CHAPTER 6:

TRANSPORTATION AND ASSIGNMENT PROBLEM

TRANSPORTATION
Introduction:
The transportation problem, deals with the distribution of
goods from several points of supply (sources) to a
number of demand (destinations).
Usually, we have a given capacity of goods at each
source and a given requirement for the goods at each
destination.
The objective of the transportation problem is to
schedule shipments from sources to destinations so that
the total transportation cost is minimized.

 Example:
Given is a transportation problem with the following cost,
supply and demand.
FROM
FACTORIES
1
2
3
DEMAND

TO WAREHOUSES
A
B
C
6
8
10
7
11
11
4
5
12
200
100
300

SUPPLY
150
175
275
600

Example of the above transportation problem in a network

format:
FACTORIES
(Sources)

WAREHOUSES
(Destinations)

150

200

175

100

275

300

Capacities
Requirements

General form of an LP model for a transportation problem:

Decision variables:
Xij = # of goods to be transported from source i to
destination j
Objective function:
Min Z = Cij Xij
Constraints:

Xij = Si
Xij = Dj

a) Construct an LP model for the transportation problem.

b) Find the initial solution using Northwest Corner

Method.
From
A

To
B

Supply
C

1
2
3
Demand

c) Find the initial solution using Minimum Cell Cost

Method.
From
A

To
B

Supply
C

1
2
3
Demand

d) Find the initial solution using VAM Method.

6 STEPS OF VAM (TO DETERMINE AN INITIAL VAM
SOLUTION)
1.

For each row and column of the transportation table,

find the difference between the two lowest unit
shipping costs. These numbers represent the difference
between the distribution cost on the best route in the
row or column and the second best route in the row or
column. (This is the opportunity cost of not using the
best route.)

2.

Identify the row or column with the greatest

opportunity cost, or difference.

3.

Assign as many units as possible to the lowest-cost

cell in the row or column selected.

4.

Eliminate any row or column that has just been

completely satisfied by the assignment just made. This
can be done by placing Xs in each appropriate cell.

5.

Recompute the cost differences for the transportation

table, omitting rows or columns eliminated in the
preceding step.
6.

Return to step 2 for rows and columns remaining

and repeat the steps until an initial feasible solution
has been obtained.

From
A

To
B

Supply
C

1
2
3
Demand

e) Using the initial solution in part (b), solve the

transportation problem using Stepping Stone Solution
Method.
5 STEPS TO TEST UNUSED CELLS WITH THE
STEPPING-STONE METHOD:
1.

Select an unused cell to be evaluated.

2.

Beginning at this cell, trace a closed path back to the

original cell via cells that are currently being used and
moving with only horizontal and vertical moves.

3.

Beginning with a plus (+) sign at the unused cell,

place alternate minus (-) signs and plus (+) signs in
each corner cell of the closed path just traced.

4.

Calculate an improvement index by adding together

the unit cost figures found on each cell containing a
plus(+) sign and then subtracting the unit cost in each
cell containing a minus (-) sign.

5.

Repeat steps 1 to 4 until an improvement index has

been calculated for all unused cells. If all indices
computed are greater than or equal to ( ) 0, an optimal
solution has been reached. If not, it is possible to
improve the current solution and decrease total
shipping costs.

From

To
B
8

A
6

25
2

Supply
C
10

150

11

175

12

275

125
11
175

4
200

Demand

5
75

200

100

300

Total cost: RM4550

To determine whether a transportation route not
presently being used (an empty cell) would result in a
lower total cost if it were used.
In this example the empty cells are 1A, 2A, 2B and 3C.
So, evaluate these empty cells to see whether the use of
any of them would reduce total cost.
To evaluate the cost reduction potential of an empty cell,
a closed path of each empty cell is identified.

