10-03-2017

Transportation Method
TRANSPORTATION PROBLEM You have 3 Distribution Centres(DCs) (A, B and C), with
specified available stocks and need to deliver a product to
4 customers ( D, E, F and G), with specified demand
There are specific unit costs Between DCs and Customers
March 6, 2017
D2

A 10
E4
B 10
F 12
C 10

G 12

Find the cheapest way to satisfy all demand

Unit Cost Matrix ONE MORE PROBLEM

D E F G Availability

A 10 9 8 7 10
B 10 11 4 5 10
C 8 7 4 8 10

Demand
2 4 12 12

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Destination
Distribution Area ONE MORE PROBLEM
S 1 2 3 Supply
o 12 18 14
1 6
u 30 10 8
r Refinery 2 5
c 20 25 12
8
3
e
Demand 4 8 7

Destination Destination
WH1 WH2 Supply WH1 WH2 Supply
80 215 80 215
S Pune 1000 S Pune 1000
o 100 108
1300 o 100 108
1300
Lucknow Lucknow
u u
102 68 102 68
r Jamshedpur 1200 r Jamshedpur 1200
c Demand c 0 0
200
Dummy
e 2300 1400 e
Demand 2300 1400

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Setting up the Transportation

Transportation Problem
Table
Plant 1 Project A 5
70 tons Projects Availability
50 tons 7 Plant 3
2 Plants A B C
70 tons
4
4 1 2 7 4 50
7 1
2 3 3 1 80
2 3 5 4 7 70
Plant 4 4 1 6 2 140
6 140 tons
Project C 3 Demand 70 90 180 340
90 tons 1
3 Cost of moving 1 ton from Plant 1 to Project A
Plant 2 Project B
80 tons 180 tons

THERE ARE MANY PRACTICAL CASES The Transportation Model Characteristics

MARUTI SUZUKI : Multiple factories and many A product ( products) to be transported from a number of sources
to a number of destinations at the minimum possible cost.
Storage yards
HUL : Multiple factories ( more than 20) and a Each source is able to supply a fixed number of units of the
product, and each destination has a fixed demand for the product.
large number of warehouses
The problem has constraints for supply at each source and demand
GODREJ SOAPS : Factories in MP, HP,
at each destination.
Pondycherry and Mumbai and many
warehouses All constraints are equalities in a balanced transportation model
where total supply equals total demand.
Wheat / Rice distribution : Many Food
Corporation of India warehouses and Constraints contain inequalities in unbalanced models where total
supply is not equal total demand.
distribution centres
GODREJ PERSONAL CARE: Factories in
Pondy, Goa, Sikkim, HP, and many
warehouses.

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THE PROBLEM IS TO FIND Xij

Defining Variables
TO
Define cij as the cost to ship one unit from source i to M N
destination j. M in c
i 1 j 1
ij x ij
Supply available at source i is Si
N

Demand required at destination j is dj.

s .t . j 1
x ij S i fo r i 1, , M

Si and dj for every i and j are known M

i 1
x ij d j fo r j 1, , N
Xij is the quantity to be shipped from source i ( i =1,m)
to destination j (j=1,n), and is the decision variable. x ij 0 fo r a ll i , j

Common methods Transportation algorithm

Steps
1) Find a feasible solution
Transportation algorithm The solution that satisfies all three constraints.
a) Demand constraint
b) Supply constraint
c) Flow constraint ( non negativity in X ij)
Linear Programming 2) Check for optimality condition ( How ? )
3) If the feasible solution obtained is not optimal, improve
the solution towards optimality ( How ? )
4) If the solution to be tested for optimality may not be
conducive for the optimality test.( degenerate).
How to find this condition ?
5) What steps to take to make the solution conducive for the
optimality test
6) What are the special situations and how to deal with them ?

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Generating Feasible Solution

EXAMPLE
DESTINATION
The common methods are
1 2 3 4 5 6 AVAILABLE
1) Arbitrary ( intuitive)
2) North West Corner Rule SOURCE 1 9 12 9 6 9 10 5
3) Least Unit Cost Rule 2 7 3 7 7 5 5 6
4) Vogels Approximation Method ( VAM) 3 6 5 9 11 3 11 2

4 6 8 11 2 2 10 9

REQUIRED 4 4 6 2 4 2
THE PROCEDURES ?

