Mathematical Formulation of Transportation Problem

Let there be three units, producing scooter, say, A1, A2 and A3 from where the scooters are to
be supplied to four depots say B1, B2, B3 and B4.
Let the number of scooters produced at A1, A2 and A3 be a1, a2 and a3 respectively and the
demands at the depots be b1, b2, b3 and b4 respectively.
We assume the condition
a1+a2+a3 = b1+b2 + b3 + b4
i.e., all scooters produced are supplied to the different depots.
Let the cost of transportation of one scooter from A1 to B1 be c11. Similarly, the cost of
transportations in other casus are also shown in the figure and Table.
Mathematical Formulation of Transportation Problem

With the help of the above information we can construct the following table:

Deposit To B1 To B2 To B3 To B4 Stock

Time

From A1 x11(c11) x12(c12) x13(c13) x14(c14) a1

From A2 x21(c21) x22(c22) x23(c23) x24(c24) a2

From A3 x31(c31) x32(c32) x33(c33) x34(c34) a3

Requirement b1 b2 b3 b4
 Solution of The Transportation Problem
Let us consider the numerical version of the problem stated in the introduction and the
mathematical formulation of the same in the next section, as below in Table 2.

Deposit B1 B2 B3 B4 Stock

Unit
A1 c11=2 c12=3 c13=5 c14=1 a1=8
A2 c21=7 c22=3 c23=4 c24=6 a2=10
A3 c31=4 c32=1 c33=7 c34=2 a3=20
Requirement b1 = 6 b2 = 8 b3 = 9 b4 = 15 = 38

(All terms are in hundreds)

In order to find the solution of this transportation problem we have to follow the steps
given below.
A) Initial basic feasible solution
B) Test for optimization.
 Solution of The Transportation Problem
A) Initial Basic Feasible Solution:
There are three different methods to obtain the initial basic feasible solution viz.
I) North-West Corner Rule:
In this method we distribute the available units in rows and column in such a way that the sum
will remain the same. We have to follow the steps given below.
a) Start allocations from north-west corner, i.e., from (1,1) position. Here min (a1, b1), i.e., min
(8,6)=6 units. Therefore, the maximum possible units that can be allocated to this position is 6,
and write it as 6(2) in the (1, 1) position of the table. This completes the allocation in the first
column and cross the other positions,
i.e., (2,1) and (3,1) in the column. (see Table 3)
Deposit Unit B1 B2 B3 B4 Stock
A1 6(2) 8–6=2
A2 × 10
A3 × 20
Requirement 6–6=0 8 9 15 32
 Solution of The Transportation Problem
Table 3
b) After completion of step (a), come across the position (1,2). Here min (8–6,8)=2
units can be allocated to this position and write it as 2(3). This completes the
allocations in the first row and cross the other positions, i.e., (1,3) and (1,4) in this
row (see Table 4).

Deposit Unit B1 B2 B3 B4 Stock

A1 6(2) × × 2–2=0

A2 × 10

A3 × 20

Requirement 0 8–2=6 9 15 30
 Solution of The Transportation Problem

Table 4
c) Now come to second row, here the position (2, 1) is already been struck off, so
consider the position (2, 2). Here min (10, 8–2) =6 units can be allocated to this
position and write it as 6(3). This completes the allocations in second column so
strike off the position (3, 2) (see Table 5)

Deposit Unit B1 B2 B3 B4 Stock

A1 6(2) 2(3) × × 0
A2 × 6(3) 10-6=4
A3 × × 20
Requirement 0 0 9 15 24
 Solution of The Transportation Problem
Table 5:
d) Again consider the position (2,3). Here, min (10–6,9)=4 units can be
allocated to this position and write it as 4(4). This completes the allocations in
second row so struck off the position (2,4) (see Table 6).

