Module IV

Transportation Model
Supply Demand
Point Point
C11 b1
a1 C12
C31

C21 b2
a2 C13
C24
b3
C14
a3 C34

b4
ai bj
i=1,2, ., m j=1,2, ,n
 Formulation of Transportation problem
Supply Demand
If Xij is the quantity transported from i to j Point Point
C11 b1
 C a1 C31
C12
Minimize Z = ij X ij
C21 b2
n a2
 X ij  ai
C13

i = 1, 2,....., m C24
b3
C14
j =1 a3 C34

b4
m

X
i =1
ij  bj j = 1, 2,....., n

X ij  0

 a  bi j

Cij  0
Types of Transportation Problem

1. Balanced Transportation Problem: It has

equations.
2. Unbalanced Transportation Problem: It has
inequalities.
 Balanced Transportation Problem
If Xij is the quantity transported from i to j

Minimize Z =  C ij X ij
n

X
j =1
ij = ai i = 1, 2,....., m
m

X
i =1
ij = bj j = 1, 2,....., n

 a = bi j

X ij  0
Cij  0
 Unbalanced Transportation Problem
If Xij is the quantity transported from i to j

Minimize Z =  C ij X ij
n

X
j =1
ij  ai i = 1, 2,....., m
m

X
i =1
ij  bj j = 1, 2,....., n

X ij  0

 a  bi j

Cij  0
 Solution of transportation problem

1. Identifying a basic feasible solution.

• North west corner rule
• Minimum cost method
• Penalty cost (Vogel’s Approximation)

2. Optimal Solution.
• Stepping stone method
• MODI method (Modified Distribution)
Considered Problem (Balanced Transportation Problem)
The following Transportation problem has 3 supply points and four demand points

4 6 8 8
40

6 8 6 7
60
Supply
5 7 6 8
50

20 30 50 50 150

Demand
 North west corner rule
4 6 8 8
40 20
20
6 8 6 7
60

5 7 6 8
50

20 30 50 50
4 6 8 8
40 20
20 20
6 8 6 7
60

5 7 6 8
50

20 30 10 50 50
4 6 8 8
40 20
20 20
6 8 6 7
60 50
10
5 7 6 8
50

20 30 10 50 50
4 6 8 8
40 20
20 20
6 8 6 7
60 50
10 50
5 7 6 8
50

20 30 10 50 50
 4 6 8 8
40 20
20 20
6 8 6 7
60 50
10 50
5 7 6 8
50
50

20 30 10 50 50

So, Cost of Transportation = 20*4 + 20*6 + 10*8 + 50*6 + 50*8 = 980

 Minimum cost method
4 6 8 8
40 20
20
6 8 6 7
60

5 7 6 8
50

20 30 50 50
4 6 8 8
40 20
20
6 8 6 7
60 10
50
5 7 6 8
50

20 30 50 50
4 6 8 8
40 20
20 20
6 8 6 7
60 10
50
5 7 6 8
50

20 30 10 50 50
4 6 8 8
40 20
20 20
6 8 6 7
60 10
50
5 7 6 8
50 40
10

20 30 10 50 50
4 6 8 8
40 20
20 20
6 8 6 7
60 10
50 10
5 7 6 8
50 40
10

20 30 10 50 50 40
4 6 8 8
40 20
20 20
6 8 6 7
60 10
50 10
5 7 6 8
50 40
10 40

20 30 10 50 50 40

So, Cost of Transportation = 20*4 + 20*6 + 50*6 + 10*7 + 10*7 + 40*8 = 960
 Penalty cost (Vogel’s Approximation)
4 6 8 8
40

6 8 6 7
60

5 7 6 8
50

20 30 50 50
 4 6 8 8
40
Penalty: 2

6 8 6 7
60
Penalty: 0

5 7 6 8
50
Penalty: 1

20 30 50 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1

Select maximum penalty and allocate at minimum cost for demand/supply

4 6 8 8
40 20
20 Penalty: 2

6 8 6 7
60
Penalty: 1

5 7 6 8
50
Penalty: 1

20 30 50 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1
4 6 8 8
40 20
20 20 Penalty: 2

6 8 6 7
60
Penalty: 1

5 7 6 8
50
Penalty: 1

20 30 10 50 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1
4 6 8 8
40 20
20 20 Penalty: 2

6 8 6 7
60
Penalty: 1

5 7 6 8
50 40
10 Penalty: 2

20 30 10 50 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1
4 6 8 8
40 20
20 20 Penalty: 2