TRY TO FIND AN ARBITRARY FEASIBLE

SOLUTION NORTHWEST CORNER RULE
Steps:
1. Identify the cell in the upper left-hand corner
of the matrix
2. Assign as much as allocation as possible
to this cell
3. Update the matrix by deleting the row /
column satisfied and the column /row
element adjusted
4. Repeat steps 1 to 3 until all allocations
have been achieved

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NORTH-WEST CORNER RULE

LEAST UNIT COST RULE
To 1 2 3 4 5 6 Available
1. Identify the cell with the least unit cost in the
From
1 4 1 5 (1) (0)
matrix ( If there is tie, choose any one of the
tied cells)
2 3 3 6 (3) (3)
(0)
2. Assign as much as allocation as possible
3 2 2 (0)
to this cell
3. Update the matrix by deleting the row /
4 1 2 4 2 9(8)(6)(2)
(0)
column satisfied and the column /row
Required 4 ( 0) 4(3) 6(3) 2 4 (0) 2 (2) element adjusted
(0) (1) (0) (0) 4. Repeat steps 1 to 3 until all allocations
(0)
have been achieved
TOTAL COST=
4[9]+1[12]+3[3]+3[7]+2[9]+1[11]+2[2]+4[2]+2[10] = 139

LEAST UNIT COST RULE VOGELS APPROXIMATION METHOD (VAM)

To 1 2 3 4 5 6 A 1. Determine the penalty for each row and column.
From Penalty=
Difference between the smallest element and the next smallest
1 9 12 9 6 9 10 5 element
5 (0) Note : since the element is cost, penalty is the cost that would be
incurred for not placing the variable into the initial solution that has the
2 7 3 7 7 5 5 6 same smallest cost on that row/column.
4 2 (2),(0) 2. Locate the largest penalty and identify the row or column of that largest
penalty
3 6 5 9 11 3 11 2 3. Locate the smallest cost cell in that row/column. call it cell.
1 1 (1),(0) 4. Place into the cell the smaller of the requirement ( corresponding
column) or available ( corresponding row)
4 6 8 11 2 2 10 9 [placing the variable into solution].
3 2 4 (5),(3), Omit the row or column satisfied with this placement.
(0) Update the row or column not satisfied with this placement by suitable
R 4 4 6 2 4 2 reduction.
(1),(0) (0) (1),(0) (0) (0) (0) Update the penalty if required, for row/column remaining unsatisfied.
Repeat steps 2 to 7 until the solution is complete.
TOTAL COST=
5x9+4x3+2x5+1x6+1x9+3x6+2x2+2x4=112

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Vogels Approximation Method

Projects Avail-
Plant A B C ability
EXAMPLE
1 30 2 20 7 4 50 2 2 5 5
DESTINATION

2 3 3 80 1 80 1 2 3 4 5 6 AVAILABLE
2

3 5 70 4 7 70 1 9 12 9 6 9 10 5
1 1 1 1 SOURCE

4 40 1 6 100 2 140 1 1 5 2 7 3 7 7 5 5 6
3 6 5 9 11 3 11 2
Dem- 70 90 180 340
and 4 6 8 11 2 2 10 9
1 1 1
1 2 2 REQUIRED 4 4 6 2 4 2
1 2
3 3

To 1 2 3 4 5 6 A P To 1 2 3 4 5 6 A P
F F
1 9 12 9 6 9 10 5 3 1 9 12 9 6 9 10 5(0) 3(0)
5
2 7 3 7 7 5 5 6 2 2 7 3 7 7 5 5 6(4) 2(4)
4 2 (0) (0)

3 6 5 9 11 3 11 2 2 3 6 5 9 11 3 11 2 (1) 2(1)
1 1 (0) (3)