Deposit Unit B1 B2 B3 B4 Stock

A1 6(2) 2(3) × × 0
A2 × 6(3) 4(4) × 0
A3 × × 20
Requirement 0 0 9–4=5 15 20
 Solution of The Transportation Problem
Table 6:
e) In the third row, positions (3,1) and (3,2) are already been struck off so consider the position
(3,3) and allocate it the maximum possible units, i.e., min (20,9–4)=5 units and write it as 5(7).
Finally, allocate the remaining units to the position (3,4), i.e., 15 units to this position and write
it as 15(2).
Keeping in mind all the allocations done in the above method complete the table as follows:

Deposit B1 B2 B3 B4 Stock
Unit
A1 6(2) 2(3) × × 8

A2 × 6(3) 4(4) × 10

A3 × × 5(7) 15(2) 20

Requireme 6 8 9 15 38
nt
 Solution of The Transportation Problem
Table 7:
From the above table calculate the cost of transportation as 6×2 + 2×3 + 6×3 + 4×4 + 5×7 + 15×2
= 12 + 6 + 18 + 16 + 35 + 30
= 117
i.e., Rs. 11700.
(II) Lowest Cost Entry Method:
In this method we start with the lowest cost position. Here it is (1,4) and (3,2) positions, allocate the
maximum possible units to these positions, i.e., 8 units to the position (1,4) and 8 units to position
(3,2), write them as 8(1)and 8(1) respectively, then strike off the other positions in row 1 and also in
column 2, since all the available units are distributed to these positions.
Deposit Unit B1 B2 B3 B4 Stock

A1 x x × 8(1) 8

A2 × x 10

A3 8 (1) x 12

Requirement 6 0 9 7 22
 Solution of The Transportation Problem
Table 8:
Consider the next higher cost positions, i.e., (1, 1) and (3, 4) positions, but the
position (1,1) is already been struck off so we can’t allocate any units to this
position. Now allocate the maximum possible units to position (3,4), i.e., 7 units as
required by the place and write it as 7(2). Hence the allocations in the column 4 is
complete, so strike off the (2,4) position.
Deposit Unit B1 B2 B3 B4 Stock

A1 x x × 8(1) 0

A2 × x 10

A3 8 (1) 7(2) 5

Requirement 6 0 9 0 15
 Solution of The Transportation Problem
Again consider the next higher cost position, i.e., (1,2) and (2,2) positions, but these
positions are already been struck off so we cannot allocate any units to these positions.
Consider the next higher positions, i.e., (2,3) and (3,1) positions, allocate the maximum
possible units to these positions, i.e., 9 units to position (2,3) and 5 units to position (3,1),
write them as 9(4) and 5(4) respectively. In this way allocation in column 3 is complete so
strike off the (3,3) position.

Deposit Unit B1 B2 B3 B4 Stock

A1 x x × 8(1) 0

A2 x 9(4) x 1

A3 5(4) 8 (1) x 7(2) 0

Requirement 1 0 0 0 1
 Solution of The Transportation Problem
Now only the position (2,1) remains and it automatically takes the allocation 1 to
complete the total in this row, therefore, write it as 1(7).
With the help of the above facts complete the allocation table as given below.

Deposit B1 B2 B3 B4 Stock
Unit

A1 x x × 8(1) 8

A2 1(7) x 9(4) x 10

A3 5(4) 8 (1) x 7(2) 20

Requireme 6 8 9 15 38
nt
 Solution of The Transportation Problem
Table 11:
From the above facts, calculate the cost of transportation as
8×1 + 1×7 + 9×4 + 5×4 + 8×1 + 7×2
= 8 + 7 + 36 + 20 + 8 + 14
= 93
i.e., Rs. 9300.

III) Vogel’s Approximation Method:

Write the difference of minimum cost and next to minimum cost against each row in the penalty
column.(This difference is known as penalty). Red colour
Write the difference of minimum cost and next to minimum cost against each column in the penalty
row.(This difference is known as penalty). Deposit B1 B2 B3 B4 Stock Penalties

Green Colour Unit

A1 (2) (3) (5) (1) 8 (1)
A2 (7) (3) (4) (6) 10 (1)
A3 (4) (1) (7) (2) 20 (1)
Requireme 6 8 9 15 38
nt
Penalties (2) (2) (1) (1)
 Solution of The Transportation Problem
Table 12
b) Identify the maximum penalties. In this case it is at column one and at column two.
.
Consider any of the two columns, (here take first column) and allocate the
maximum units to the place where the cost is minimum (here the position (1,1) has
minimum cost so allocate the maximum possible units, i.e., 6 units to this position).

