as
follows:

Project 1 Project 2 Project 3

Required. Using the stepping-stone
Warehouse A Php6.00 Php5.00 Php4.00
method, determine the distribution of
Warehouse B Php9.00 Php5.00 Php4.00
the frames from the three warehouses
Warehouse C Php10.00 Php8.00 Php6.00
to the projects.
STEP 1
Table 4. Initial Table with Dummy Column

To Project 1 Project 2 Project 3 Dummy Total Supply

From Project

Warehouse A 6 5 4
375 375

Warehouse B 9 5 4
75 300 75 450

Warehouse C 10 8 6 0
225 225 450

Total Demand 1275

450 300 300 225 1275
Computation of transportation cost

A1 (375 x Php6.00) Php2,250.00

B1 (75 x Php9.00) 675.00
B2 (300 x Php5.00) 1,500.00
C2 (75 x Php4.00) 300.00
C3 (225 x Php6.00) 1,350.00
Total Cost Php6,075.00
Table 4. Initial Table with Dummy Column

To Project 1 Project 2 Project 3 Dummy Total Supply

From Project

Warehouse A 6 5 4
375
A2 A3 375

Warehouse B 9 5 4
75 300 75 450

Warehouse C 10 8 6 0
C1 C2 225 225 450

Total Demand 1275

450 300 300 225 1275
Vacant Cells (Table 4) Path and Improvement Index
A2 +5 -5 +9 -6 = +3
A3 +4 -4 +9 -6 = +3
C1 +10 -9 +4 -6 = -1
C2 +8 -6 +4 -5 = +1
Table 4. Initial Table with Dummy Column

To Project 1 Project 2 Project 3 Dummy Total Supply

From Project

Warehouse A 6 5 4
375 375

Warehouse B 9 5 4
75 B1 300 75
B3 450

Warehouse C 10 8 6 0
C1 225 C3 225 450

Total Demand 1275

450 300 300 225 1275
Table 5. Improved Table

To Project 1 Project 2 Project 3 Dummy Total Supply

From Project

Warehouse A 6 5 4
375 375

Warehouse B 9 5 4
300 150 450

Warehouse C 10 8 6 0
75 225 225 450

Total Demand 1275

450 300 300 225 1275
Computation of transportation cost

A1 (375 x Php6.00) Php2,250.00

B2 (300 x Php5.00) 1,500.00
B2 (150 x Php4.00) 600.00
C2 (75 x Php10.00) 750.00
C3 (150 x Php6.00) 900.00
Total Cost Php6,000.00
Vacant Cells (Table 5) Path and Improvement Index
A2 +5 -5 +4 -6 +10 -6 = +2
A3 +4 -6 +10 -6 = +2
B1 +9 -4 +6 -10 = +1
C2 +8 -6 +4 -5 = +1
STEPPING STONE
METHOD:
DEMAND IS
GREATER THAN
SUPPLY
ILLUSTRATION
Jenny Company is engaged in the production of special window frames for
commercial buildings. It has three warehouses located in different locations in
Mindanao with the following available units: warehouse A, 150 frames; warehouse
B, 450 frames; and warehouse C, 450 frames. For the month, ABC Company took
three projects at different locations with the following requirements: project 1,
550 frames; project 2, 300 frames; and project 3, 300 frames. The unit costs of
transporting the frames from the three warehouses to the three projects are as
follows:

Project 1 Project 2 Project 3

Required. Using the stepping-stone
Warehouse A Php6.00 Php5.00 Php4.00
method, determine the distribution of
Warehouse B Php9.00 Php5.00 Php4.00
the frames from the three warehouses
Warehouse C Php10.00 Php8.00 Php6.00
to the projects.
STEP 1
Table 6. Initial Table with Dummy Row
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
400 50 450

Warehouse C 10 8 6
250 200 450

Dummy 0 0 0
Warehouse 100 100

Total Demand 1150

550 300 300 1150
Computation of transportation cost

A1 (150 x Php6.00) Php900.00

B1 (400 x Php9.00) 3,600.00
B2 (50 x Php5.00) 250.00
C2 (250 x Php8.00) 2,000.00
C3 (200 x Php6.00) 1,200.00
Total Cost Php7,950.00
Vacant Cells (Table 6) Path and Improvement Index
A2 +5 -5 +9 -6 = +3
A3 +4 -6 +8 -5 +9 -6 = +4
B3 +4 -6 +8 -5 = +1
C1 +10 -9 +5 -8 = -2
Table 6. Initial Table with Dummy Row

