Module 4: Transportation Problem and Assignment problem

Transportation problem is a special kind of Linear Programming Problem (LPP) in which

goods are transported from a set of sources to a set of destinations subject to the supply and demand
of the sources and destination respectively such that the total cost of transportation is minimized. It is
also sometimes called as Hitchcock problem.

Types of Transportation problems:

Balanced: When both supplies and demands are equal then the problem is said to be a balanced
transportation problem.
Unbalanced: When the supply and demand are not equal then it is said to be an unbalanced
transportation problem. In this type of problem, either a dummy row or a dummy column is added
according to the requirement to make it a balanced problem. Then it can be solved similar to the
balanced problem.

Methods to Solve:
To find the initial basic feasible solution there are three methods:
1. NorthWest Corner Cell Method.
2. Least Call Cell Method.
3. Vogel’s Approximation Method (VAM).
Basic structure of transportation problem:

In the above table D1, D2, D3 and D4 are the destinations where the products/goods are to be
delivered from different sources S1, S2, S3 and S4. Si is the supply from the source Oi. dj is the
demand of the destination Dj. Cij is the cost when the product is delivered from source Si to
destination Dj.

a)Transportation Problem : (NorthWest Corner Method)

An introduction to Transportation problem has been discussed in the previous Section, in this,
finding the initial basic feasible solution using the NorthWest Corner Cell Method will be discussed.

Explanation: Given three sources O1, O2 and O3 and four destinations D1, D2, D3 and D4. For the
sources O1, O2 and O3, the supply is 300, 400 and 500 respectively.

The destinations D1, D2, D3 and D4 have demands 250, 350, 400 and 200 respectively.
Solution: According to North West Corner method, (O1, D1) has to be the starting point i.e. the
north-west corner of the table. Each and every value in the cell is considered as the cost per
transportation. Compare the demand for column D1 and supply from the source O1 and allocate the
minimum of two to the cell (O1, D1) as shown in the figure.

The demand for Column D1 is completed so the entire column D1 will be canceled. The supply from
the source O1 remains 300 – 250 = 50.
Now from the remaining table i.e. excluding column D1, check the north-west corner i.e. (O1,
D2) and allocate the minimum among the supply for the respective column and the rows. The supply
from O1 is 50 which is less than the demand for D2 (i.e. 350), so allocate 50 to the cell (O1, D2).

Since the supply from row O1 is completed cancel the row O1. The demand for
column D2 remain 350 – 50 = 50.

XXFrom the remaining table the north-west corner cell is (O2, D2). The minimum among the supply
from source O2 (i.e 400) and demand for column D2 (i.e 300) is 300, so allocate 300 to the cell (O2,
D2). The demand for the column D2 is completed so cancel the column and the remaining supply
from source O2 is 400 – 300 = 100.
Now from remaining table find the north-west corner i.e. (O2, D3) and compare the O2supply (i.e.
100) and the demand for D2 (i.e. 400) and allocate the smaller (i.e. 100) to the cell (O2, D2). The
supply from O2 is completed so cancel the row O2. The remaining demand for
column D3 remains 400 – 100 = 300.

Proceeding in the same way, the final values of the cells will be:

Note: In the last remaining cell the demand for the respective columns and rows are equal which was
cell (O3, D4). In this case, the supply from O3 and the demand for D4 was 200which was allocated
to this cell. At last, nothing remained for any row or column.

Now just multiply the allocated value with the respective cell value (i.e. the cost) and add all of
them to get the basic solution i.e. (250 * 3) + (50 * 1) + (300 * 6) + (100 * 5) + (300 * 3) + (200 *
2) = 4400

a) Transportation Problem: (Least Cost Cell Method)

The North-West Corner method has been discussed in the previous session. In this session,
the Least Cost Cell method will be discussed.

Solution: According to the Least Cost Cell method, the least cost among all the cells in the table has
to be found which is 1 (i.e. cell (O1, D2)).

Now check the supply from the row O1 and demand for column D2 and allocate the smaller value to
the cell. The smaller value is 300 so allocate this to the cell. The supply from O1 is completed so
cancel this row and the remaining demand for the column D2 is 350 – 300 = 50.