Deposit Unit B1 B2 B3 B4 Stock Penalties

A1 (2) (3) (5) (1) 8 (1)

A2 (7) (3) (4) (6) 10 (1)
A3 (4) (1) (7) (2) 20 (1)
Requirement 6 8 9 15 38

Penalties (2) (2) (1) (1)

 Solution of The Transportation Problem
Table 12

. b) Now write the remaining stock in row one. After removing the first column and then
by repeating the step (a), we obtain as follows :
Deposit Unit B1 B2 B3 B4 Stock Penalties

A1 (2) (3) (5) (1) 8 (1)

A2 (7) (3) (4) (6) 10 (1)
A3 (4) (1) (7) (2) 20 (1)
Requirement 6 8 9 15 38

Penalties (2) (2) (1) (1)

Delete Deposit Unit B2 B3 B4 Stock Penalties

column A1 (3) (5) (1) 2 (2)
B1 A2 (3) (4) (6) 10 (1)
A3 (1) (7) (2) 20 (1)
Requirement 8 9 15 32
Penalties (2) (1) (1)
 Solution of The Transportation Problem
Table 13:
c) Identify the maximum penalties. In this case it is at row one and at column
two. Consider any of the two (let it be first row) and allocate the maximum
possible units to the place where the cost is minimum (here the position (1,4)
has minimum cost so allocate the maximum possible units, i.e., 2 units to this
position).
Deposit Unit B2 B3 B4 Stock Penalties
A1 (3) (5) (1) 2 (2)
A2 (3) (4) (6) 10 (1)
A3 (1) (7) (2) 20 (1)
Requirement 8 9 15 32
Penalties (2) (1) (1)
 Solution of The Transportation Problem
Table 13:
c) Now write the remaining stock in column four. After removing the first row
and by repeating the step (a), we obtain table 14 as given below :
Deposit Unit B2 B3 B4 Stock Penalties
A1 (3) (5) (1) 2 (2) Delete
A2 (3) (4) (6) 10 (1) Row 1
A3 (1) (7) (2) 20 (1)
Requirement 8 9 15 32
Penalties (2) (1) (1)

Deposit Unit B2 B3 B4 Stock Penalties

A2 (3) (4) (6) 10 (1)

A3 (1) (7) (2) 20 (1)
Requirement 8 9 13 32
Penalties (2) (3) (4)
 Solution of The Transportation Problem
Table 14:
d) Identify the maximum penalties. In this case it is at column four. Now allocate the
maximum possible units to the minimum cost position (here it is at (3,4) position and
allocate maximum possible units, i.e., 13 to this position).

Deposit Unit B2 B3 B4 Stock Penalties

A2 (3) (4) (6) 10 (1)

A3 (1) (7) (2) 20 (1)
Requirement 8 9 13 32
Penalties (2) (3) (4)
 Solution of The Transportation Problem
Table 14:
d) Now write the remaining stock in row three. After removing the fourth column and
then by repeating the step (a) we obtain table 15 as given below.
Deposit Unit B2 B3 B4 Stock Penalties

A2 (3) (4) (6) 10 (1)

A3 (1) (7) (2) 20 (1)
Requirement 8 9 13 32
Penalties (2) (3) (4)

Delete Deposit Unit B2 B3 Stock Penalties

Column B4 A2 (3) (4) 10 (1)

A3 (1) (7) 7 (6)

Requirement 8 9

Penalties (2) (3)

 Solution of The Transportation Problem
Table 15:
e) Identify the maximum penalties. In this case it is at row three. Now allocate the maximum
possible units to the minimum cost position (here it is at (3,2) position and allocate maximum
possible units, i.e., 7 to this position). Now in order to complete the sum, (2,2) position will take 1
unit and (2,3) position will be allocated 9 units.
This completes the allocation and with the help of the above information draw table 16 as under.

Unit B1 B2 B3 B4 Stock
A1 6 (2) 2 (1) 8
A2 1 (3) 9 (4) 10
A3 7 (1) 13 (2) 20
Requirement 6 8 9 15 38
 Solution of The Transportation Problem
Table 16:

From the above facts calculate the cost of transportation as

6×2 + 2×1 + 1×3 + 9×4 + 7×1 + 13×2
= 12 + 2 + 3 + 36 + 7 + 26
= 86
i.e., Rs. 8600.
Note:
After calculating the cost of transportation by the above three methods, one thing
is clear that Vogel’s approximation method gives an initial basic feasible solution which is
much closer to the optimal solution than the other two methods. It is always worth while to
spend some time finding a “good” initial solution, because it can considerably reduce the
total number of iterations required to reach an optimal solution.