Course Name: FPM4101

Farm Operation and Management

Transportation Problem

Dr. Md. Hamidul Islam

Associate Professor
Department of Farm Power and Machinery
Bangladesh Agricultural University
 Contents
▪ Developing initial solution
– Vogel’s approximation method

▪ Stepping-Stone method

Introduction 2
 Vogel’s approximation method
Step- - Calculate penalty for each row and column by
1 taking the difference between the two smallest
unit costs.
- This penalty or extra cost has to be paid if one
fails to allocate the minimum unit transportation
cost.
Step- - Select the row or column with the highest penalty
2 and select the minimum unit cost of that row or
column.
- Then, allocate the minimum of supply or demand
values in that cell. If there is a tie, then select the
cell where maximum allocation could be made.

Introduction 3
 Vogel’s approximation method
Step- - Adjust the supply and demand and eliminate the
3 satisfied row or column.
- If a row and column are satisfied simultaneously,
only of them is eliminated and the other one is
assigned a zero value.
- Any row or column having zero supply or
demand, can not be used in calculating future
penalties.
Step- - Repeat the process until all the supply sources
4 and demand destinations are satisfied.

Introduction 4
 Example: 01
Find out initial feasible solution for the transportation problem
shown below using Vogel’s approximation method (VAM).

Introduction 5
 VAM: Step 1

Row Penalty
To
Suppl Costs
From A B C
y P1

6 8 10
1 150 8–6=2

7 11 11
2 175 11 – 7 = 4

4 5 12
3 275 5–4=1

Demand 200 100 300 600

Column
6–4= 11 – 10 =
Penalty 8–5=3
2 1
Costs

Introduction 6
 VAM: Step 1

To
Suppl
From A B C
y

6 8 10
1 150

7 11 11
2 17 0
5
4 5 12
3 275

Demand 25 100 300

Introduction 7
 VAM: Step 2

Row Penalty
To
Costs
From A B C Supply

6 8 10
1 150 8–6=2

7 11 11
2 17 0 -
5
4 5 12
3 275 5–4=1

Demand 25 100 300

Column
6–4= 12 – 10 =
Penalty 8–5=3
2 2
Costs

Introduction 9
 VAM: Step 2

To
From A B C Supply

6 8 10
1 150

7 11 11
2 17 0
5
4 5 12
3 175
100
Demand 25 0 300

Introduction 10
 VAM: Step 3

Row Penalty
To
Costs
From A B C Supply

6 8 10
1 150 10 – 6 = 4

7 11 11
2 17 0 -
5
4 5 12
3 175 12 – 4 = 8
100
Demand 25 0 300
Column
6–4= 12 – 10 =
Penalty -
2 2
Costs

Introduction 12
 VAM: Step 3

To
From A B C Supply

6 8 10
1 150

7 11 11
2 17 0
5
4 5 12
3 150
25 100
Demand 0 0 300

Introduction 13
 VAM: Step 4

Row Penalty
To
Costs
From A B C Supply

6 8 10
1 150 10

7 11 11
2 17 0 -
5
4 5 12
3 150 12
25 100
Demand 0 0 300
Column
12 – 10 =
Penalty - -
2
Costs

Introduction 14
 VAM: Step 4

To From
A B C Supply

6 8 10
1 150

7 11 11
2 0
175
4 5 12
3 150
25 100 150
Demand 0 0 150

Introduction 15
 VAM: Step 5

To From
A B C Supply

6 8 10
1 0
150
7 11 11
2 0
175
4 5 12
3 150
25 100
Demand 0 0 150

Introduction 16
 VAM: Step 5

To From
A B C Supply

6 8 10
1 0
150
7 11 11
2 0
175
4 5 12
3 0
25 100 150
Demand 0 0 0

Introduction 17
 VAM:
Row Penalty
To Costs
Suppl
From A B C
y
1 2 3 4

6 8 10 150
1 0 2 2 4 -
150
7 11 11 175
2 0 4 - - -
175
4 5 12 275
175
3 1 1 8 -
25 100 150 150
0
200 100 300
Demand 25 0 150 600
0 0
1 2 3 1
Column 2 2 3 2
Penalty
Introduction
Costs 3 2 - 2 18
 VAM
Initial feasible solution

Total cost:

Introduction 19
 VAM
Summary of steps

1. Determine the penalty cost for each row and

column.
2. Select the row or column with the highest penalty
cost.
3. Allocate as much as possible to the feasible cell
with the lowest transportation cost in the row or
column with the highest penalty cost.
4. Repeat steps 1, 2, and 3 until all rim requirements
have been met.