Now find the cell with the least cost among the remaining cells. There are two cells with the least
cost i.e. (O2, D1) and (O3, D4) with cost 2. Lets select (O2, D1). Now find the demand and supply
for the respective cell and allocate the minimum among them to the cell and cancel the row or
column whose supply or demand becomes 0 after allocation.

Now the cell with the least cost is (O3, D4) with cost 2. Allocate this cell with 200 as the demand is
smaller than the supply. So the column gets canceled.

There are two cells among the unallocated cells that have the least cost. Choose t h e
c e l l w h i c h h a s t h e l e a s t a l l o c a t i o n (O3, D2). Allocate this cell with a minimum among
the supply from the respective row and the demand of the respective column. Cancel the row or
column with zero value.
 Now the cell with the least cost is (O3, D3). Allocate the minimum of supply and demand and cancel
the row or column with zero value.

The only remaining cell is (O2, D3) with cost 5 and its supply is 150 and demand is 150 i.e. demand and supply
both are equal. Allocate it to this cell.

Now just multiply the cost of the cell with their respective allocated values and add all of them to get
the basic solution i.e. (300 * 1) + (25 * 2) + (150 * 5) + (50 * 3) + (250 * 3) + (200 * 2) = 2400

Transportation Problem: (Vogel’s Approximation Method)

 Solution:
 For each row find the least value and then the second least value and take the absolute difference
of these two least values and write it in the corresponding row difference as shown in the image
below. In row O1, 1 is the least value and 3 is the second least value and their absolute
difference is 2. Similarly, for row O2 and O3, the absolute differences are 3 and 1 respectively.
 For each column find the least value and then the second least value and take the absolute
difference of these two least values then write it in the corresponding column difference as
shown in the figure. In column D1, 2 is the least value and 3 is the second least value and their
absolute difference is 1. Similarly, for column D2, D3and D3, the absolute differences
are 2, 2 and 2 respectively.

These value of row difference and column difference are also called as penalty. Now select the
maximum penalty. The maximum penalty is 3 i.e. row O2. Now find the cell with the least cost in row
O2 and allocate the minimum among the supply of the respective row and the demand of the
respective column. Demand is smaller than the supply so allocate the column’s demand i.e. 250
to the cell. Then cancel the column D1
 From the remaining cells, find out the row difference and column difference.

 Again select the maximum penalty which is 3 corresponding to row O1. The least-cost
cell in row O is O1, D2) with cost 1. Allocate the minimum among supply and demand from
the respective row and column to the cell. Cancel the row or column with zero value
  Now find the row difference and column difference from the remaining cells.

 Now select the maximum penalty which is 7 corresponding to column D4. The least cost cell in
column D4 is (O3, D4) with cost 2. The demand is smaller than the supply for cell (O3, D4).
Allocate 200 to the cell and cancel the column.
Find the row difference and the column difference from the remaining cells

 the maximum penalty is 3 corresponding to the column D2. The cell with the least value in
D2 is (O3, D2). Allocate the minimum of supply and demand and cancel the column.
Now there is only one column so select the cell with the least cost and allocate the value.

there is only one cell so allocate the remaining demand or supply to the cell
No balance remains. So multiply the allocated value of the cells with their corresponding cell cost
and add all to get the final cost i.e. (300 * 1) + (250 * 2) + (50 * 3) + (250 * 3) + (200 * 2) +(150*%) =
2850

Transportation Problem: Unbalanced problem

In this session, the method to solve the unbalanced transportation problem will be discussed.
Below transportation problem is an unbalanced transportation problem.

The problem is unbalanced because the sum of all the supplies i.e.

