24-Mar-25

Transportation Problems
(VAM, NWCM & LCM)
Department of Mathematical Sciences

Outcomes
1. Define transportation problem
2. Classify solutions to TPs
Linear Programming (LP)

3. Determine initial basic feasible solutions using VAM, NWCM & LCM
4. (Test optimality using MODI Method – Subject to time)

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Transportation LPPs
Dfn:
A transportation problem is an LPP in which goods are delivered
from a source to a destination based on supply and demand of the
Linear Programming (LP)

sources and destinations respectively, with the aim of minimizing

transportation cost or maximizing transportation profit.
Balanced TP:
The problem is considered to be a balanced TP when supply =
demand.
Unbalanced TP:
Problem in which supply and demand are not equal.
To balance it, a dummy row or a dummy column is added

Forms of Solutions to TPs

Feasible Solution:
A set of non-negative allocations/assignments that satisfies the
supply-demand restrictions (rim restrictions/conditions).
Linear Programming (LP)

Basic Feasible Solution:

Is a feasible solution
Contains  m  n  1 non-negative allocations/assignments

Non-Degenerate Basic Feasible Solution:

Is a basic feasible solution
Has exactly m  n  1 non-negative allocations/assignments.

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Solutions to TPs cont…

Degenerate Basic Feasible Solution:
Basic feasible solution
Linear Programming (LP)

Has less than m  n  1 non-negative allocations/assignments.

Can not be tested for optimality

Optimal Feasible Solution:

Is a feasible solution that minimizes the transportation cost or
maximizes the transportation profit

Methods for Solving TPs

We will consider three ways for determining the initial basic feasible
solutions:
Vogel’s Approximation Method (VAM).
Linear Programming (LP)

North West Corner Method (NWCM)

Least Cost Method (LCM)
Use Modified Distribution (MODI) method to test for optimality of the
IBFS

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Vogel’s Approximation Method

One of the methods used to calculate the initial basic feasible
solutions (IBFS) to transportation problems.
Linear Programming (LP)

VAM applies an iterative procedure based on penalties incurred

for not using the cheapest available cost.

Dfn – Penalty:
A penalty is the absolute difference between the two lowest
costs in each row and column of the given cost matrix.

VAM Procedure
1. Step 1: Calculate the penalties for each row and column
2. Step 2: Identify the row or column with the maximum penalty
Linear Programming (LP)

and assign the corresponding cell’s supply or demand

whichever is minimum (of the two)
3. Step 3: If the assignment in Step 2 satisfies the supply at the
origin, delete the corresponding row. If it satisfies the demand at
that destination, delete the corresponding column.
4. Step 4: Repeat the iteration (Steps 1 -3) until the supply at each
origin is reduced to 0 (i.e., every supply is exhausted) and
demand at each destination is reduced to 0 (i.e., every demand
is satisfied).

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Equal/Tied Penalties
1. If two or more columns or rows have the same maximum penalty,
choose one with the least cost.
Linear Programming (LP)

2. If two or more columns or rows have the same maximum

penalty and same least cost, choose one with maximum
allocation i.e. max supply or max demand
3. If two or more columns or rows have the same maximum
penalty, same least cost, and same maximum allocation,
choose one randomly or of your convenience.

Example
The table below shows the cost (K’000) of transporting a unit of items
from each plant to the respective shops within Lilongwe. Solve the
Linear Programming (LP)

transportation problem using Vogel’s approximation method.

Shop
Plant Bwalo la Njovu City Centre Kawale Area 25 Supply
Kanengo 7 3 6 2 50
Njewa 3 5 7 4 60
Biwi 2 5 4 8 25
Demand 60 40 20 15

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Solution Max penalty is 2, &

 Let the shops be B, C, K, & A appears four times

 For the given cost matrix, Supply = Demand = 135 Select the 2 with
The problem is a balanced transportation problem the least cost and
Linear Programming (LP)

max allocation
Iteration 1
Step 1: B C K A Supply
Calculate
penalties,
Kanengo 7 3 6 2 50 1
Step 2:
Njewa 3 5 7 4 60 1
Maximum Biwi 25 2 5 4 8 0 25 2
penalty & assign
minimum value Demand 3560 40 20 15 135
Allocation of 25
on the cheapest
cost 1 2 2 2 Allocation of 15
Step 3: Delete row or column Step 4: Reduce demand/supply to zero

