Management Science Lecture Day 10

Management Science
Lecture Day 10
Solving Transportation Problems
M + N - 1 Rule
Stepping Stone Method
Modified Distribution Method
M+N1
Rule
The number of used cells in a transportation tableau

should comply with the M + N 1 rule before
proceeding to the use of an optimization technique.
That is, the number of used cells of a transportation
tableau should always be equal to the number of rows
or sources of supply (M) plus the number of columns
or demand/destination points (N) minus one (1).
The scenario wherein the number of used cells is less
than the M + N 1 rule is known as degeneracy.
To handle degenerate problems, we assign a zero
stone (representing a fake shipment) in one of the
unused squares and then treat that square as if it
were occupied.
More Popular Heuristics
Northwest Corner Rule

Greedy Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
40
Davao
Supply
16
X
5
10
X
6
50
80
40
30
40
50
120
90
90
70
40
50
250
40
30
Optimization
50
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
Davao
Supply
16
X
5
40
10
X
6
40
30
50
90
70
40
50
40
30
50
80
120
40
70
250
Optimization
40
Stepping-Stone
Method
In applying the stepping-stone method, we ask the

following question:
What would happen if one unit of supply was

tentatively shipped or assigned to an unused square?
If this tentative assignment results in a favorable
effect (reduces cost), the unused square evaluated
then becomes a possible candidate for entering
the next solution. This is analogous to the
examination of the Cj Zj row of the simplex tableau
to determine which variable should be brought into
the mix.
Steps Involved:
1. Generate a starting feasible solution by using a
heuristic. Make sure that the starting feasible
solution contains M + N 1 basic/used cells.
2. Select an unused square to evaluate.

3. Beginning with the selected unused square, trace a
closed path (moving horizontally and vertically only)
from this unused square via used squares back to
the original unused square.
4. Assign plus (+) and minus (-) signs alternately
at each corner square of the closed path, beginning
with a plus sign at the unused square.
Greedy Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
40
Davao
Supply
16
X
5
10
X
6
50
80
40
30
40
50
120
90
90
70
40
50
250
40
30
50
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Baguio
Davao
Iloilo
11
16
50
+ 12
10
40
40
14
Batangas
Demand
Cebu
Supply
90
30
40
50
70
40
50
50
80
120
250
Steps
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
Davao
Supply
16
X
5
40
10
X
6
40
30
50
90
70
40
50
40
30
50
80
120
250
40
70
40
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
+ 14
40
- 10
40
30
90
70
50
Laguna
Batangas
Cebu
Supply
40
50
40
50
50
80
120
250
Steps
Steps Involved:
5. Determine the net change in costs (improvement index)
as a result of the changes made in tracing the path
by summing the unit cost in each square with a plus sign
and subtracting those with a negative sign.
The improvement index corresponds to the
Cj Zj value calculated by the simplex method.
6. Repeat Steps 2 to 5 until an improvement index has

been determined for each unused square.
If all the indices are greater than or equal to zero,
an optimal solution has been found. Conversely,

