HANDOUT 1

TRANSPORTATION MODEL PROBLEMS

INTRODUCTION

There are some special types of Operations Research (Linear Programming) problems
known as Transportation Model problems (also known as Transportation problems).

A transportation problem is specified by the following information:

1. A set of m supply points from which some item(s) is/are shipped. Supply point i can
supply at most si units of item.

2. A set of n demand points to which the item(s) is/are shipped. Demand point j must
receive at least dj units of the shipped item.

3. Each unit produced at supply point i and shipped to demand point j incurs a variable
cost of cij.

We assume that the number of units shipped from supply point i to demand point j is
specified by the variable xij (where xij is greater than or equal to zero).

The objective of the transportation problem is to minimise the overall transportation cost
such that the demands for all the demand points are fulfilled with the help of the supplies
from all the supply points. Supply from any supply point can be used for fulfilling the
demand for any or all demand points. Similarly, demand for any demand point can be
fulfilled with the supply from any or all supply points.

The general formulation of a transportation problem is:

To Minimise c 11x11 + c 12x12 + c 13x13 + c14x14 + . . . . . . + c m nxmn

Subject to:
The supply constraints:
xi1 + xi2 + xi3 + xi4 + . . . . . . + x in si (i = 1, 2, . . . . . . m)

And the demand constraints:

x1j + x2j + x3j + x4j + . . . . . . + x mj dj (j = 1, 2, . . . . . . n)

xij 0 (i = 1, 2, . . . . . . m; j = 1, 2, . . . . . . n)

If the total supply (i.e. the sum of supplies from all supply points) is equal to the total
demand (i.e. the sum of demands for all demand points) then the problem is said to be a
balanced transportation problem.

However, even if the given transportation problem is not a balanced transportation

problem, it can be made a balanced transportation problem by doing the following:

1. If the total supply is less than the total demand, then a dummy supply point is added in
the given problem having the supply for that dummy supply point such that the total
supply and the total demand both become equal. Such dummy supply point indicates
the shortage in the given model.

2. Similarly, if the total demand is less than the total supply, then a dummy demand point
is added in the given problem having the demand for that dummy demand point such

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 that the total supply and the total demand both become equal. Such dummy demand
point indicates the excess in the given model.

By doing the required changes in the given model, as mentioned above, the
transportation problem becomes a balanced transportation problem.

Hence, the general formulation of a balanced transportation problem is:

To Minimise c 11x11 + c 12x12 + c 13x13 + c14x14 + . . . . . . + c m nxmn

Subject to:
The supply constraints:
xi1 + xi2 + xi3 + xi4 + . . . . . . + x in = si (i = 1, 2, . . . . . . m)

And the demand constraints:

x1j + x2j + x3j + x4j + . . . . . . + x mj = di (j = 1, 2, . . . . . . n )

xij 0 (i = 1, 2, . . . . . . m; j = 1, 2, . . . . . . n)

While a balanced transportation problem can be solved by using the Simplex Method,
there is a specialised algorithm for solving the balanced transportation problem that is
much more efficient than the Simplex Method.

THE SPECIALISED ALGORITHM FOR SOLVING A BALANCED

TRANSPORTATION PROBLEM

For understanding this algorithm we will consider the following transportation problem:

TRANSPORTATION MODEL PROBLEM 1

There are three water reservoirs available that may fulfil the daily water needs of four
regions. The capacities of the four reservoirs and the requirements of the four regions
are as mentioned in the following diagram:

Region 1
3 (150 millongal/day)
Reservoir 1 1
5
(100 millongal/day)
5 Region 2
4 (120 milliongal/day)
8
Reservoir 2
(130 milliongal/day) 7
6 Region 3
12 (80 milliongal/day)
Reservoir 3 3 11
(170 milliongal/day)
7 Region 4
(50 milliongal/day)

In the diagram, the supply capacities and the demand requirements are mentioned in
Million-Gallon water per day (a very large unit used for this purpose); and the numbers

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mentioned above the links are the costs for transportation of one unit of water (i.e. one
Million-Gallon water) from each reservoir to each region. Find out the minimum
possible cost of meeting each regions water requirement (using transportation model).

SOLUTION TO THE TRANSPORTATION MODEL PROBLEM 1

Create the transportation table using the information provided in the problem.