Solution cont…
Step 1:
Calculate Iteration 2
penalties
Linear Programming (LP)

B C K A Supply
Step 2:
Maximum penalty Kanengo 7 3 6 2 50 1
& assign minimum Njewa 35 3 5 7 4 25 60 1
value on the
cheapest cost Biwi 25 2 5 4 8 0 25 _
Step 3: Delete Demand 0 3560 40 20 15 135
row or column
4 2 1 2
Step 4: Reduce
demand/supply
to zero

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Max penalty is 2, &

Solution cont… appears two times

Step 1: Select the 2 with

Calculate Iteration 3 the least cost
penalties
Linear Programming (LP)

B C K A Supply
Step 2:
Maximum penalty Kanengo 7 3 6 15 2 35 50 1
& assign minimum Njewa 35 3 5 7 4 25 60 1
value on the
cheapest cost Biwi 25 2 5 4 8 0 25 _
Step 3: Delete Demand 0 3560 40 20 0 15
row or column

Step 4: Reduce
_ 2 1 2
demand/supply
to zero

Solution cont…
Step 1:
Calculate Iteration 4
penalties
Linear Programming (LP)

B C K A Supply
Step 2:
Maximum penalty Kanengo 7 35 3 6 15 2 0 35 50 3
& assign minimum Njewa 35 3 5 7 4 25 60 2
value on the
cheapest cost Biwi 25 2 5 4 8 0 25 _
Step 3: Delete Demand 0 3560 5 40 20 0 15
row or column

Step 4: Reduce _ 2 1 _
demand/supply
to zero

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Solution cont…
Step 1: Iteration 5
Assign minimum
Linear Programming (LP)

value on the B C K A Supply

6 15 2 0 35 50
cheapest cost
Kanengo 7 35 3
Step 2: Reduce 35 3 5 5 20 7 0
demand/supply Njewa 4 20 25 60
to zero Biwi 25 2 5 4 8 0 25
Step 3: Assign the Demand 0 3560 0 5 40 0 20 0 15
remaining value to
the remaining cost

Step 4: Reduce
demand/supply to zero

Solution cont…
Allotment table (Number of units from each plant to respective shops):

Bwalo la Njovu City Centre Kawale Area 25

Linear Programming (LP)

Kanengo - 35 @K3 - 15 @K2

Njewa 35 @K3 5 @K5 20 @K7 -

Biwi 25 @K2 - - -

 35  3  15  2  35  3  5  5  20  7  25  2
IBFS: TC
 455
Total cos t is K 455, 000

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Example
Determine the IBFS to the following transportation problem using VAM.
Linear Programming (LP)

Destination
Source D1 D2 D3 Supply
A 5 1 7 10
B 6 4 6 80
C 3 2 5 50
Demand 75 20 50

Solution Source D1 D2 D3 Supply

 Supply ≠ Demand A 5 1 7 10
LPP not balanced →Balance it B 6 4 6 80
C 3 2 5 50
Linear Programming (LP)

140
Balanced LPP Demand 75 20 50 145

Source D1 D2 D3 Supply Since the total of

A 5 1 7 10 the rows is smaller,
add a dummy row
B 6 4 6 80 to make up for the
difference
C 3 2 5 50
Dummy 0 0 0 5
Demand 75 20 50 145

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Solution cont…
Iterations
Source D1 D2 D3 Supply
5 10 1 0 10
Linear Programming (LP)

A 7 4 4
B 6 4 6 80 2 2
C 3 2 5 50 1 1
Dummy 0 05 0 05 0 -
Demand 75 1020 4550
3 1 5
Activity
2 1 1
Complete the example
as a class activity…
IBFS: TC = 10 × 1 + 25 × 6 + 10 × 4 + 45 × 6 + 50 × 3 + 5 × 0 = 620

Activity: Transport Problem

The table below shows the cost (in K) per unit for
transporting goods from each warehouse to each
distribution center. The supply and demand data of
Linear Programming (LP)

each warehouse and distribution center are given.