if any of the indices is negative, a better solution
is possible.
Greedy Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Baguio
Davao
Iloilo
11
16
50
+ 12
+6
7
40
40
6
14
Batangas
Demand
Cebu
Supply
90
10
30
40
50
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Baguio
50
+ 12
+6
- 7
40
40
+ 10
14
Batangas
Demand
Cebu
90
Supply
Davao
Iloilo
+ 11
16
+ 12
30
40
50
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Baguio
50
+ 12
+6
- 7
40
40
+ 10
14
Batangas
Demand
Cebu
90
Supply
Davao
11
+ 12
Iloilo
+ 16
+ 16
30
40
50
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Baguio
Demand
Iloilo
11
12
+6
- 7
+ 12
+ 5
40
+ 10
+2
- 6
30
40
50
70
40
50
40
14
90
Davao
50
Batangas
Cebu
Supply
16
+ 16
8
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Baguio
Demand
+ 12
12
+6
- 7
40
+ 10
+2
40
14
90
Davao
50
Batangas
Cebu
Supply
Iloilo
11
16
+ 16
+ 8
+4
- 7
30
40
50
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
50
- 12
+6
+ 7
+ 12
40
+ 14
40
- 10
+2
Iloilo
11
16
+ 16
+4
6
-1
30
40
50
90
70
40
50
50
80
120
250
Steps
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
50
Demand
Davao
Iloilo
11
16
+5
12
+ 14
40
- 10
40
30
90
70
Laguna
Batangas
Cebu
Supply
40
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
+ 11
16
12
+5
+ 7
+9
- 5
40
+ 14
40
- 10
40
30
90
70
50
Laguna
Batangas
Cebu
Supply
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
50
Demand
Davao
+5
12
Laguna
Batangas
Cebu
Supply
11
+9
40
+ 14
30
90
70
+ 16
+ 15
40
10
40
Iloilo
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
50
+ 12
+5
- 7
+9
+1
- 14
40
+ 10
40
40
30
90
70
Iloilo
11
16
+ 15
5
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
+9
12
+5
- 7
40
+ 10
40
50
+1
14
40
30
90
70
Iloilo
11
16
+ 15
+ 8
+4
- 7
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
+9
- 5
+ 15
12
+5
+ 7
40
- 10
40
+ 6
+4
40
30
-2
50
90
70
40
50
50
+1
14
16
50
80
120
250
Steps
Steps Involved:
7. Select the unused square with the most negative
improvement index. This is analogous to the
entering variable in a simplex tableau.
8. Trace again the closed path of the unused square
with the most negative improvement index and
assign the alternating symbols, beginning with a
plus (+) sign on the unused square.
9. Determine the smallest unit assigned to a used
square with a minus (-) sign on the closed path
of the square with the most negative improvement
index.
10. Add the determined unit/s to all squares in the
closed path with plus signs and subtract from all
squares with minus signs. Then, go back to Step 2.
Greedy Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
50
- 12
+6
+ 7
+ 12
40
+ 14
40
- 10
+2
Iloilo
11
16
+ 16
+4
6
-1
30
40
50
90
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Baguio
Cebu
Cavite
50
12
Laguna
10
Batangas
Demand
Davao
+6
Supply
11
+ 11
70
14
Iloilo
16
+ 15
5
+1
10
+3
6
30
+1
40
50
90
70
40
50
Minimum transportation cost = P2,020
Another Example
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
+9
- 5
+ 15
12
+5
+ 7
40
- 10
40
+ 6
+4
40
30
-2
50
90
70
40
50
50
+1
14
16
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
50
+ 12
+7
+ 15
+ 11
- 5
-1
- 14
70
+2
10
10
+ 6
40
+2
30
50
90
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Baguio
Cebu
Cavite
50
12
Laguna
10
Batangas
Demand
Davao
+6
Supply
11
+ 11
70
14
Iloilo
16
+ 15
5
+1
10
+3
6
30
+1
40
50
90
70
40
50
Another Example
50
80
120
250

Greedy Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
40
Davao
Supply
16
X
5
10
X
6
50
80
40
30
40
50
120
90
90
70
40
50
250
40
30
50
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
50
- 12
+6
+ 7
+ 12
40
+ 14
40
- 10
+2
-1
30
40
50
90
70
40
50
+ 16
5
+4
6
50
80
120
250
The Cordoba Company

Warehouse
To
From
Baguio
Cebu
Cavite
50
12
Laguna
10
Batangas
Demand
Davao
+6
Supply
11
+ 11
70
14
Iloilo
16
+ 15
5
+1
10
+3
6
30
+1
40
50
90
70
40
50
Another Optimization Technique
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
Davao
Supply
16
X
5
40
10
X
6
40
30
50
90
70
40
50
40
30
50
80
120
250
40
70
40
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
+9
- 5
+ 15
12
+5
+ 7
40
- 10
40
+ 6
+4
40
30
-2
50
90
70
40
50
50
+1
14
16
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
50
+ 12
+7
+ 15
+ 11
- 5
-1
- 14
70
+2
10
10
+ 6
40
+2
30
50
90
70
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Baguio
Cebu
Cavite
50
12
Laguna
10
Batangas
Demand
Davao
+6
Supply
11
+ 11
70
14
Iloilo
16
+ 15
5
+1
10
+3
6
30
+1
40
50
90
70
40
50
Another Optimization Technique
50
80
120
250
Modified Distribution
(MODI)
Method
MODI is a streamlined version of the simplex method