6 8 6 7
60
Penalty: 1

5 7 6 8
50 40
10 40 Penalty: 1 2

20 30 10 50 10 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1
4 6 8 8
40 20
20 20 Penalty: 2

6 8 6 7
60 50
10 Penalty: 1

5 7 6 8
50 40
10 40 Penalty: 1 2

20 30 10 50 10 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1
4 6 8 8
40 20
20 20 Penalty: 2

6 8 6 7
60 50
10 50 Penalty: 1

5 7 6 8
50 40
10 40 Penalty: 1 2

20 30 10 50 10 50
Penalty: 1 Penalty: 1 Penalty: 0 Penalty: 1

So, cost of transportation = 20*4 + 20*6 + 10*7 + 40*6 + 10*6 + 50*7 = 920
 Basic feasible solution conditions in a
transportation problem

• The row and column (supply and demand)

constraints are satisfied.
• The non negativity constraints are satisfied.
• The allocations are independent and do not form
a loop.
• There are exactly m+n-1 allocations.
 Loop Formation

4 6 8 8
40
10 30

6 8 6 7
60
50 10

5 7 6 8
50
10 30 10

20 30 50 50
4 6 8 8
40
10 30

6 8 6 7
60
50 10

5 7 6 8
50
10 30 10

20 30 50 50
 4 6 8 8
10 (-1) 30 (+1) 40
=9 = 31
6 8 6 7
60
50 10

5 7 6 8
10 (+1) 10 (-1) 50
30
= 11 =9

20 30 50 50

Change in the cost = - 4 + 8 - 8 + 5 = 1

i.e. cost of transportation has increased. Such condition is not desirable.
 4 6 8 8
10 (+1) 30 (-1) 40
= 11 = 29
6 8 6 7
60
50 10

5 7 6 8
10 (-1) 10 (+1) 50
30
=9 =11

20 30 50 50
Change in the cost = + 4 - 8 + 8 - 5 = - 1
i.e. cost of transportation has decreased. Such condition is desirable.
4 6 8 8
10 (+10) 30 (-10) 40
= 20 = 20
6 8 6 7
60
50 10

5 7 6 8
10 (-10) 10 (+10) 50
30
=0 =20

20 30 50 50
4 6 8 8
40
20 20

6 8 6 7
60
50 10

5 7 6 8
50
30 20

20 30 50 50
 Degenerate Basic Feasible Solution (loop)

4 6 8 8
40
10 30

6 8 6 7
60
10 30 20

5 7 6 8
50
50

20 30 50 50
Degenerate Basic Feasible Solution (allocation≠m+n-1)

4 6 8 8
40
20 20

6 8 6 7
60
30 30

5 7 6 8
50
50

20 30 50 50
 Unbalanced Transportation Problem
4 6 8 8
30

6 8 6 7
60

5 7 6 8
50

20 30 50 50 140/150
4 6 8 8
40

6 8 6 7
60

5 7 6 8
50

0 0 0 0
10

20 30 50 50 150
 MODI Method (U-V Method)

v1= v2= v3= v4=

4 6 8 8
u1= 40
20 20
6 8 6 7
u2= 60
50 10
5 7 6 8
u3= 50
10 40
20 30 50 50 150
 v1= v2= v3= v4=
4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 60
50 10
5 7 6 8
u3= 50
10 40
20 30 50 50 150

The value of u and v is obtained from formula Cij = ui + vj

For consistency, we put u = 0 in the initial step
 v1= 4 v2= 6 v3= v4=
4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 60
50 10
5 7 6 8
u3= 50
10 40
20 30 50 50 150

Cij = ui + v j
C11 = u1 + v1  4 = 0 + v1  v1 = 4
C12 = u1 + v2  6 = 0 + v2  v2 = 6
 v1= 4 v2= 6 v3= v4= 7
4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 60
50 10
5 7 6 8
u3=1 50
10 40
20 30 50 50 150

C32 = u3 + v2  7 = u3 + 6  u3 = 1
C34 = u3 + v4  8 = 1 + v4  v4 = 7
 v1= 4 v2= 6 v3= 6 v4= 7
4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 0 60
50 10
5 7 6 8
u3= 1 50
10 40
20 30 50 50 150