Use VAM to determine the number of units to be
delivered from each warehouse.
Warehouse Distribution Centre Supply
Blantyre G/Corner Limbe
Chilimba 9 10 11 350
Makata 6 4 8 250
Demand 150 100 150
IBFS: TC = 150 × 11 + 200 × 0 + 150 × 6 + 100 × 4 = 2,950

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Maximization in Transportation Problems

The objective is to maximize total profit given a profit matrix
Linear Programming (LP)

Convert the maximization [profit] problem into an equivalent

minimization [cost] problem by subtracting all the cell entries
from the highest profit entry – Opportunity cost

Solve the minimization problem using VAM

Use the allocations/allotments from the VAM to find the profit

maximization IBFS

Example – Transportation Profits

The table below shows the profits (K’00) to be realised by a Kabaza
operator after delivering passengers to different locations in Blantyre.
Linear Programming (LP)

Determine the IBFS to the TP using VAM.

Drop-off Location
Pick-up Point MUBAS Ndirande Zingwangwa Passengers
Wenela 4 4 9 25
Queens 3 5 8 20
Passengers 18 16 11

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Solution
Drop-off Location (Profit)
Pick-up Point MUBAS Ndirande Zingwangwa Passengers
Wenela 4 4 9 25
Linear Programming (LP)

Queens 3 5 8 20
Passengers 18 16 11

Convert to minimization TP: Subtract each profit value from 9

Drop-off Location (Cost)
Pick-up Point MUBAS Ndirande Zingwangwa Total
Wenela 5 5 0 25
Queens 6 4 1 20
Total 18 16 11 45

Solution cont…
Iterations
Activity: Complete the example as a class activity…
Linear Programming (LP)

Drop-off Location - Cost

Pick-up Point MUBAS Ndirande Zingwangwa Total
Wenela 14 5 5 11 0 25
Queens 4 6 16 4 1 20
Total 18 16 11

IBFS: Total Profit = 14 × 4 + 11 × 9 + 4 × 3 + 16 × 5 = 247

Total Profit = K24,700

Profits not costs

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Activity
Determine whether the IBFS given below is non-degenerate or
degenerate.
Linear Programming (LP)

Warehouse & Cost (K’000)

Factory D1 D2 D3 D4 Capacity
F1 19 30 50 7 12 7
F2 3 70 30 7 40 60 10
F3 2 40 8 10 60 8 20 18
Capacity 5 8 7 15

IBFS: TC  12  7  70  3  40  7  40  2  10  8  20  8
 K 894,000

Activity
Use VAM to determine the IBFS to the TP whose profit matrix is below.
Linear Programming (LP)

Destinations
Sources D1 D2 D3 D4 Supply
S1 15 51 42 33 23
S2 80 42 26 81 44
S3 90 40 66 60 33
Demand 23 31 16 30

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North West Corner Method

Another method used to find the initial basic feasible solution
(IBFS) to a transportation problem
Linear Programming (LP)

NWCM applies an iterative procedure based on the actual cost

situated in the upper-left (i.e. Nort West) corner cell of the table.
N
NW

NWCM Procedure
Step 1: Balance the LPP:  Supply   Demand
Step 2: Select the upper-left corner cell, i.e., the north-west corner cell of
the transportation matrix and assign the minimum value of supply or
Linear Programming (LP)

demand (i.e. min(supply, demand))

Step 3: Separately subtract the above minimum value from total supply
and demand of the corresponding row and column.
If the supply is = 0, strike off that row and move down to the next cell.
If the demand is = 0, strike off that column and move right to the next cell.
If supply and demand is = 0, strike off both the row and column and move
diagonally to the next cell.

Step 3: Repeat these steps until all the supply and demand values are 0s.