that takes advantage of the special mathematical
structure of the transportation model.
One advantage of the MODI over the simplex method
is that it does not require the use of slack or artificial
variables to get a starting feasible solution.
In the regular simplex method, cost-reducing variables
are recognized by having a negative Cj Zj value.
The same Cj Zj indicators are used in the MODI
method but are calculated in a much easier way.
Steps Involved:
1. Generate a starting feasible solution by using a
heuristic. Make sure that the starting feasible
solution contains M + N 1 basic/used cells.
2. Assign row and column indicators to each row and

column of the transportation tableau.
In general, for an m x n transportation problem,
let:
Ri = indicator value assigned to row i
where i = 1, 2, . . . , m
Kj = indicator value assigned to column j
where j = 1, 2, . . . , n
Row-Minimum Method
Vogels Approximation Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
Davao
Supply
16
X
5
40
10
X
6
50
80
40
40
30
50
120
70
90
70
40
50
250
40
30
40
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
50
Laguna
Batangas
Cebu
Supply
40
14
40
10
40
30
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Steps
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Laguna
Batangas
Demand
Cebu
90
Davao
Supply
Iloilo
11
16
12
14
10
70
40
50
40
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Laguna
Batangas
Demand
Cebu
90
Davao
Supply
Iloilo
11
16
12
14
10
70
40
50
40
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Davao
Iloilo
11
12
Laguna
16
X
5
70
14
Batangas
Demand
Cebu
Supply
10
X
90
70
40
50
40
50
80
10
120
250
2
1
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Davao
Iloilo
11
12
Laguna
16
X
5
70
14
Batangas
Demand
Cebu
Supply
10
X
90
70
40
50
40
50
80
10
120
250
3
1
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
70
14
Iloilo
11
12
Davao
Supply
16
X
5
10
10
X
6
40
30
50
90
70
40
50
40
30
50
80
10
120
250
90
3
1
40
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
50
Laguna
Batangas
Cebu
Supply
70
14
10
10
40
30
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Steps Involved:
3. Compute values for the Ri and Kj indicators using:
Ri + Kj = Cij whenever xij > 0
Where: Cij = per unit transportation cost

Xij = shipment from source i to
destination j
4. Solve the resulting m + n equations by setting
R1 equal to zero and back-substituting for the
remaining Ri and Kj values.
Row-Minimum Method
Vogels Approximation
Ri + Kj = Cij
R1 + K1 =
R2 + K2 =
R2 + K3 =
R3 + K1 =
R3 + K2 =
R3 + K4 =
8
7
5
14
10
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
3
6
8
4
2
1
Ri + Kj = Cij
R1 + K1 =
R2 + K2 =
R2 + K3 =
R3 + K1 =
R3 + K2 =
R3 + K4 =
8
7
5
14
10
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
3
6
8
4
2
1
Steps
Ri + Kj = Cij
R1 + K1 =
R2 + K2 =
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
8
7
5
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
5
6
8
2
0
1
Ri + Kj = Cij
R1 + K1 =
R2 + K2 =
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
8
7
5
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
5
6
8
2
0
1
Steps Involved:
5. Calculate the opportunity costs of increasing
shipments through each non-basic (unused) cell
using the formula:
Cij (Ri + Kj) = opportunity cost

for non-basic cell (i,j)
6. Select the non-basic cell with the most negative
opportunity cost.
If no non-basic cell has a negative
Cij (Ri + Kj), stop, for the solution is
already optimal.
Row-Minimum Method
Cij (Ri + Kj) = OC
9 (0 + 4) = + 5
11 (0 + 2) = + 9
16 (0 + 1) = +15
12 (3 + 8) = + 1
8 (3 + 1) = + 4
6 (6 + 2) = - 2
Steps
Cij (Ri + Kj) = OC
9 (0 + 2) = + 7
11 (0 + 0) = +11
16 (0 + 1) = +15
12 (5 + 8) = - 1
8 (5 + 1) = + 2
10 (6 + 2) = + 2
Steps Involved:
7. Trace a closed path for the non-basic cell with the
most negative Cij (Ri + Kj) value. Assign plus (+)
and minus (-) signs alternately at each corner
square of the closed path, beginning with a plus sign
at the non-basic cell.
8. Determine the smallest unit/shipment assigned to a
used square in a negative position on the closed
path of the non-basic cell with the most negative
Cij (Ri + Kj) value.
9. Add the determined unit/s to all squares in the
closed path with plus signs and subtract from all
squares with minus signs.
10. Go back to Step 2.
Row-Minimum Method
Cij (Ri + Kj) = OC
9 (0 + 4) = + 5
11 (0 + 2) = + 9
16 (0 + 1) = +15
12 (3 + 8) = + 1
8 (3 + 1) = + 4
6 (6 + 2) = - 2
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
Demand
Davao
Iloilo
11
16
40
+ 6
50
Laguna
Batangas
Cebu
Supply
12
14
40
- 10
40
30
90
70
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
50
Laguna
Batangas
Cebu
Supply
70
14
10
10
40
30
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
5
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
5
6
8
2
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
5
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
5
6
8
2
0
1
Cij (Ri + Kj) = OC

