TRANSPORTATION

MODEL

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• The Transportation Model
• Solution of a Transportation Problem

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 Part of a larger class of linear programming
problems known as network flow models.
 Possess special mathematical features that
enabled development of very efficient,
unique solution methods.
 Methods are variations of traditional
simplex procedure.

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 A product is transported from a number of sources to a
number of destinations at the minimum possible cost.
 Each source is able to supply a fixed number of units of the
product, and each destination has a fixed demand for the
product.
 The linear programming model has constraints for supply at
each source and demand at each destination.
 All constraints are equalities in a balanced transportation
model where supply equals demand.
 Constraints contain inequalities in unbalanced models
where supply does not equal demand.
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Problem: How many tons of wheat to transport from each grain elevator to each mill on a monthly
basis in order to minimize the total cost of transportation ?
Data: Grain Elevator Supply Mill Demand
1. Asala 150 A. Mekelle 200
2. Desie 175 B. Nekempte 100
3. Hawassa 275 C. Harar 300
Total 600 tons Total 600 tons

Transport cost from Grain Elevator to Mill ($/ton)

Grain Elevator A. Mekelle B. Nekempte C. Harar
1. Asala $6 8 10
2. Desie 7 11 11
3. Hawassa 4 5 12

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Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A + 5x3B + 12x3C

subject to x1A + x1B + x1C = 150

where xij = tons of
x2A + x2B + x2C = 175
x3A + x3B+ x3C = 275
wheat from each grain
x1A + x2A + x3A = 200
elevator, i, i = 1, 2, 3,
x1B + x2B + x3B = 100
to each mill j, j =
x1C + x2C + x3C = 300 A,B,C
xij  0

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  Transportation problems are solved manually within a tableau format.
 Each cell in a transportation tableau is analogous to a decision variable
that indicates the amount allocated from a source to a destination.

The Transportation
Tableau

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• Transportation models do not start at the origin where all decision values
are zero; they must instead be given an initial feasible solution.
• Initial feasible solution determination methods include:
- northwest corner method
- minimum cell cost method
- Vogel’s Approximation Method
• Methods for solving the transportation problem itself include:
- stepping-stone method and
- modified distribution method.

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In the northwest corner method the largest possible allocation is made to the cell in the upper left-hand
corner of the tableau , followed by allocations to adjacent feasible cells.

The Initial NW Corner

Solution

- The initial solution is complete when all rim requirements are satisfied.
- Transportation cost is computed by evaluating the objective function:
Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A + 5x3B + 12x3C = 6(150) + 8(0) + 10(0) + 7(50)
+ 11(100) + 11(25) + 4(0) + 5(0) + !2(275) = $5,925

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1. Allocate as much as possible to the cell in the upper left-hand
corner, subject to the supply and demand conditions.
2. Allocate as much as possible to the next adjacent feasible cell.
3. Repeat step 2 until all rim requirements are met.

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- In the minimum cell cost method as much as possible is allocated to the cell with the minimum
cost followed by allocation to the feasible cell with minimum cost.

The Initial Minimum Cell Cost Allocation

The Second Minimum Cell Cost Allocation

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 - The complete initial minimum cell cost solution; total cost = $4,550.

- The minimum cell cost method will provide a solution with a lower cost than
the northwest corner solution because it considers cost in the allocation process.

The Initial Solution

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1. Allocate as much as possible to the feasible cell with the
minimum transportation cost, and adjust the rim requirements.
2. Repeat step 1 until all rim requirements have been met.

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Method is based on the concept of penalty cost or
regret.
A penalty cost is the difference between the largest and
the next largest cell cost in a row (or column).
In VAM the first step is to develop a penalty cost for
each source and destination.
Penalty cost is calculated by subtracting the minimum
cell cost from the next higher cell cost in each row and
column. 14
The VAM Penalty Costs

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 - VAM allocates as much as possible to the minimum cost cell in the row or column with
the largest penalty cost.

The Initial VAM

Allocation

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 - After each VAM cell allocation, all row and column penalty costs are recomputed.