Introduction 20
 Assignment
Exercise 01# Find out initial feasible solution for the unbalanced
transportation problem shown below using Least-cost, North-west corner, and
Vogel’s approximation method (VAM).

D1 D2 D3 Supply
S1 5 1 7 10
S2 6 4 6 80
S3 3 2 5 50
Demand 75 20 50

Introduction 21
 Assignment
Exercise 02# Find out initial feasible solution for the transportation problem shown
below using Least-cost, North-west corner, and Vogel’s approximation method
(VAM).

D1 D2 D3 D4 Supply
S1 11 13 17 14 250
S2 16 18 14 10 300
S3 21 24 13 10 400
Deman 200 225 275 250 950
d

Introduction 22
 Stepping-Stone method
▪ Select any unused square to evaluate.
▪ Beginning at this square, trace a closed path back to
the original square via squares that are currently
being used.
▪ Beginning with a plus (+) sign at the unused corner,
place alternate minus and plus signs at each corner of
the path just traced.
▪ Calculate an improvement index by first adding the
unit-cost figures found in each square containing a
plus sign and subtracting the unit costs in each square
containing a minus sign.
▪ Repeat steps 1 though 4 until you have calculated an
improvement index for all unused squares. If all
indices are ≥ 0, you have reached an optimal solution.

Introduction 23
 Example: 01
Find out feasible solution for the transportation problem
shown below using stepping-stone method.

Introduction 24
 Stepping-Stone method
▪ Initial solution used as a starting point in this problem
is the Least-Cost method solution because it had the
minimum total cost of the three methods used.

Introduction 25
 Stepping-Stone method
▪ Stepping-stone method determines if there is a cell
with no allocation that would reduce cost if used.

To
A B C Supply
From

6 8 10
1 150
25 125
7 11 11
2 175
175
4 5 12
3 275
200 75
Demand 200 100 300 600

▪ 1A - 2A - 2B - 3C
– An empty cell that will reduce cost is a potential entering
variable.
Introduction 26
 Stepping-Stone method: Step 1
Must subtract one ton from another allocation along that row. A
requirement of this solution method is that units can only be added to
and subtracted from cells that already have allocations, thus one ton
must be added to a cell as shown.
To
A B C Supply
From
+1 6 -1 8 10
1 150
25 125
7 11 11
2 175
175

-1 4 +1 5 12
3 275
200 75
Demand 200 100 300 600

Introduction 27
 Stepping-Stone method: Step 2

To
A B C Supply
From

6 -1 8 +1 10
1 150
25 125
+1 7 11 -1 11
2 175
175
-1 4 +1 5 12
3 275
200 75

Demand 200 100 300 600

Introduction 28
 Stepping-Stone method: Step 3

To
A B C Supply
From

6 8 10
1 150
25 -1 125 +1
7 11 11
2 175
+1 175 -1
4 5 12
3 275
200 75

Demand 200 100 300 600

Introduction 29
 Stepping-Stone method: Step 4

To
A B C Supply
From

6 8 10
1 150
25 +1 125 -1
7 11 11
2 175
175
4 5 12
3 275
200 75 -1 +1

Demand 200 100 300 600

Introduction 30
 Stepping-Stone method
To
A B C Supply
From
6 8 10
1 150
25 125
7 11 11
2 175
175
4 5 12
3 275
200 75