9 (0 + 2) = + 7
11 (0 + 0) = +11
16 (0 + 1) = +15
12 (5 + 8) = - 1
8 (5 + 1) = + 2
10 (6 + 2) = + 2
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Davao
50
+ 12
10
70
-
14
40
90
70
Supply
Iloilo
11
16
10
+ 6
30
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
10
70
14
30
40
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Cij (Ri + Kj) = OC

9 (0 + 3) = + 6
11 (0 + 0) = +11
16 (0 + 1) = +15
5 (4 + 0) = + 1
8 (4 + 1) = + 3
10 (6 + 3) = + 1
The Cordoba Company

Warehouse
To
From
Baguio
Cavite
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
Laguna
10
Batangas
Demand
70
14
30
90
70
40
50
40
50
Another Example
50
80
120
250
Cij (Ri + Kj) = OC
9 (0 + 2) = + 7
11 (0 + 0) = +11
16 (0 + 1) = +15
12 (5 + 8) = - 1
8 (5 + 1) = + 2
10 (6 + 2) = + 2
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Davao
50
+ 12
10
70
-
14
40
90
70
Supply
Iloilo
11
16
10
+ 6
30
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
10
70
14
30
40
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Cij (Ri + Kj) = OC

9 (0 + 3) = + 6
11 (0 + 0) = +11
16 (0 + 1) = +15
5 (4 + 0) = + 1
8 (4 + 1) = + 3
10 (6 + 3) = + 1
The Cordoba Company

Warehouse
To
From
Baguio
Cavite
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
Laguna
10
Batangas
Demand
70
14
30
90
70
40
50
40
50
Another Example
50
80
120
250
Row-Minimum Method
Vogels Approximation Method
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
40
14
Iloilo
11
12
Davao
Supply
16
X
5
40
10
X
6
50
80
40
40
30
50
120
70
90
70
40
50
250
40
30
40
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
50
Laguna
Batangas
Cebu
Supply
40
14
40
10
40
30
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K2 =
R3 + K4 =
5
14
10
7
R1 = 0
R2 = 3
R3 = 6
K1
K2
K3
K4
=
=
=
=
8
4
2
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K2 =
R3 + K4 =
5
14
10
7
R1 = 0
R2 = 3
R3 = 6
K1
K2
K3
K4
=
=
=
=
8
4
2
1
Cij (Ri + Kj) = OC

9 (0 + 4) = + 5
11 (0 + 2) = + 9
16 (0 + 1) = +15
12 (3 + 8) = + 1
8 (3 + 1) = + 4
6 (6 + 2) = - 2
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
Demand
Davao
Iloilo
11
16
40
+ 6
50
Laguna
Batangas
Cebu
Supply
12
14
40
- 10
40
30
90
70
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
50
Laguna
Batangas
Cebu
Supply
70
14
10
10
40
30
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
5
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
5
6
8
2
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
5
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
5
6
8
2
0
1
Cij (Ri + Kj) = OC

9 (0 + 2) = + 7
11 (0 + 0) = +11
16 (0 + 1) = +15
12 (5 + 8) = - 1
8 (5 + 1) = + 2
10 (6 + 2) = + 2
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Davao
50
+ 12
10
70
-
14
40
90
70
Supply
Iloilo
11
16
10
+ 6
30
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
10
70
14
30
40
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Cij (Ri + Kj) = OC

9 (0 + 3) = + 6
11 (0 + 0) = +11
16 (0 + 1) = +15
5 (4 + 0) = + 1
8 (4 + 1) = + 3
10 (6 + 3) = + 1
The Cordoba Company