The Second
VAM
Allocation

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 - Recomputed penalty costs after the third allocation.

The Third VAM

Allocation

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 - The initial
VAM solution; total cost = $5,125
VAM and minimum cell cost methods both provide better initial solutions than does the
northwest corner method.

The Initial VAM

Solution

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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.

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Once an initial solution is derived, the problem must be solved using either the stepping-stone
method or the modified distribution method (MODI).
The initial solution used as a starting point in this problem is the minimum cell cost method
solution because it had the minimum total cost of the three methods used.

The Minimum Cell

Cost Solution

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The stepping-stone method determines if there is a cell with no allocation that would reduce cost
if used.

+1

The Allocation of One Ton to Cell 1A

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 - Must subtract one ton from another allocation along that row.

The Subtraction of
One Ton from
Cell 1B

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 - 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.

The Addition of One

Ton to Cell 3B and the
Subtraction of One
Ton from Cell 3A

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 - An empty cell that will reduce cost is a potential entering variable.
- To evaluate the cost reduction potential of an empty cell, a closed path connecting used
cells to the empty cells is identified.

The Stepping-
Stone Path for
Cell 2A

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The remaining stepping-stone paths and resulting computations for cells 2B and 3C.

The Stepping-Stone Path The Stepping-

for Cell 2B Stone Path for
Cell 3C

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 - After all empty cells are evaluated, the one with the greatest cost reduction potential is the
entering variable.
- A tie can be broken arbitrarily.

The Stepping-Stone
Path for Cell 1A

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 -

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).

The Second Iteration of

the Stepping-Stone
Method

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 - Check to see if the solution is optimal.

The Stepping-Stone Path for

Cell 2A

The Stepping-
Stone Path for Cell
1B

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- Continuing check for optimality.

The Stepping-Stone
Path for Cell 2B

The Stepping-Stone
Path for Cell 3C

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 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 Table 19 solution is optimal.
 Solution and total minimum cost :
x1A = 25 tons, x2C = 175 tons, x3A = 175 tons, x1C = 125 tons, x3B =
100 tons
Z = $6(25) + 8(0) + 10(125) + 7(0) + 11(0) + 11(175) + 4(175) +
5(100) + 12(0) = $4,525
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 A multiple optimal solution occurs when an empty cell has a cost change of zero and all
other empty cells are positive. An alternate optimal solution is determined by allocating to the
empty cell with a zero cost change. Alternate optimal total minimum cost also equals $4,525.

The Alternative
Optimal Solution

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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.

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MODI is a modified version of the stepping-stone method in which math equations replace the
stepping-stone paths.
In the table, the extra left-hand column with the ui symbols and the extra top row with the vj
symbols represent values that must be computed.
- Computed for all cells with allocations :
ui + vj = cij = unit transportation cost for cell ij.

The Minimum Cell Cost

Initial Solution

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- Formulas for cells containing allocations:
x1B: u1 + vB = 8
x1C: u1 + vC = 10
x2C: u2 + vC = 11
x3A: u3 + vA = 4
x3B: u3 + vB = 5

The Initial Solution with All ui and vj Values

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- Five equations with 6 unknowns, therefore let u = 0 and solve to obtain:
- Each MODI allocation replicates the stepping-stone allocation.
- Use following to evaluate all empty cells:
cij - ui - vj = kij
where kij equals the cost increase or decrease that would occur by allocating to a cell.
- For the empty cells in Table 26:
x1A: k1A = c1A - u1 - vA = 6 - 0 - 7 = -1
x2A: k2A = c2A - u2 - vA = 7 - 1 - 7 = -1
x2B: k2B = c2B - u2 - vB = 11- 1 - 8 = +2
x3C: k3C = c3C - u3 -vC = 12 - (-3) - 10 = +5

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- After each allocation to an empty cell, the u i and vj values must be recomputed.

