Definitions

A few terms in connection with Transportation model are defined below

Feasible Solution Any set of non negative allocations (X 0 ij > ) which satisfies the row and
column sum (rim requirement) is called a feasible solution.
Basic Feasible Solution A feasible solution is called a basic feasible solution if the number of
non negative allocations is equal to m+n-1 here m is the number of rows, n is the number of
columns in a transportation table.
Non-degenerate Basic Feasible Solution
Any feasible solution to a transportation problem containing in origins and n destinations is
said to be non-degenerate, if it contains m+n-1 occupied cells and each allocation is in
independent positions. The allocations are said to be in independent positions, if it is
impossible to form a closed path. Closed path means by allowing horizontal and vertical lines
and all the corner cells are occupied.
TYPES OF TRANSPORTATION PROBLEM
The transportation problem can be classified into balanced transportation problem and
unbalanced transportation problem.
1. Balanced Transportation Problem
If the sum of the supplies of all the sources is equal to the sum of the demands of all the
destinations, then the problem is termed as balanced transportation problem. This may be
represented by the relation:
2. Unbalanced Transportation Problem
It is the sum of the supplies of all the sources is not equal to sum of the demands of all the
destinations, then the problem is termed as unbalanced transportation problem. That means,
for any unbalanced transportation problem, we have
Algorithm of Vogels Approximation Method
Step1:
Calculate penalty for each row and column by taking the difference between the two smallest
unit costs. For each row and column, calculate its difference:
= (Second smallest cij in row/col) - (Smallest cij in row/col)
Step 2:
Among the penalties as found in step (l) choose the maximum penalty. If this maximum
penalty is more than one (i.e. if there is a tie) choose any one arbitrarily.
Step 3:
In the selected row or column as by step (2) find out the cell having the least cost. Allocate to
this cell as much as possible depending on the capacity and requirements.
Step 4:
Delete the row or column which is fully exhausted. Again compute the column and row
penalties for the reduced transportation table and then go to step (2). Repeat the procedure
until all the rim requirements are satisfied.

Algorithm of MODIFIED DISTRIBUTION (MODI) METHOD
Step 1:
For an initial basic feasible solution with (m+n-1) occupied (basic) cells, calculate ui and vj
values for rows and columns respectively using the relationship Cij = ui + vj for all allocated
cells only. To start with assume any one of the ui or vj to be zero.
Step 2:
For the unoccupied (non-basic) cells, calculate the cell evaluations or the net evaluations as
ij = Cij (ui + vj).
Step 3:
a) If all ij > 0, the current solution is optimal and unique.
b) If any ij = 0, the current solution is optimal, but an alternate solution exists.
c) If any ij < 0, then an improved solution can be obtained; by converting one of the
basic cells to a non basic cells and one of the non basic cells to a basic cell. Go to step
IV.