10

1A
From

To
B
8

A
6

25
2

Supply
C
10

150

11

175

12

275

125
11
175

4
200

Demand

5
75

200

100

A
6

To
B
8

300

2A
From
1

25
2

Supply
C
10

150

11

175

12

275

125
11
175

4
200

Demand

5
75

200

100

300

11

2B
From

To
B
8

A
6

25
2

Supply
C
10

150

11

175

12

275

125
11
175

4
200

Demand

5
75

200

100

A
6

To
B
8

300

3C
From
1

25
2

Supply
C
10

150

11

175

12

275

125
11
175

4
200

Demand

5
75

200

100

300

12

Second iteration:
From

To
B
8

A
6

1
25
2

Supply
C
10

150

11

175

12

275

125
7

11
175

4
175

Demand

5
100

200

100

300

Total cost: RM4525

1B
From

To
B
8

A
6

1
25
2

Supply
C
10

150

11

175

12

275

125
7

11
175

4
175

Demand

5
100

200

100

300

13

2A
From

To
B
8

A
6

1
25
2

Supply
C
10

150

11

175

12

275

125
7

11
175

4
175

Demand

5
100

200

100

A
6

To
B
8

300

2B
From
1
25
2

Supply
C
10

150

11

175

12

275

125
7

11
175

4
175

Demand

5
100

200

100

300

14

3C
From

To
B
8

A
6

1
25
2

Supply
C
10

150

11

175

12

275

125
7

11
175

4
175

Demand

5
100

200

100

300

Alternative Solution:
From

To
B
8

Supply

A
6

11

11

175

12

275

200

100

Demand

C
10

150

300

15

f) Using the initial solution in part (b), solve the

transportation problem using MODI Method.
MODI is a modified version of the stepping-stone
method in which math equations replace the steppingstone paths.
Steps:
i.

Develop an initial solution using one of the three

methods.

ii.

Compute ui and vj for each row & column by

applying the formula ui + vj = cij to each cell that has
an allocation.

iii. Compute the cost change, kij, for each empty cell
using kij = cij ui vj.
iv.

Allocate as much as possible to the empty cell that

will result in the greatest net decrease in cost
according to the stepping-stone path.

v.

Repeat steps 2 to 4 until all kij values are positive or

zero.

16

From

To
B
8

A
6

25
2

Supply
C
10

150

11

175

12

275

125
11
175

4
200

Demand

5
75

200

100

300

Total cost: RM4550

17

New solution:
From

To
B
8

Supply

A
6

11

11

175

12

275

200

100

Demand

C
10

150

300

18

Alternative solution:
From

To
B
8

Supply

A
6

11

11

175

12

275

200

100

Demand

C
10

150

300

19

SPECIAL CASES:
1. The unbalanced transportation model
a) demand > supply
b) demand < supply
2. Degeneracy
3. Prohibited routes
1. The Unbalanced Transportation Model
a) demand > supply
Given is a transportation problem with the following cost,
supply and demand.
FROM
FACTORIES
1
2
3
DEMAND

TO WAREHOUSES
A
B
C
6
8
10
7
11
11
4
5
12
200
100
350

SUPPLY
150
175
275

Find the initial solutions using Northwest Corner,

Minimum Cell Cost & VAM method.

20

b) demand < supply

FROM
FACTORIES
1
2
3
DEMAND

TO WAREHOUSES
A
B
C
6
8
10
7
11
11
4
5
12
200
100
300

SUPPLY
150
175
375

Find the initial solutions using Northwest Corner,

Minimum Cell Cost & VAM method.

21

2. Degeneracy
In a transportation tableau with m rows and n columns,
there must be m + n 1 cells with allocation; if not, it is
degenerate.
In this case, all the stepping-stone paths or MODI
equations cannot be developed.

Given is a transportation problem with the following cost,

supply and demand.
FROM
FACTORIES
1
2
3
DEMAND

TO WAREHOUSES
A
B
C
6
8
10
7
11
11
4
5
12
200
100
300

SUPPLY
150
250
200

Find the initial solutions using Minimum Cell Cost.

22

3. Prohibited Routes
Sometimes one or more of the routes in the
transportation model are prohibited.
That is, units cannot be transported from a particular
source to a particular destination.
A prohibited route is assigned a large cost such as M so
that it will never receive an allocation.
Thus, when the prohibited cell is evaluated, it will
always contain a large positive cost change of M, which
will keep it from being selected as an entering variable.

23

Example:
A soft drink manufacturer, Sara Soda Sdn.Bhd., has recently begun
negotiations with brokers in the areas where it intends to distribute its
products. Before finalizing the agreements, however, Manager Dave wants
to determine shipping routes and costs. The firm has three plants with
capacities as shown below:
Plant
1
2
3

Capacity (per week)

40000
30000
26000

Estimated demands in each of the warehouse localities are

Warehouse
A
B
C
D
E

Demand (per week)

24000
22000
23000
16000
10000

The estimated per unit shipping costs for the various routes are
From
1
2
3

A
3
2
1

B
5
7
10

To
C
2
2
5

D
8
3
5

E
7
4
6

Route 2 D is unacceptable.
a) Formulate a LP model for this problem.
b) Find the initial solution using VAM method.