To Project 1 Project 2 Project 3 Total Supply

From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
400 50 450
B1 B2
Warehouse C 10 8 6
C1 250
C2 200 450

Dummy 0 0 0
Warehouse 100 100

Total Demand 1150

550 300 300 1150
 Table 7. Improved Table
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
150 300 450

Warehouse C 10 8 6
250 200 450

Dummy 0 0 0
Warehouse 100 100

Total Demand 1150

550 300 300 1150
Computation of transportation cost

A1 (150 x Php6.00) Php900.00

B1 (150 x Php9.00) 1,350.00
B2 (300 x Php5.00) 1,500.00
C1 (250 x Php10.00) 2,500.00
C3 (200 x Php6.00) 1,200.00
Total Cost Php7,450.00
Vacant Cells (Table 5) Path and Improvement Index
A2 +5 -5 +9 -6 = +3
A3 +4 -6 +10 -6 = +2
B3 +4 -6 +10 -9 = -1
C2 +8 -5 +9 -10 = +2
 To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
150
B1 300 B3 450

Warehouse C 10 8 6
250 C1 200
C3 450

Dummy 0 0 0
Warehouse 100 100

Total Demand 1150

550 300 300 1150
 Table 8. Improved Table
To Project 1 Project 2 Project 3 Total Supply
From

Warehouse A 6 5 4
150 150

Warehouse B 9 5 4
300 150 450

Warehouse C 10 8 6
400 50 450

Dummy 0 0 0
Warehouse 100 100

Total Demand 1150

550 300 300 1150
Computation of transportation cost

A1 (150 x Php6.00) Php900.00

B2 (300 x Php5.00) 1,500.00
B3 (150 x Php4.00) 600.00
C1 (400 x Php10.00) 4,000.00
C3 (50 x Php6.00) 300.00
Total Cost Php7,300.00
Vacant Cells (Table 5) Path and Improvement Index
A2 +5 -5 +4 -6 +10 -6 = +2
A3 +4 -6 +10 -6 = +2
B1 +9 -4 +6 -10 = +1
C2 +8 -6 +4 -5 = +1
ASSIGNMENT
MODEL
Definition • Assignment model deals with
the efficient assignment of a
worker or machine to a
specific job or project.
• The model applies when
there is only one worker
assigned to one project or
machine.
STEPS IN SOLVING AN ASSIGNMENT PROBLEM
1. Set up an initial assignment table.

2. Convert the initial table into an opportunity cost table.

3. Test the table for the optimal assignment

4. Revise the opportunity cost table and repeat step 3.

ASSIGNMENT PROBLEM:
BALANCED
ILLUSTRATION
Jynaphi Consultancy specializes in providing management consultancy to
small and medium-sized enterprises and rural banks. During a period, it
received three projects and plans to send consultants. Angel, Princess and
Hyzel. The costs per hour of the consultants are as follows: Angel to Project
1, Php550.00, to Project 2, Php700.00 and to Project 3, Php300.00; Princess
to Project 1,Php400.00, to Project 2, Php500.00 and to Project 3,
Php550.00; and Hyzel to Project 1, Php450.00, to Project 2, Php600.00 and
to Project 3, Php350.00

Required. Using the Hungarian method,

determine the assignment of the
consultants to the three projects that
will minimize assignment costs.
STEP 1
Table 1. Initial Assignment Table

Consultants Project 1 Project 2 Project 3

Angel 550 700 300
Princess 400 500 550
Hyzel 450 600 350
STEP 2
Convert Initial Assignment Table to Opportunity Cost Table

1. Subtract the smallest number of each row from all the

values in that same row.
2. Subtract the smallest number of each column from all the
values in that same column.
STEP 2
Consultants Project 1 Project 2 Project 3
Angel 550 700 300
Princess 400 500 550
Hyzel 450 600 350

Table 2. ROW OPPORTUNITY TABLE Table 3. COLUMN OPPORTUNITY TABLE

Consultants Project 1 Project 2 Project 3 Consultants Project 1 Project 2 Project 3

Angel 250 400 0 Angel 250 300 0
Princess 0 100 150 Princess 0 0 150
Hyzel 100 250 0 Hyzel 100 150 0
STEP 3
Test the table for the optimal assignment. Draw a minimum
number of horizontal and vertical lines to cover all the zeros
in the opportunity cost table.
Table 4. IMPROVED OPPORTUNITY TABLE