4 6 8 11 2 2 10 9 0 4 6 8 11 2 2 10 9(7) 0(4)
3 2 4 (3) (2)(3)
(0)
R 4 4 6 2 4 2 R 4(1) 4(0) 6(5) 2(0) 4(0) 2(0)
(0) (0)
P 0 2 2 4 1 5 P 0 (3) 2 2(0) 4 1 5

TOTAL COST= 5x9+4x3+2x5+1x6+1x9+3x6+2x2+4x2=112

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EXAMPLE FIND FEASIBLE SOLUTION

Northwest Corner Rule
Least Unit COST Rule
Vogels Approximation Method (VAM)

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SO FAR WE HAVE SEEN HOW TO TEST FOR OPTIMALITY ?

Relevance of transportation problem
How to find a feasible solution using
a) NWC rule
b) Least Unit cost method
c) VAM
d) Arbitrary method
The feasible solution obtained may be
optimal or not as it merely meets the
constraints

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EXAMPLE
EXAMPLE
DESTINATION

1 2 3 4 5 6 AVAILABLE
Consider the following example
SOURCE 1 9 12 9 6 9 10 5

2 7 3 7 7 5 5 6
3 6 5 9 11 3 11 2

4 6 8 11 2 2 10 9

REQUIRED 4 4 6 2 4 2

9 12 9 6 9 10 5
5
Consider the following feasible solution
7 3 7 7 5 5 6
3 1 2
6 5 9 11 3 11 2
1 1
6 8 11 2 2 10 9
3 2 4
4 4 6 2 4 2

Value of the solution = 112

Number of allocated ( occupied) cells = 9
Number of rows = 4
Number of Columns = 6

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STEPS
1) Determine a set of (m+n) numbers
Uj = 1,2,m
Vi = 1,2,.n
Such that for each occupied cell (r,s)
TEST THE SOLUTION FOR OPTIMALITY Cr,s = Ur + Vs
Cr,s = cost associated with an allocation from
source r to destination s

2) Using these Uj and Vi , carryout the cell evaluation for each vacant cell (i,j)
by means of the formula :
di,j = Ci,j - (Uj + Vi)

3) Examine the matrix after the cell evaluations for negative entries.
> if no cell has negative di,j , the solution under test is optimal.
> if no cell has negative di,j, and also that there are zero cells, then
there are multiple optimal solutions.
> Ifthere
>If thereare
arecells
cellswith
withnegative
nonnegative
di,j thendi,j , then under
solution solution under
test is nottest is
optimal
not optimal.

DETERMINATION OF UJ , Vi?
START WITH ZERO IN THE MOST OCCUPIED ROW 6 5 * 2 2 7 DETERMINATION OF UJ , Vi FOR
(ONLY FOR CONVENIENCE ) VACANT CELLS?
4 * * 0 0 *

9 0 * * 9 2 2 7

* 5 9 * * 7
3 7 5 -2

6 5 0 9 12 * 6 9 10 GET CI,J MATRIX FOR

VACANT CELLS.
6 2 2 0
7 * * 7 5 *

* * 9 11 3 11

6 5 9 2 2 7 * 8 11 * * 10

6 5 * 2 2 7 0

4 * * 0 0 * -2
3 7 * 4 7 3
* * 9 2 2 7 3 * * 7 5 *
0
* * 0 9 1 4 GET d ij = Cij- ( Uj+Vi )
* 5 9 * * 7 0
* 3 2 * * 3
6 5 9 2 2 7
All dij ARE NON-NEGATIVE.
DETERMINATION OF Uj , Vi FOR VACANT CELLS? HENCE THE SOLUTION UNDER TEST IS OPTIMAL.