Sum O1, O2, O3 and O4 is not equal to the sum of all the demands i.e. D1, D2, D3, D4 and D5.
Solution:

In this type of problem, the concept of a dummy row or a dummy column will be used. As in this
case, since the supply is more than the demand so a dummy demand column will be added and a
demand of (total supply – total demand) will be given to that column i.e. 117 – 95 = 22 as shown in
the image below. If demand were more than the supply then a dummy supply row would have been
added.
Now that the problem has been updated to a balanced transporttation problem, it can be solved using any one
of the following methods to solve a balanced transportation problem as discussed in the earlier posts:

1. NorthWest Corner Method

2. Least Cost Cell Method
3. Vogel’s Approximation Method

Optimal solution: MODI Method – UV Method

There are two phases to solve the transportation problem. In the first phase, the initial basic feasible
solution has to be found and the second phase involves optimization of the initial basic feasible
solution that was obtained in the first phase. There are three methods for finding an initial basic
feasible solution,

1. NorthWest Corner Method

2. Least Cost Cell Method
3. Vogel’s Approximation Method
Will discuss how to optimize the initial basic feasible solution through an explained example.
Consider the below transportation problem.

Solution:
Step 1: Check whether the problem is balanced or not.
If the total sum of all the supply from sources O1, O2, and O3 is equal to the total sum of all the
demands for destinations D1, D2, D3 and D4 then the transportation problem is a balanced
transportation problem.
Note: If the problem is not unbalanced then the concept of a dummy row or a dummy
column to transform the unbalanced problem to balanced can be followed as discussed.
Step 2: Finding the initial basic feasible solution.
Any of the three aforementioned methods can be used to find the initial basic feasible
solution. Here, NorthWest Corner Method will be used. And according to the NorthWest
Corner Method this is the final initial basic feasible solution:

Now, the total cost of transportation will be (200 * 3) + (50 * 1) + (250 * 6) + (100 * 5) +
(250 * 3) +
(150 * 2) = 3700.
Step 3: U-V method to optimize the initial basic feasible solution. The following is the
initial basic feasible solution:

For U-V method the values ui and vj have to be found for the rows and the columns
respectively. As there are three rows so three ui values have to be found i.e. u1 for the first
row, u2 for the second row and u3 for the third row.Similarly, for four columns four vj
values have to be found i.e. v1, v2, v3 and v4. Check the image below:
here is a separate formul to find ui and vj,

ui + vj = Cij where Cij is the cost value only for the allocated cell.

Before applying the above formula we need to check whether m + n – 1 is equal to the
total number of allocated cells or not where m is the total number of rows and n is the
total number of columns.

In this case m = 3, n = 4 and total number of allocated cells is 6 so m + n – 1 = 6. The case

when m + n – 1 is not equal to the total number of allocated cells will be discussed in the
later posts.
Now to find the value for u and v we assign any of the three u or any of the four v as 0.
Let we assign u1 = 0 in this case. Then using the above formula we will get v1 = 3 as u1 +
v1 = 3 (i.e. C11) and v2 = 1 as u1 + v2 = 1 (i.e. C12). Similarly, we have got the value for v2 =
3 so we get the value for u2 = 5 which implies v3 = 0. From the value of v3 = 0 we get u3 =
3which implies v4 = -1.

Now, compute penalties using the formula Pij = ui + vj – Cij only for unallocated cells. We
have two unallocated cells in the first row, two in the second row and two in the third row.
Let’s compute this one by one.
 1. For C13, P13 = 0 + 0 – 7 = -7 (here C13 = 7, u1 = 0 and v3 = 0)

2. For C14, P14 = 0 + (-1) -4 = -5

3. For C21, P21 = 5 + 3 – 2 = 6

4. For C24, P24 = 5 + (-1) – 9 = -5

5. For C31, P31 = 3 + 3 – 8 = -2

6. For C32, P32 = 3 + 1 – 3 = 1

The Rule: If we get all the penalties value as zero or negative values that mean the
optimality is reached and this answer is the final answer. But if we get any positive value
means we need to proceed with the sum in the next step.
Now find the maximum positive penalty. Here the maximum value is 6 which
corresponds to C21 cell. Now this cell is new basic cell. This cell will also be included in
the solution.

The rule for drawing closed-path or loop. Starting from the new basic cell draw a closed-
path in such a way that the right angle turn is done only at the allocated cell or at the
new basic cell.
Assign alternate plus-minus sign to all the cells with right angle turn (or the corner) in the
loop with plus sign assigned at the new basic cell.