Demand 200 100 300 600

– After all empty cells are

evaluated, the one with the
greatest cost reduction
potential is the entering
variable.
– A tie can be broken arbitrarily.
Introduction 31
 Stepping-Stone method
To
A B C Supply
From
6 8 10
1 150
25 125
7 11 11
2 175
175
4 5 12
3 275
200 75

Demand 200 100 300 600

– When reallocating units to the

entering variable (cell), the amount is
the minimum amount subtracted on
the stepping-stone path.
– At each iteration one variable enters
and one leaves (just as in the simplex
method).
Introduction 32
 Stepping-Stone method

To
A B C Supply
From

6 8 10
1 150
25 125

7 11 11
2 175
175

4 5 12
3 275
175 100

Demand 200 100 300 600

▪ Check to see if the solution is optimal.

Introduction 33
 Stepping-Stone method
To
A B C Supply
From
6 8 10
1 150
25 125
7 11 11
2 175
175
4 5 12
3 275
175 100

Demand 200 100 300 600

– The stepping-stone process is

repeated until none of the empty
cells will reduce costs (i.e., an
optimal solution).
– In example, evaluation of four paths
indicates no cost reductions,
therefore solution is optimal.
Introduction 34
 Stepping-Stone method
▪ Solution and total minimum cost

25

Total cost:

Introduction 35
 Steeping-Stone method
Summary of steps

1. Determine the stepping-stone paths and cost

changes for each empty cell in the tableau.
2. Allocate as much as possible to the empty cell with
the greatest net decrease in cost.
3. Repeat steps 1 and 2 until all empty cells have
positive cost changes that indicate an optimal
solution.

36
 Transmission problem: Limitation
▪ One commodity ONLY: any one product supplied and
demanded at multiple locations:
– Merchandise
– Electricity, water

▪ Invalid for multiple commodities: (UNLESS transporting

any one of the multiple commodities is completely
independent of transporting any other commodity and
hence can be treated by itself alone)
– Example: transporting product 1 and product 2 from the
supply points to the demand points where the total amount
(of the two products) transported on a link is subject to a
capacity constraint.
– Example: where economy of scale can be achieved by
transporting the two products on the same link at a larger
total volume and at a lower unit cost of transportation.

Introduction 37
 Transmission problem: Limitation
▪ Difficult to generalize the technique to accommodate
(these are generic difficulty for “mathematical
programming,” including linear and non-linear
programming
– Economy of scale the per-unit cost of transportation on a
link decreasing with the volume (nonlinear and concave;
there is a trick to convert a “non-linear program with a
piecewise linear but convex objective function to a linear
program; no such tricks exists for a piecewise linear but
concave objective function)

– Fixed-cost: transportation usually involves fixed charges.

For example, the cost of truck rental (or cost of trucking in
general) consists of a fixed charge that is independent of
the mileage and a mileage charge that is proportional to
the total mileage driven. Such fixed charges render the
objective function NON-LINEAR and CONCAVE and make the
problem much more difficult to solve
Introduction 38
 Assignment
Five village having area of 100, 200, 300, 400 and 500 ha
respectively. Yield of potato is 30 t/ha for storage. Three
cold storage facilities having capacities of 4000, 12000 and
14000 ton, respectively are located in different places as
given by the following distance chart matrix in kilometer.

Villages
Cold
storage V1 V2 V3 V4 V5

S1 6 3 4 2 2
S2 6 3 4 4 4
S3 2 3 2 6 6
a. Design an initial shipping program by northwest corner method.
b. Design an initial shipping program by least cost method.
c. Design an initial shipping program by Vogel’s approximation method.
d. Find the optimum shipping program.
Introduction 39
 Solution: Transportation matrix

Villages
To
Supply
From V1 V2 V3 V4 V5

6 3 4 2 2
S1 4000

6 3 4 4 4
S2 12000

2 3 2 6 6
S3 14000

0 0 0 0 0
S4 15000

Deman
3000 6000 9000 12000 15000 45000
d

Introduction 40
 Next topic ……..

Leadership
and
Leadership Characteristics

41