Warehouse
To
From
Baguio
Cavite
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
Laguna
10
Batangas
Demand
70
14
30
90
70
40
50
40
50
Next Topic
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Laguna
Batangas
Demand
Cebu
90
Davao
Supply
Iloilo
11
16
12
14
10
70
40
50
40
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Laguna
Batangas
Demand
Cebu
90
Davao
Supply
Iloilo
11
16
12
14
10
70
40
50
40
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Davao
Iloilo
11
12
Laguna
16
X
5
70
14
Batangas
Demand
Cebu
Supply
10
X
90
70
40
50
40
50
80
10
120
250
2
1
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
8
50
Davao
Iloilo
11
12
Laguna
16
X
5
70
14
Batangas
Demand
Cebu
Supply
10
X
90
70
40
50
40
50
80
10
120
250
3
1
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
50
70
14
Iloilo
11
12
Davao
Supply
16
X
5
10
10
X
6
40
30
50
90
70
40
50
40
30
50
80
10
120
250
90
3
1
40
The Cordoba Company

Warehouse
To
From
Cavite
Baguio
Demand
Davao
Iloilo
11
16
12
50
Laguna
Batangas
Cebu
Supply
70
14
10
10
40
30
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
5
14
6
7
R1 = 0
R2 = 5
R3 = 6
K1
K2
K3
K4
=
=
=
=
8
2
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K2 = 7
R2 + K3 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
5
14
6
7
R1 = 0
R2 = 5
R3 = 6
K1
K2
K3
K4
=
=
=
=
8
2
0
1
Cij (Ri + Kj) = OC

9 (0 + 2) = + 7
11 (0 + 0) = +11
16 (0 + 1) = +15
12 (5 + 8) = - 1
8 (5 + 1) = + 2
10 (6 + 2) = + 2
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Davao
50
+ 12
10
70
-
14
40
90
70
Supply
Iloilo
11
16
10
+ 6
30
50
40
50
50
80
120
250
The Cordoba Company

Warehouse
To
From
Cavite
Laguna
Batangas
Demand
Baguio
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
10
70
14
30
40
50
90
70
40
50
K1
K2
K3
K4
50
R1
80
R2
120
R3
250
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Ri + Kj = Cij
R1 + K1 = 8
R2 + K1 = 12
R2 + K2 =
R3 + K1 =
R3 + K3 =
R3 + K4 =
7
14
6
7
R1 =
R2 =
R3 =
K1 =
K2 =
K3 =
K4 =
0
4
6
8
3
0
1
Cij (Ri + Kj) = OC

9 (0 + 3) = + 6
11 (0 + 0) = +11
16 (0 + 1) = +15
5 (4 + 0) = + 1
8 (4 + 1) = + 3
10 (6 + 3) = + 1
The Cordoba Company

Warehouse
To
From
Baguio
Cavite
Cebu
Supply
Davao
Iloilo
11
16
12
10
50
Laguna
10
Batangas
Demand
70
14
30
90
70
40
50
40
50
50
80
120
250
For maximization problems, either change

the signs of the objective function values
and minimize, or choose the non-basic cell
with the most positive Cij (Ri + Kj) value
to enter the solution; all other steps
remain the same.
End of Lecture Day 10

Management Science Lecture Day 10

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Management Science Lecture Day 10

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Management Science

Stepping Stone Method

Modified Distribution Method

The number of used cells in a transportation tableau

More Popular Heuristics

Northwest Corner Rule

The Cordoba Company

The Cordoba Company

In applying the stepping-stone method, we ask the

What would happen if one unit of supply was

2. Select an unused square to evaluate.

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

Cj Zj value calculated by the simplex method.

6. Repeat Steps 2 to 5 until an improvement index has

an optimal solution has been found. Conversely,

Northwest Corner Rule

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

Northwest Corner Rule

The Cordoba Company

The Cordoba Company

Minimum transportation cost = P2,020

The Cordoba Company

The Cordoba Company

The Cordoba Company

Minimum transportation cost = P2,020

More Popular Heuristics

Northwest Corner Rule

The Cordoba Company

The Cordoba Company

The Cordoba Company

Minimum transportation cost = P2,020

Another Optimization Technique

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

Minimum transportation cost = P2,020

Another Optimization Technique

MODI is a streamlined version of the simplex method

2. Assign row and column indicators to each row and

More Popular Heuristics

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company

The Cordoba Company