C24 = u2 + v4  7 = u2 + 7  u2 = 0
C23 = u2 + v3  6 = 0 + v3  v3 = 6
 v1= 4 v2= 6 v3= 6 v4= 7
4 6 8 8
u1= 0 40
20 20 (2) (1)
6 8 6 7
u2= 0 60
50 10
5 7 6 8
u3= 1 50
10 40
20 30 50 50 150

For unallocated blocks, we have to obtain : Cij − ( ui + v j )

C13 − ( u1 + v3 ) = 8 − ( 0 + 6 ) = 8 − 6 = 2
C14 − ( u1 + v4 ) = 8 − ( 0 + 7 ) = 8 − 7 = 1
 v1= 4 v2= 6 v3= 6 v4= 7
4 6 8 8
u1= 0 40
20 20 (2) (1)
6 8 6 7
u2= 0 60
(2) (2) 50 10
5 7 6 8
u3= 1 50
(0) 10 (-1) 40
20 30 50 50 150

Here, we should have all values of Cij − ( ui + v j )

Therefore, for − ve value of Cij − ( ui + v j ) , let allocation be 
 v1= 4 v2= 6 v3= 6 v4= 7

4 6 8 8
u1= 0 40
20 20 (2) (1)
6 8 6 7
u2= 0 60
(2) (2) 50 10
5 7 6 θ 8
u3= 1 50
(0) 10 (-1) 40

20 30 50 50 150
 v1= 4 v2= 6 v3= 6 v4= 7

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 0 60
50-θ 10+θ
5 7 6 8
u3= 1 50
10 +θ 40-θ

20 30 50 50 150

Let θ = 40
4 6 8 8
40
20 20
6 8 6 7
60
10 50
5 7 6 8
50
10 40

20 30 50 50 150

Putting θ = 40
 v1= 4 v2= 6 v3= 5 v4= 6

4 6 8 8
u1= 0 40
20 20 (3) (2)
6 8 6 7
u2= 1 60
(1) (1) 10 50
5 7 6 8
u3= 1 50
(0) 10 40 (1)

20 30 50 50 150

Cost of transportation = 920

Here we have obtained optimal result, as all values are +ve, but due to zero
value at one allocation, it is a possibility to obtain better solution.
Considering new allocation as  at zero value of Cij − ( ui + v j )

v1= 4 v2= 6 v3= 5 v4= 6

4 6 8 8
u1= 0 40
20 20 (3) (2)
6 8 6 7
u2= 1 60
(1) (1) 10 50
5 +θ 7 6 8
u3= 1 50
(0) 10 40 (1)

20 30 50 50 150
Considering new allocation as  at zero value of Cij − ( ui + v j )

4 6 8 8
40
20 - θ 20 + θ
6 8 6 7
60
10 50
5 7 6 8
50
+θ 10 - θ 40

20 30 50 50 150
 Putting θ = 10, we have a new optimal solution as:

4 6 8 8
40
10 30
6 8 6 7
60
10 50
5 7 6 8
50
10 40

20 30 50 50 150
Cost of transportation = 920
Degenerate Basic Feasible Solution (allocation≠m+n-1)

4 6 8 8
40
20 20

6 8 6 7
60
10 50

5 7 6 8
50
50

20 30 50 50

Cost of transportation = 980

 v1= 4 v2= 6 v3= 4 v4= ??

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 2 60
10 50
5 7 6 8
u3= ?? 50
50

20 30 50 50 150

Here we are not able to obtain the value of u3 and v4.

 Let us consider Є, so as to obtain the value of u3 and v4

v1= 4 v2= 6 v3= 4 v4= 6

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 2 60
10 50
5 7 6 8
u3= 2 50
Є 50

20 30 50 50 150
 Now compute Cij-(ui+vj) for unallocated blocks

v1= 4 v2= 6 v3= 4 v4= 6

4 6 8 8
u1= 0 40
20 20 (4) (2)
6 8 6 7
u2= 2 60
(0) 10 50 (-1)
5 7 6 8
u3= 2 50
(-1) (-1) Є 50

20 30 50 50 150
 Now considering θ at one of –ve values, we have

v1= 4 v2= 6 v3= 4 v4= 6

4 6 8 8
u1= 0 40
20 20 (4) (2)
6 8 6 7
u2= 2 60
(0) 10 50 (-1)
5 7 θ 6 8
u3= 2 50
(-1) (-1) Є 50