The Second Iteration of the MODI Solution Method

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- Recomputing ui and vj values:
x1A: u1 + vA = 6, vA = 6 x1C: u1 + vC = 10, vC = 10 x2C: u2 + vC = 11, u2 = 1
x3A: u3 + vA = 4, u3 = -2 x3B: u3 + vB = 5, vB = 7

The New ui and vj Values for the Second Iteration

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- Cost changes for the empty cells, cij - ui - vj = kij;
x1B: k1B = c1B - u1 - vB = 8 - 0 - 7 = +1
x2A: k2A = c2A - u2 - vA = 7 - 1 - 6 = 0
x2B: k2B = c2B - u2 - vB = 11 - 1 -7 = +3
x3C: k2B = c2B - u3 - vC = 12 - (-2) - 10 = +4

- Since none of the values are negative, solution obtained is optimal.

- Cell 2A with a zero cost change indicates a multiple optimal solution.

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1. Develop an initial solution.
2. Compute the ui and vj values for each row and column.
3. Compute the cost change, kij, for each empty cell.
4. Allocate as much as possible to the empty cell that will
result in the greatest net decrease in cost (most negative kij)
5. Repeat steps 2 through 4 until all kij values are positive or
zero.

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 - When demand exceeds supply a dummy row is added to the tableau.

ced Model
d . Supply)

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 - When supply exceeds demand, a dummy column is added to the tableau.
- The dummy column (or dummy row) has no effect on the initial solution methods or the
optimal solution methods.

An Unbalanced Model (Supply . Demand)

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 - In a transportation tableau with m rows and n columns, there must be m + n - 1 cells with
allocations; if not, it is degenerate.
- The tableau in the figure does not meet the condition since 3 + 3 -1 = 5 cells and there are
only 4 cells with allocations.

The Minimum Cell Cos

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• In a degenerate tableau, all the stepping-
stone paths or MODI equations cannot
be developed.
• To rectify a degenerate tableau, an
empty cell must artificially be treated as
an occupied cell.

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 Degeneracy may happen at two stages;
 When obtaining an initial basic feasible solution
 At any stage while moving towards optimal
solution.

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 To resolve degeneracy at the initial solution, we
proceed by allocating very small quantity close to
zero to one or more unoccupied cells so as to get
m+n-1 number of occupied cells.
 In minimization transportation problems, it is better
to allocate ∆ to unoccupied cells that have the
lowest transportation costs whereas in
maximization problems it should be allocated to a
cell that has a high pay off value.

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- The stepping-stone path s and cost changes for this tableau:
2A 2C 1C 1A
x2A: 7 - 11 + 10 - 6 = 0
2B 2C 1C 1B
x2B: 11 - 11 + 10 - 8 = + 2
3B 1B 1A 3A
x3B: 5-8+6-4= -1
3C 1C 1A 3A
x3C: 12 - 10 + 6 - 4 = + 4

The Second Stepping-Stone Iteration

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 To resolve degeneracy which occurs during
optimality test, the quantity can be allocated
to one or more cells which have become
unoccupied recently to have m+n-1 number
of occupied cells in the new solution

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- A prohibited route is assigned a large cost such as M.
- When the prohibited cell is evaluated, it will always
contain the cost M, which will keep it from being
selected as an entering variable.

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 Transportation problems may have multiple
optimal solutions.
 This can be useful for the managers since it
gives the manager an option of bringing non
quantitative considerations in to account.
 The existence of an alternate solution is
evidenced by an empty cell evaluation of
zero.

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 Some transportation type problems concern
profits or revenues rather than costs.
 In such cases, the objective is to maximize rather
than to minimize.
 Such problems can be handled by adding one
additional step at the start: identify the cell with
the largest profit and subtract all the other cell
profits from the value.

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 Then replace the cell profits with the resulting
values.
 These values represent the opportunity costs
that would be incurred by using routes with unit
profits that are less than the largest unit profit.
 Replace the original unit profits by the newly
calculate opportunity costs and solve in the usual
way for the minimum opportunity cost solution.

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 Taking data from Example1, obtain an optimal solution by MODI method.