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CONSIDER THE FOLLOWING NORTH-WEST CORNER RULE

FEASIBLE SOLUTION To 1 2 3 4 5 6 Available

From
1 4 1 5

2 3 3 6

3 2 2

4 1 2 4 2 9

Required 4 4 6 2 4 2

TOTAL COST=
4[9]+1[12]+3[3]+3[7]+2[9]+1[11]+2[2]+4[2]+2[10] = 139

STEPS
1) Determine a set of (m+n) numbers
Uj = 1,2,m
Vi = 1,2,.n
Such that for each occupied cell (r,s)
TEST THE SOLUTION FOR OPTIMALITY Cr,s = Ur + Vs
Cr,s = cost associated with an allocation from
source r to destination s

2) Using these Uj and Vi , carryout the cell evaluation for each vacant cell (i,j)
by means of the formula :
di,j = Ci,j - (Uj + Vi)

3) Examine the matrix after the cell evaluations for negative entries.
> if no cell has negative di,j , the solution under test is optimal.
> if no cell has negative di,j, and also that there are zero cells, then
there are multiple optimal solutions.
>
>IfIfthere
thereare
arecells
cellswith
withnegative
nonnegative
di,j thendi,j , then under
solution solution under
test is nottest is
optimal
not optimal.

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WHAT DID YOU OBSERVE ?
THE SOLUTION IS NOT OPTIMAL
HOW TO IMPROVE IT ??
TOWARDS OPTIMALITY
How to change a non optimal solution to
get the optimal solution. ?
1) Modified distribution method (MODI)
2) Stepping stone method
10-03-2017
WE WILL SEE
How to move to optimal solution ?
MODI
Compute the values of ui for each row and vj for
each column: set ui + vj = Cij for all occupied or
used cells.
Set any one ui or vj value as zero
Compute other ui and vj values.
Compute the opportunity cost for each unused
cell by the formula, Opportunity Cost =
Cij - ui - vj
Select the cell with the largest negative
opportunity cost and proceed to solve the
problem
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Setting up the Transportation

Transportation Problem
Table
Plant 1 Project A 5
70 tons Projects Availability
50 tons 7 Plant 3
2 Plants A B C
70 tons
4
4 1 2 7 4 50
7 1
2 3 3 1 80
2 3 5 4 7 70
Plant 4 4 1 6 2 140
6 140 tons
Project C 3 Demand 70 90 180 340
90 tons 1
3 Cost of moving 1 ton from Plant 1 to Project A
Plant 2 Project B
80 tons 180 tons

CONSIDER THE FOLLOWING MODI

FEASIBLE SOLUTION FEASIBLE SOLUTION
Projects Availability
Plant A B C
1 50 2 7 4 50

2 20 3 60 3 1 80

3 5 30 4 40 7 70

4 1 6 140 2 140

Demand 70 90 180 340

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MODI
MODI
Finding Ui and Vj using Crs of
Opportunity Cost of all unused cells
Occupied Cells
Projects Availability Projects Availability
ui ui
Plant A B C Plant A B C
1 50 2 7 4 50 1 50 2 7 4 50
0 0
+5 -1
2 20 3 60 3 1 80 2 20 3 60 3 1 80
1 -5
1
3 5 30 4 40 7 70 3 5 30 4 40 7 70
2 2
+1
4 1 6 140 2 140 4 1 6 140 2 140
-3 -3
+2 +7
Demand 70 90 180 340 Demand 70 90 180 340
vj 2 2 5 vj 2 2 5

MODI
WHAT DO YOU OBSERVE ?
Improved solution (1)
Projects Availability
ui
Plant A B C
1 50 2 7 4 50
0
+5 -1
2 20 3 60 20 3 40 1 80
- + -5
1
3 5 30 70 4 40 7 70
2
+1 + -
4 1 6 140 2 140
-3
+2 +7
Demand 70 90 180 340
vj 2 2 5

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CHECK IF THE SOLUTION MODI

OBTAINED IS OPTIMAL Improved solution (2)
Projects Availability
ui
Plant A B C
1 50 2 7 4 50
0
+5 +4
2 20 3 20 3 40 60 1 80
- + +5
1
3 5 70 4 7 70
2
+1
4 20 1 6 140 120 2 140
2
+ -3 +2 -
Demand 70 90 180 340
vj 2 2 0

CHECK IF THE SOLUTION MODI

OBTAINED IS OPTIMAL Improved solution (3)
Projects Availability
ui
Plant A B C
1 50 2 7 4 50
0
+2 +1
2 3 20 3 60 1 80
+3
-2
3 5 70 4 7 70
-1
+4 +5
4 20 1 6 120 2 140
-1
+2
Demand 70 90 180 340
vj 2 5 3

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MODI CONSIDER THE FOLLOWING

Final solution (3) FEASIBLE SOLUTION
As opportunity cost of all cells is non-negative
an optimal solution is reached.
From Plant 1 send 50 tons to Project A
From Plant 2 send 20 tons to Project B and 60
tons to Project C
From Plant 3 send 70 tons to Project B
From Plant 4 send 20 tons to Project A and 120
tons to project C
Total cost Rs 760.