20 30 50 50 150
 Now considering θ at one of –ve values, we have

v1= 4 v2= 6 v3= 4 v4= 6

4 6 8 8
u1= 0 40
20 20 (4) (2)
6 8 6 7
u2= 2 60
(0) 10-θ 50+θ (-1)
5 7 +θ 6 8
u3= 2 50
(-1) (-1) Є-θ 50

20 30 50 50 150
 Now considering θ = Є, we have

4 6 8 8
40
20 20
6 8 6 7
60
10 50
5 7 6 8
50
Є 50

20 30 50 50 150
 Now considering θ = Є, we have

v1= 4 v2= 6 v3= 4 v4= 7

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 2 60
10 50
5 7 6 8
u3= 1 50
Є 50

20 30 50 50 150
 v1= 4 v2= 6 v3= 4 v4= 7

4 6 8 8
u1= 0 40
20 20 (4) (1)
6 8 6 7
u2= 2 60
(0) 10 50 (-2)
5 7 6 8
u3= 1 50
(0) Є (1) 50

20 30 50 50 150
 v1= 4 v2= 6 v3= 4 v4= 7

4 6 8 8
u1= 0 40
20 20 (4) (1)
6 8 6 7 θ
u2= 2 60
(0) 10 50 (-2)
5 7 6 8
u3= 1 50
(0) Є (1) 50

20 30 50 50 150
 v1= 4 v2= 6 v3= 4 v4= 7

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 2 60
10-θ 50 +θ
5 7 6 8
u3= 1 50
Є+θ 50-θ

20 30 50 50 150
 Now considering θ = 10, we have

4 6 8 8
40
20 20
6 8 6 7
60
50 10
5 7 6 8
50
10 40

20 30 50 50 150
 v1= 4 v2= 6 v3= 6 v4= 7

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 0 60
50 10
5 7 6 8
u3= 1 50
10 40

20 30 50 50 150
 v1= 4 v2= 6 v3= 6 v4= 7

4 6 8 8
u1= 0 40
20 20 (2) (1)
6 8 6 7
u2= 0 60
(2) (1) 50 10
5 7 6 8
u3= 1 50
(0) 10 (-1) 40

20 30 50 50 150
 v1= 4 v2= 6 v3= 6 v4= 7

4 6 8 8
u1= 0 40
20 20 (2) (1)
6 8 6 7
u2= 0 60
(2) (1) 50 10
5 7 6 θ 8
u3= 1 50
(0) 10 (-1) 40

20 30 50 50 150
 v1= 4 v2= 6 v3= 6 v4= 7

4 6 8 8
u1= 0 40
20 20
6 8 6 7
u2= 0 60
50-θ 10+θ
5 7 6 8
u3= 1 50
10 +θ 40-θ

20 30 50 50 150
4 6 8 8
40
20 20
6 8 6 7
60
10 50
5 7 6 8
50
10 40

20 30 50 50 150
 v1= 4 v2= 6 v3= 5 v4= 6

4 6 8 8
u1= 0 40
20 20 (3) (2)
6 8 6 7
u2= 1 60
(1) (1) 10 50
5 7 6 8
u3= 1 50
(0) 10 40 (1)

20 30 50 50 150

Cost of transportation = 920

 v1= 4 v2= 6 v3= 5 v4= 6

4 6 8 8
u1= 0 40
20 20 (3) (2)
6 8 6 7
u2= 1 60
(1) (1) 10 50
5 θ 7 6 8
u3= 1 50
(0) 10 40 (1)

20 30 50 50 150
4 6 8 8
40
20-θ 20+θ
6 8 6 7
60
10 50
5 7 6 8
50
+θ 10-θ 40

20 30 50 50 150
4 6 8 8
40
10 30
6 8 6 7
60
10 50
5 7 6 8
50
10 40

20 30 50 50 150

Cost of transportation = 920

 Duel in Transportation
Primal is
Minimize Cij X ij
For three supply points
X 11 + X 12 + X 13 + X 14 = 40 u1
X 21 + X 22 + X 23 + X 24 = 60 u2
X 31 + X 32 + X 33 + X 34 = 50 u3
For four demand points
X 11 + X 21 + X 31 = 20 v1
X 12 + X 22 + X 32 = 30 v2
X 13 + X 23 + X 33 = 50 v3
X 14 + X 24 + X 34 = 50 v4
X ij  0
Duel is
Maximize ai ui +  b j v j

ui + v j  Cij
Where, ui, vj are unrestricted.