Taking the following data, obtain an optimal

solution by stepping stone method
D1 D2 D3 D4 Supply

S1 19 30 50 10 7

S2 70 30 40 60 9

S3 10 8 70 20 18

Demand 5 8 7 14 34

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The Assignment
Model

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• Special form of linear programming model
similar to the transportation model.
• Supply at each source and demand at each
destination limited to one unit.
• In a balanced model supply equals demand.
• In an unbalanced model supply does not equal
demand.
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Problem: Assign four teams of officials to four games in a way that will
minimize total distance traveled by the officials. Supply is always one team
of officials, demand is for only one team of officials at each game.

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Minimize Z = 210xAR + 90xAA + 180xAD + 160xAC + 100xBR + 70xBA + 130xBD + 200xBC +
175xCR + 105xCA + 140xCD + 170xCC + 80xDR + 65xDA + 105xDD +120xDC
subject to
xAR + xAA + xAD+ xAC = 1
xBR + xBA + xBD + xBC = 1
xCR + xCA+ xCD + xCC = 1
xDR + xDA + xDD + xDC = 1
xAR + xBR + xCR + xDR = 1
xAA + xBA + xCA + xDA = 1
xAD+ xBD + xCD + xDD = 1
xAC + xBC + xCC + xDC = 1
xij  0 58
 - An assignment problem is a special form of the transportation problem where all supply
and demand values equal one.
- Example: assigning four teams of officials to four games in a way that will minimize
distance traveled by the officials.

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The Travel Distances to Each Game for Each Team of Officials
 - An opportunity cost table is developed by first subtracting the minimum value in each
row from all other row values (row reductions) and then repeating this process for each column.

The Assignment Tableau with Row Reductions

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 - The minimum value in each column is subtracted from all column values (column
reductions).
- Assignments can be made in the table wherever a zero is present.
- An optimal solution results when each of the four teams can be assigned to a different
game.
- Table 36 does not contain an optimal solution

The Tableau with Column Reductions

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 - An optimal solution occurs when the number of independent
unique assignments equals the number of rows and columns.
- If the number of unique assignments is less than the number of
rows (or columns) a line test must be used.

The Opportunity Cost Table with the Line Test

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 - In a line test all zeros are crossed out by horizontal and vertical lines; the minimum
uncrossed value is subtracted from all other uncrossed values and added to values where two
lines cross.

The Second Iteration

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 - At least four lines are required to cross out all zeros in table 38.
- This indicates an optimal solution has been reached.
- Assignments and distances:
Assignment Distance Assignment
Distance
Team A  Atlanta 90 Team A  Clemson 160
Team B  Raleigh 100 Team B  Atlanta 70
Team C  Durham 140 Team C  Durham 140
Team D  Clemson 120 Team D  Raleigh 80
Total 450 miles Total 450
miles

- If in initial assignment team A went to Clemson, result is the same; resulting

assignments represent multiple optimal solutions. 64
- When supply exceeds demand, a dummy column is added to the tableau.
- When demand exceeds supply, a dummy row is added to the tableau.
- The addition of a dummy row or column does not affect the solution method.
- A prohibited assignment is given a large relative cost of M so that it will never be
selected.

An Unbalanced Assignment Tableau with a Dummy Column

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 1. Perform row reductions.
2. Perform column reductions.
3 In the completed opportunity cost table, cross out all zeros
using the minimum number of horizontal and/or vertical lines.
4. If fewer than m lines are required, subtract the minimum
uncrossed value from all other uncrossed values, and add the same
value to all cells where two lines intersect.
5. Leave all other values unchanged and repeat step 3.
6. If m lines are required, the tableau contains the optimal
solution. If fewer than m lines are required, repeat step 4.
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 Job
Typist
P Q R S T

A 85 75 65 125 75

B 90 78 66 132 78

C 75 66 57 114 69

D 80 72 60 120 72

E 76 64 56 112 68

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20 10 0 60 10
24 12 0 66 12
18 9 0 57 12
20 12 0 60 12
20 8 0 56 12

2 2 0 4 0
6 4 0 10 2
0 1 0 1 2
2 4 0 4 2
2 0 0 0 2

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