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Example – Transportation Cost

TNM has three branches located in Mzuzu, Lilongwe and Blantyre. The
company has to transport fuels to cell towers in three destinations
namely, Kamphata, Jenda and Lizulu. The availability (litres) from
Linear Programming (LP)

Mzuzu, Lilongwe and Blantyre is 400, 600 and 700 respectively. The
demand at Kamphata, Jenda and Lizulu is 700, 400 and 600
respectively. The transportation cost is shown in the matrix below. Use
the North-West corner method to find the IBFS.
Cost (K’000) to Tower Site
Branch Kamphata Jenda Lizulu
Mzuzu 4 1 5
Lilongwe 3 4 3
Blantyre 2 8 6

Solution
 Include supply and demand values in the table
 LPP is balanced; Supply = Demand = 1,700
Step 1:
Linear Programming (LP)

Pick top-left cell

Step 2:
Assign to it either Kamphata Jenda Lizulu Supply
demand or supply 400
whichever is smaller. Mzuzu 4 1 5 400 0

Step 3:
Lilongwe 3 4 3 600
Reduce the supply Blantyre 2 8 6 700
and demand by the
value assigned to Demand 700 400 600 1,700
the top-left cell
Step 4:
300 Step 4:
Strike off row 1 whose supply has reduced to 0 Repeat Steps 1 - 4

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Solution cont…
Step 1:
Pick top-left cell
Step 2: Kamphata Jenda Lizulu Supply
Linear Programming (LP)

Assign to it either
demand or supply Mzuzu 400 4 1 5 400 0
whichever is smaller.
Lilongwe 300 3 4 3 600 300
Step 3:
Reduce the supply Blantyre 2 8 6 700
and demand by the Demand 700 400 600 1,700
value assigned to
the top-left cell 300
Step 4: 0 Step 4:
Strike off column 1 whose demand has reduced to 0 Repeat Steps 1 - 4

Solution cont…
Step 1:
Pick top-left cell
Step 2: Kamphata Jenda Lizulu Supply
Linear Programming (LP)

Assign to it either
demand or supply Mzuzu 400 4 1 5 400 0
whichever is smaller.
Lilongwe 300 3 300 4 3 600 300 0
Step 3:
Reduce the supply Blantyre 2 8 6 700
and demand by the Demand 700 400 600 1,700
value assigned to
the top-left cell 300 100
0
Step 4: Step 4:
Strike off row 2 whose demand has reduced to 0 Repeat Steps 1 - 4

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Solution cont…
Step 1:
Pick top-left cell
Step 2: Kamphata Jenda Lizulu Supply
Linear Programming (LP)

Assign to it either
demand or supply Mzuzu 400 4 1 5 400 0
whichever is smaller.
Lilongwe 300 3 300 4 3 600 300 0
Step 3:
Reduce the supply Blantyre 2 100 8 600 6 700 600 0
and demand by the Demand 700 400 600 1,700
value assigned to
the top-left cell 300 100 0
0 0
Step 4: Step 4:
Strike off column 2 whose demand has reduced to 0 Assign the remaining
value to the remaining cell

Solution cont…
Allotment/Allocation table:

Kamphata Jenda Lizulu Supply

Linear Programming (LP)

Mzuzu 400 4 1 5 400

Lilongwe 300 3 300 4 3 600
Blantyre 2 100 8 600 6 700
Demand 700 400 600

IBFS: TC  400  4  300  3  300  4  100  8  600  6

 8,100
Total cost is K8,100,000

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Activity
Determine the IBFS to the TP whose cost matrix is given below. Use the
NWCM.
Linear Programming (LP)

Destinations
Sources X Y Z Supply
A 5 1 7 20
B 7 4 6 70
C 3 2 5 25
Demand 65 30 50

TC  20  5  45  7  25  4  5  2  20  5  30  0  625

Least Cost [Entry] Method Procedure

Step 1: Balance the LPP:  Supply   Demand
Step 2: Select the lowest cost from the entire matrix and allocate the
Linear Programming (LP)

min(supply, demand)
Step 3: Separately subtract the above minimum value from total supply
and demand of the corresponding row and column.
Strike off any row or column whose supply or demand has been fulfilled i.e.
sum is 0
Step 3: Repeat these steps until all the supply and demand values are 0s.

