Transportation Problem:-

The transportation problem is a special type of linear programming problem where the ‘objective is
to minimise the cost of distributing a product from a number of sources or origins to a number of
destinations. Because of its special structure the usual simplex method is not suitable for solving
transportation problems. These problems require a special method of solution. The origin of a
transportation problem is the location from which shipments are dispatched. The destination of a
transportation problem is the location to which shipments are transported. The unit transportation
cost is the cost of transporting one unit of the consignment from an origin to a destination.

Balanced Transportation Problem:-Balanced Transportation Problem is a transportation

problem where the total availability at the origins is equal to the total requirements at the
destinations. For example, in case the total production of 4 factories is 1000 units and total
requirements of 4 warehouses is also 1000 units, the transportation problem is said to be a
balanced one.

Unbalanced Transportation Problem:-Unbalanced transportation problem is a transportation

problem where the total availability at the origins is not equal to the total requirements at the
destinations. For example, in case the total production of 4 factories is 1000 units and total
requirements of 4 warehouses is 900 units or 1,100 units, the transportation problem is said to be an
unbalanced one. To make an unbalanced transportation problem, a balanced one, a dummy origins)
or a dummy destination (s) (as the case may be) is introduced with zero transportation cost per unit.

Dummy Origin/Destination
A dummy origin or destination is an imaginary origin or destination with zero cost introduced to
make an unbalanced transportation problem balanced. If the total supply is more than the total
demand we introduce an additional column which will indicate the surplus supply with
transportation cost zero. Likewise, if the total demand is more than the total supply, an additional
row is introduced in the Table, which represents unsatisfied demand with transportation cost
zero.

Practical Steps Involved In Solving Transportation Problems Of Minimization Type:-

The practical steps involved in solving transportation problems of minimization type are given
below:

Step 1- See whether Total Requirements are equal to Total Availability; if yes, go to Step 2; if not,
Introduce a Dummy Origin/Destination, as the case may be, to make the problem a balanced one
Taking Transportation Cost per unit as zero for each Cell of Dummy Origin/Destination or as
otherwise indicated.

Step 2- Find Initial Feasible Solution by following either the Least Cost Method(or LCM) or North-
West Comer Method (or NWCM) or Vogel’s Approximation Method (or VAM)

Step 3- After obtaining the Initial Feasible Solution Table, see whether Total Number of Allocations
are equal to “m + n - 1”,; if yes, go to Step 4; if not, introduce an infinitely small quantity
Independent Cell. (i.e., for which no Loop can be formed).

Note: Introduce as many number of ‘e’ as the total number of allocated cells falls below “m + n -1”.

Step 4-

Optimality Test: Carry out the Optimality Test on the InitialSolution Table to find out the
optimal solution.

Step 5 – Calculate the Total Minimum Cost = S (X ij x C ij),

where, X = Units Allocated to a Cell;

C = Shipping Cost per Unit of a Cell;

i = Row Number;
j = Column Number

Example : A concrete company transports concrete from three plants, 1, 2 and 3, to three
construction sites, A, B and C. The plants are able to supply the following numbers of tons per week:
Plant Supply (capacity) 1 300 2 300 3 100 .The requirements of the sites, in number of tons per
week, are: Construction site Demand (requirement) A 200 B 200 C 300.The unit cost of
Transpotation are given in the cells.

Transportation Table:

To A B C Supply
From
1 4 3 8 300
2 7 5 9 300
3 4 5 5 100
Demand 200 200 300

Methods for Obtaining Basic Feasible Solution for Transportation Problem

The first step in using the transportation method is to obtain a feasible solution, namely, the one
that satisfies the rim requirements (i.e. the requirements of demand and supply).

The initial feasible solution can be obtained by several methods. The commonly used methods are:

(I) North west Corner Method

(ꗘꗘ 쿀 Least Cost Method (LCM)

(III)Vogal’s Approximation Method (VAM)

Initial solution

(I) North West Corner Method :

The North West corner rule is a method for computing a basic feasible solution of a transportation
problem where the basic variables are selected from the North – West corner (i.e., top left corner).

Steps:

1. Select the north west (upper left-hand) corner cell of the transportation table and allocate as
many units as possible equal to the minimum between available supply and demand requirements,
i.e., min (s1, d1).

2. Adjust the supply and demand numbers in the respective rows and columns allocation.

3. If the supply for the first row is exhausted then move down to the first cell in the second row.
4. If the demand for the first cell is satisfied then move horizontally to the next cell in the second
column.

5. If for any cell supply equals demand then the next allocation can be made in cell either in the
next row or column.

6. Continue the procedure until the total available quantity is fully allocated to the cells as required.

7. Check to make sure that the capacity and requirements are met.

Solution

To A B C Supply
From
1 4 (200) 3(100) 8 300(100)
2 7 5(100) 9(200) 300(200)
3 4 5 5(100) 100
Demand 200 200(100) 300

Total number of allocation=5

m+n -1=3+3-1 =5

m=no. of rows

n= no. of columns

Total cost=4*200+3*100+5*100+9*200+5*100= Rs.4300

Problem:Determine the initial basic feasible solution (IBFS) by North West Corner Method

Origin/Destination D1 D2 D3 D4 Supply
S1 21(6) 16(5) 15 3 11
S2 17 18(5) 14(8) 23 13
S3 32 27 27(4) 41(15) 19
Demand 6 10 12 15

Calculation of Total Cost:

Total Cost= 21*6+16*5+18*5+14*8+27*4+41*15=Rs.1131

Aˢˢˢg˘m˖˘t
Exercise 1.BBA SEM V (2016-19)

Source/Destination D1 D2 D3 D4 Supply

S1 6 2 3 9 10

S2 4 5 5 1 15

S3 7 3 4 8 4

S4 5 1 2 7 6

Demand 6 10 15 4 35

Exercise 2. BBA SEM V(2016-2019)

Factory/Retail R1 R2 R3 R4 Supply
F1 21 16 25 13 11
F2 17 18 14 23 13
F3 32 27 18 41 19
Demand 6 10 12 15 43

Exercise 3. (2015-2018)

Factory/Warehouse W1 W2 W3 W4 Supply
F1 95 80 70 60 70
F2 75 65 60 50 40
F3 70 45 50 40 90
F4 60 40 40 30 30
Demand 40 50 60 60 210/230

VA 㔍 㔍˖t⥆oi

Exercise 4. (2015-2018)
Manufacturing A B C D E Supply
centre/Depot

P 4 1 3 4 4 60

Q 2 3 2 2 3 35

R 3 5 2 5 4 40

Demand 22 45 20 18 30 135

Exercise 5.(2015-2018)

Factory/Warehouse W1 W2 W3 W4 Supply

F1 21 16 25 13 22

F2 17 18 14 23 35

F3 32 27 18 41 50

Demand 25 25 7 50 107

Vogal,s Approximation Method

Steps:

1. Find the penalty cost by finding the difference between the lowest costs and the next lowest costs
of each row and column.

2. Among the penalties find the maximum penalty cost from the table.If maximum penalty is
found in more than one row or column,the choose any one of them.

3. Find out the cell in the selected row or column that has least cost.Allocate to this cell as much as
possible depending on the supply and demand requirement.

4. Again compute the column and row penalties for reduced transportation table and go to repeat
the step 2.

Ea˖brˢˢ˖ 1
Source/De D1 D2 D3 Supply
stination
S1 0 2 1 6

S2 2 1 5 7

S3 2 4 3 7

Demand 5 5 10 20