CONSIDER THE FOLLOWING SOLUTION AND

TEST FOR OPTIMALITY WHAT DID YOU OBSERVE?
1 4 5 NOT ABLE TO FIND Ui & Vj

4 2 6
DEGENERATE CONDITION
2 2

3 2 4 9

4 4 6 2 4 2

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DEGENERACY
When do you come across this condition ?
a) Initial feasible solution
b) At some stage of the iteration , while
improving the solution
Why is it an issue ?
We cannot carry out the optimality test
HOW TO DEAL WITH
DEGENERATE CONDITION ?
Create solution ( new occupied ) cells
satisfying the following two conditions
1) The occupied cells are in independent
positions
2) The new occupied cells are assigned
with insignificant X ij (e)such that the
change in the total cost is negligible
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TEST FOR OPTIMALITY NEEDS
CERTAIN CONDITION TO BE SATISFIED
The optimality test is applicable to any
feasible solution of the m x n
transportation problem which satisfies the
following two conditions:
It consists of exactly (m+n-1) individual
allocations.
These allocations are in independent
positions.
INDEPENDENT POSITIONS
There is no loop among the occupied cells
Start from one occupied cell and try to
reach the same cell by alternating
horizontal and vertical lines, through other
occupied cells
You cannot , without reversing the route or
violating the row / column constraints
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INDEPENDENT POSITIONS

12 9 6 9 10 5
NON INDEPENDENT POSITIONS
5
There is loop among the occupied cells
7 3 7 7 5 5 6
3 1 2 Start from one occupied cell and try to
6 5 9 11 3 11 2 reach the same cell by alternating
1 1
6 8 11 2 2 10 9
horizontal and vertical lines, through other
3 2 4 occupied cells
4 4 6 2 4 2 You can , without reversing the route or
violating the row / column constraints

NON-INDEPENDENT
POSITIONS
* 1 4 5

4 1 1 6
* *
1 1 2
* * *
3 1 2 3 9
* *
4 4 6 2 4 2

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HOW TO DEAL WITH CONSIDER THE FOLLOWING SOLUTION AND

TEST FOR OPTIMALITY
DEGENERATE CONDITION
1 4 5

4 2 6

2 2

3 2 4 9

4 4 6 2 4 2

CHANGING DEGENERATE DEALING WITH

CONDITION DEGENERACY
1 4 5

e 4 2 6

2 2

3 2 4 9

4 4 6 2 4 2

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Degeneracy Degeneracy
When the number of used cells is more or If the used cells are less than m+n-1 it is
not possible to calculate all Ui and Vj
less than values.

m n 1 Such a situation may occur when demand and

If the number of used cells is more, then
either the formulation is incorrect or an
improper assignment has been made.
supply get exhausted simultaneously while
making initial assignments.
It may also occur when two cells become empty
when moving quantities on the closed path.
This is remedied by putting in a cell and
treating it as used or occupied.

Degeneracy During
Degeneracy Initial solution
operations
Projects Availability
Origins Destinations Supply
Plant A B C
A B C B ui
1 50 2 7 4 50
1 3 10 5 20 1 5 1 9 9 0

2 3 80 3 1 80 - + -18

2 2 10 34 8 1 30 4 3
-11 -13 + -
3 5 10 4 60 7 70
3 1 20 7 5 10 5 -17
+8 +17 +19
4 1 6 120 2 120
Demand 3 5 4 6 18
vj 10 20 5 27
Demand 50 90 180 320
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