Consultants Project 1 Project 2 Project 3

Angel 250 300 0
Princess 0 0 150
Hyzel 100 150 0
The optimal assignment is achieved if the number of lines is equal to the number
of rows or columns.
STEP 4
Procedures for Revising the Table
1. Look for the smallest uncovered number and subtract it from all
uncovered numbers.
2. Add the smallest number to the number where the horizontal and
vertical lines intersect.
Table 5. REVISED OPPORTUNITY TABLE
Consultants Project 1 Project 2 Project 3 Consultants Project 1 Project 2 Project 3
Angel 250 300 0 Angel 150 200 0
Princess 0 0 150 Princess 0 0 250
Hyzel 100 150 0 Hyzel 0 50 0
STEP 4
Table 6. With lines covering zeros FINAL ASSIGNMENT
Consultants Project 1 Project 2 Project 3
Angel 150 200 0 Consultants Project Cost per Hour

Princess 0 0 250 Angel Project 3 Php300.00

Hyzel 0 50 0
Princess Project 2 500.00

Table 6 has three lines, which means the

Hyzel Project 1 450.00
number of lines covering zeros is equal to the
number of rows or columns; hence, the
optimal assignment can be determined Total Cost Per Hour Php1,250.00
already.
ASSIGNMENT PROBLEM:
UNBALANCED
 Required: Using Hungarian method, determine the optimum
ILLUSTRATION assignment of the three engineers.

Izzy Surveying Company plans to assign three associate engineers, namely Rolly,
Ryven, and Nicanor to the municipalities of Aleosan, Alamada, and Libungan for
surveying. The costs per day of the three associate engineers are as follows:
• Rolly: Php550.00, Php700.00, and Php300.00 when assigned to Aleosan,
Alamada, and Libungan, respectively
• Ryven: Php400.00, Php500.00 and Php550.00 when assigned to Aleosan,
Alamada, and Libungan, respectively
• Nicanor: Php450.00, Php500.00 and Php350.00 when assigned to Aleosan,
Alamada, and Libungan, respectively
Before the final assignment, the business receives a survey work request from
Pigcawayan and is economically evaluating the possibility of sending one of the
engineers there. It will cost the business Php1,000.00 per day to send Rolly to
Pigcawayan, Php800.00 to send Ryven and Php1,500.00 to send Nicanor.
STEP 1
Table 7. Initial Assignment Table

Engineers Aleosan Alamada Libungan Pigcawayan

Rolly 550 700 300 1,000
Ryven 400 500 550 800
Nicanor 450 600 350 1,500
Dummy 0 0 0 0
STEP 2
Engineers Aleosan Alamada Libungan Pigcawayan
Rolly 550 700 300 1,000
Ryven 400 500 550 800
Nicanor 450 600 350 1,500
Dummy 0 0 0 0

Table 8. ROW/COLUMN OPPORTUNITY TABLE

Engineers Aleosan Alamada Libungan Pigcaway

an
Rolly 250 400 0 700
Ryven 0 100 150 400
Nicanor 100 250 0 1,150
Dummy 0 0 0 0
STEP 3
Engineers Aleosan Alamada Libungan Pigcawayan
Rolly 250 400 0 700
Ryven 0 100 150 400
Nicanor 100 250 0 1,150
Dummy 0 0 0 0

Table 9. OPPORTUNITY TABLE WITH LINES COVERING ZEROS

STEP 4
Engineers Aleosan Alamada Libungan Pigcawayan

Rolly 250 400 0 700

Ryven 0 100 150 400

Nicanor 100 250 0 1,150

Dummy 0 0 0 0

Table 10. First Revised Opportunity Table

Engineers Aleosan Alamada Libungan Pigcawayan

Rolly 250 300 0 600

Ryven 0 0 150 300

Nicanor 100 150 0 1,050

Dummy 100 0 100 0

STEP 4
Engineers Aleosan Alamada Libungan Pigcawayan
Rolly 250 300 0 600
Ryven 0 0 150 300
Nicanor 100 150 0 1,050
Dummy 100 0 100 0
Table 11. Revised Opportunity Table with Lines

Engineers Aleosan Alamada Libungan Pigcawayan

Rolly 150 200 0 500
Ryven 0 0 350 400
Nicanor 0 50 0 950
Dummy 100 0 200 0
Table 12. Second Revised Opportunity Table
STEP 1
Table 13. Revised Opportunity Table with Lines

Engineers Aleosan Alamada Libunan Pigcawayan

Rolly 150 200 0 500
Ryven 0 0 350 400
Nicanor 0 50 0 950
Dummy 100 0 200 0

Engineers Project Cost per Hour

Rolly Libunan Php300.00
Ryven Alamada 500.00
Nicanor Aleosan 450.00
Total Cost Per Hour Php1,250.00