.
Check the total number of allocated cells is equal to (m + n – 1). Again find u values and v
values using the formula ui + vj = Cij where Cij is the cost value only for allocated cell.
Assign u1 = 0 then we get v2 = 1. Similarly, we will get following values for ui and vj.

Find the penalties for all the unallocated cells using the formula Pij = ui
+ vj – Cij. 1. For C11, P11 = 0 + (-3) – 3 = -6

2. For C13, P13 = 0 + 0 – 7 = -7

3. For C14, P14 = 0 + (-1) – 4 = -5

4. For C24, P24 = 5 + (-1) – 9 = -5

5. For C31, P31 = 0 + (-3) – 8 = -11

6. For C32, P32 = 3 + 1 – 3 = 1

There is one positive value i.e. 1 for C32. Now this cell becomes new basic cell.

Now draw a loop starting from the new basic cell. Assign alternate plus and minus sign
with new basic cell assigned as a plus sign.
Select the minimum value from allocated values to the cell with a minus sign. Subtract this
value from the cell with a minus sign and add to the cell with a plus sign. Now the solution
looks as shown in the image below:

Check if the total number of allocated cells is equal to (m + n – 1). Find u and v values as
above.

Now again find the penalties for the unallocated cells as above.

1. For P11 = 0 + (-2) – 3 = -5

2. For P13 = 0 + 1 – 7 = -6

3. For P14= 0 + 0 – 4 = -4

4. For P22= 4 + 1 – 6 = -1

5. For P24= 4 + 0 – 9 = -5
 6. For P31= 2 + (-2) – 8 = -8

All the penalty values are negative values. So the optimality is reached.

Now, find the total cost i.e. (250 * 1) + (200 * 2) + (150 * 5) + (50 * 3) + (200 * 3) + (150
* 2) =
2450

Transportation Problem: Degeneracy in Transportation Problem

This session will discuss degeneracy in transportation problem through an explained
example.

Solution:
This problem is balanced transportation problem as total supply is equal to total demand.

Initial basic feasible solution:

Least Cost Cell Method will be used here to find the initial basic feasible solution. One
can also use NorthWest Corner Method or Vogel’s Approximation Method to find the
initial basic feasible solution.
 sing Least Cost Cell Method we get the following solution.

Optimization of the solution using U-V Method:

Check whether m + n – 1 = total number of allocated cells. In this case m + n – 1 = 4 + 5 –

1 = 8 where as total number of allocated cells are 7, hence this is the case of degeneracy in
transportation problem. So in this case we convert the necessary number (in this case it is
m + n – 1 – total number
of allocated cells i.e. 8 – 7 = 1) of unallocated cells into allocated cells to satisfy the above
condition.
Steps to convert unallocated cells into allocated cells:

Select the least cost unallocated independent cell and allocate a very negligible vale ‘e’ . The
cell is called independent if there cannot be a closed loop formation starting from “e”

There are 13 unallocated cells. Select the least value (i.e. 5 in this case) from unallocated
cells. There are two 5s here so you can select randomly any one. Lets select the cell with
star marked.
Check if there is any closed-loop formation starting from this cell. If a closed-loop is drawn from
this cell following the condition for closed-loop then it can be observed that this cell cannot be
reached to complete the closed-loop. So this cell will be selected and assigned a random value ‘e’.

: If the closed loop would have been formed from that cell then we would try another cell
with least value and do the same procedure and check whether closed loop is possible or
not.
Now total number of allocated cells becomes 8 and m + n – 1 = 4 + 5 – 1 = 8. Now this
solution can be optimized using U-V method. We get the below solution after performing
optimization using U-V method.
The presence of two ‘e’ in the final solution means after doing some iterations during
optimization, the condition for degeneracy will be met once again

While finding the total cost, just leave the ‘e’ and multiply the allocated value with its
cell’s cost value and add all of them. So, the transportation cost is (35 * 3) + (20 * 5) + (10
* 2) + (10 * 4) + (20*5) +(5*13) +(25*8) = 630