NB: For a TP that is balanced by adding a dummy row or column, ignore

the 0s (costs) until all the non-zeros cost values are assigned or struck off.

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Example
Use LCM to determine the IBFS to the TP whose cost (K’000) matrix is
Linear Programming (LP)

Destinations
Sources D1 D2 D3 D4 Supply
S1 15 51 42 33 23
S2 80 42 26 81 44
S3 90 40 66 60 33
Demand 23 31 16 30

Solution
 LPP is balanced: Supply = Demand = 100

Step 1: D1 D2 D3 D4 Supply
Linear Programming (LP)

Pick the smallest cost 23 15

S1 51 42 33 23 0
Step 2:
Assign to it either S2 80 42 26 81 44
demand or supply S3 90 40 66 60 33
whichever is smaller.
Demand 23 31 16 30 100
Step 3:
Reduce the supply 0
and demand by the
value assigned to
the top-left cell Step 4: Step 4:
Strike off both column 1 & row 1 - values Repeat Steps 1 - 4
have reduced to 0

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Solution cont…
Step 1:
Pick the smallest cost
D1 D2 D3 D4 Supply
Linear Programming (LP)

Step 2:
Assign to it either S1 23 15 51 42 33 23 0
demand or supply
whichever is smaller. S2 80 42 16 26 81 44 28
S3 90 40 66 60 33
Step 3:
Reduce the supply Demand 23 31 16 30 100
and demand by the
value assigned to 0 0
the top-left cell
Step 4: Step 4:
Strike off column 3 - value has Repeat Steps 1 - 4
reduced to 0

Solution cont…
Step 1:
Pick the smallest cost
D1 D2 D3 D4 Supply
Linear Programming (LP)

Step 2:
Assign to it either S1 23 15 51 42 33 23 0
demand or supply
whichever is smaller. S2 80 42 16 26 81 44 28
S3 90 31 40 66 60 33 2
Step 3:
Reduce the supply Demand 23 31 16 30 100
and demand by the
value assigned to 0 0 0
the top-left cell
Step 4: Step 4:
Strike off column 2 - value has Repeat Steps 1 - 4
reduced to 0

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Solution cont…
Step 1:
Pick the smallest cost
D1 D2 D3 D4 Supply
Linear Programming (LP)

Step 2:
Assign to it either S1 23 15 51 42 33 23 0
demand or supply
whichever is smaller. S2 80 42 16 26 28 81 44 28
S3 90 31 40 66 2 60 33 2
Step 3:
Reduce the supply Demand 23 31 16 30 100 0
and demand by the
value assigned to 0 0 0 28
the top-left cell 0
Step 4: Step 4:
Strike off row 3 - value has Assign the remaining
reduced to 0 value to the remaining cell

Solution cont…
Allotment/Allocation table:
Destinations
Sources D4 Supply
Linear Programming (LP)

D1 D2 D3
S1 23 15 51 42 33 23
S2 80 42 16 26 28 81 44
S3 90 31 40 66 2 60 33
Demand 23 31 16 30
IBFS: TC  23 15  16  26  28  81  31 40  2  60
 4,389
Total cost is K4,389,000

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Activity
Determine the IBFS to the TP whose cost matrix is given below. Use the
LCM.
Linear Programming (LP)

Destinations
Sources X Y Z Supply
A 5 1 7 20
B 7 4 6 70
C 3 2 5 25
Demand 65 30 50

TC  20  1  20  7  50  6  15  3  10  2  30  0  525

Activity
Determine the maximum IBFS to the TP whose revenue matrix is given
below. Use the NWCM and LCM.
Linear Programming (LP)

Destinations
Sources D1 D2 D3 D4 Supply
S1 19 30 50 10 7
S2 70 30 40 60 9
S3 40 8 70 20 18
Demand 5 8 7 14
TC  5  19  2  30  6  30  3  40  3  70  14  20  1, 015
TC  7  30  5  70  4  60  1 8  7  70  10  20  1, 498

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Q&A

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