Note that the sum of all supplies is same as the sum of all demands , that is, 100 + 130 +
170 = 150 + 120 + 80 + 50 = 400. Hence, the problem is a balanced transportation
problem.

Assume that the demand of Region4 would be 100, rather than 50. There would be
more demand and less supply in the problem. Therefore we would add a dummy
supply point in the transportation table, and it would be as follows.

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Note that the unit costs of tra nsportation in the dummy supply point would be zero (for
all cells in the dummy supply point row). And the total supply is equal to the total
demand, that is, 100 + 130 + 170 + 50 = 150 + 120 + 80 + 100 = 450.

Similarly, assume that the demand of Region4 would be 30, rather than 50. There
would be less demand and more supply in the problem. Therefore we would add a
dummy demand point in the transportation table, and it would be as follows.

Note that the unit costs of transportation in the dummy demand point would be zero
(for all cells in the dummy demand point column). And the total supply is equal to the
total demand, that is, 100 + 130 + 170 = 150 + 120 + 80 + 30 + 20 = 400.

Now, as our original problem was already a balanced transportation problem, we would
not need to add any dummy supply point or dummy demand point. And we would
proceed towards the algorithm for solving the problem.

Important: Please look at the accompanying transportation tables for the

transportation problem presented above (that are filled using the steps mentioned in the
following algorithm), so that the algorithm is understood completely.

TRANSPORTATION MODEL ALGORITHM

The transportation model table is composed of R rows and C columns; where R is the
total number of supply points, and C is the total number of demand points. Hence the
transportation table is composed of (R x C) boxes; and on the top-right corner of each
box the unit costs of transportation (from each supply point to each demand point) are
mentioned. Each box is called a Cell. Initially, all the cells are empty. Each empty cell
is known as an Unoccupied Cell. Similarly, each non-empty cell would be known as
Filled Cell.

STEP I Finding a basic feasible solution

There are three methods that can be used for finding a basic feasible solution to the
transportation problem. We can use any one of them. Those three methods are known

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as North-West Corner method, Matrix Minimum Cost method, and Vogels
Approximation method.

North-West Corner Method

To find a BFS by the North-West Corner method, we begin in the upper left (or North-
West) corner of the transportation table, and insert a value in the cell that is as large as
possible (carefully observing the available supply and available demand for the row and
the column where the cell is lying). Cross out the row or column where no more cells
could be filled (i.e. all the remaining cells in that row or column), and mark that row or
column as cancelled.

Then, from the filled cell, move to the next nearest unoccupied cell at its right or below
it (whatever is possible). Insert a value in the cell that is as large as possible (carefully
observing the available supply and available demand for the row and the column where
the cell is lying ). Cross out the row or column where no more cells could be filled (i.e.
all the remaining cells in that row or column), and mark that row or column as
cancelled. Continue to apply this procedure. Eventually, we will come to a point where
there is only one cell that can be assigned a value. Assign this cell the largest possible
value; and cross out both the cells row and column. A basic feasible solution has now
been obtained.

Report the Current Transportation Cost.

Matrix Minimum Cost Method

To find a BFS by the Matrix Minimum Cost method, we begin by searching for the
smallest unit transportation cost (the cost written on the top right corner of each cell),
and insert a value in the cell that is as large as possible (carefully observing the available
supply and available demand for the row and the column where the cell is lying). Cross
out the row or column where no more cells could be filled (i.e. all the remaining cells in
that row or column), and mark that row or column as cancelled.

Then, we search for the next smallest unit transportation cost written in the unoccupied
cells. Insert a value in the cell that is as large as possible (carefully observing the
available supply and available demand for the row and the column where the cell is
lying). Cross out the row or column where no more cells could be filled (i.e. all the
remaining cells in that row or column), and mark that row or column as cancelled.
Continue to apply this procedure. Eventually, we will come to a point where there is
only one cell that can be assigned a value. Assign this cell the largest possible value; and
cross out both the cells row and column. A basic feasible solution has now been
obtained.

Report the Current Transportation Cost.

TO BE CONTINUED

The next topics would be Vogels Approximation Method and STEP II OPTIMALITY
CHECK and STEP III IMPROVEMENT (in case the current basic feasible solution is
not optimal) (USING THE PROCEDURE KNOWN AS STEPPING-STONE METHOD
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