24

c) Is this solution optimum? Otherwise get the next tableau and calculate
the total cost. (HINT: Use MODI Method)

ASSIGNMENT PROBLEM
-

A special form of transportation problem where all

supply and demand values equal to 1.

Example:
In a job shop operation, four jobs may be performed on any
of four machines. The hours required for each job on each
machine are presented in the following table. The plant
supervisor would like to assign jobs so that total time is
minimized.
Job
A
B
C
D

Machine
1
10
12
9
14

2
14
13
12
16

3
16
15
12
18

4
13
12
11
16

Solution:
1. Find the opportunity cost table by:
a) Subtracting the smallest number in each row of
the original cost table from every number in
that
row.
Machine
Job
1
2
3
4
A
B
25

C
D
b)

Job

Then subtracting the smallest number in each

column of the table obtained in part (a) from
every number in that column.
Machine
1

A
B
C
D
2.

Test the table resulting from step 1 to see whether an

optimal assignment can be made. The procedure is to
draw the minimum number of vertical and horizontal
straight lines necessary to cover all zeros in the table.
If the number of lines equals either the number of
rows or columns in the table, an optimal assignment
can be made. If the number of lines is less than the
number of rows or columns, we proceed to step 3.

3.

Revise the present opportunity cost table. This is done

by subtracting the smallest number not covered by a
line from every other uncovered number. This same
smallest number is also added to any number(s) lying
at the intersection of horizontal and vertical lines. We
then return to step 2 and continue the cycle until an
optimal assignment is possible.
26

Job

Machine
1

A
B
C
D
Now, the minimum number of lines is equal to the number
of rows/columns. Therefore the table is optimal.
An assignment can be made to the cells which have zero
values.

So, from the optimal table, we should allocate

Job
A
B
C
D

Machine

Hours required

27

A) Unbalance Assignment Problems

-

Occur when number of rows exceeds the number of

columns or number of columns exceeds the number of
rows.
When number of rows exceeds the number of
columns, we simply add a dummy column.
When number of columns exceeds the number of
rows, we simply add a dummy row.
This creates a table of equal dimensions and allows us
to solve the problem as before.
Since the dummy column (task) or row (person) is
really nonexistent, it is reasonable to enter zeros in its
row or column as the cost or time estimate.

Example:
Car
A
B
C
D
E

1
10
6
7
5
9

Distance (km)
2
3
11
18
7
7
8
5
6
4
4
7

4
12
8
4
5
6

28

To balance it, add the dummy column:

Dummy column

Car
A
B
C
D
E

1
10
6
7
5
9

Distance (km)
2
3
4
11
18
12
7
7
8
8
5
4
6
4
5
4
7
6

5
0
0
0
0
0

Distance (km)
3

Distance (km)
3

Solution:
Car
A
B
C
D
E
Car

A
B
C
D
E
29

B) Unacceptable Assignments
-

Using the same approach for the assignment problem

as we did for the transportation problem, we define a
value of M for unacceptable minimization
assignments, where M is an arbitrarily large value.

Example:
A shop has four machinists to be assigned to four machines.
The hourly cost of having each machine operated by each
machinist is as follows:
Machine
Machinist
A
B
C
D
1
$12
11
8
14
2
10
9
10
8
3
14
8
7
11
4
6
8
10
9
However, because he does not have enough experience,
machinist 3 cannot operate machine B. Determine the
optimal assignment and compute total minimum cost.
Solution:
Machinist

Machine
A

1
2
3
30

4
Machinist

Machine
A

1
2
3
4
Machinist

Machine
A

1
2
3
4
Machinist

Machine
A

1
2
3
4
Machinist

Machine
A

1
2
3
4

31

C) Maximum Assignment Problems

On the previous, we only solve the minimum problems of
assignment problems. How to solve the maximum
problems?
Example:
Table below shown the profit from four products that
produced at four places. Assign the product to place in
order to get the maximum profit.
Product
1
2
3
4

Place
A
$20
60
80
65

B
60
30
100
80

C
50
80
90
75

D
55
75
80
70

Solution:
We can obtain an equivalent minimization assignment
problem by converting all the elements in the matrix to
opportunity losses. We do so by subtracting every element
in the table from the largest number (100) in the table.
Product

Place
A

1
2
3
32

4
Product

Place
A

1
2
3
4
Product

Place
A

1
2
3
4
Product

Place
A

1
2
3
4
Product

Place
A

1
2
3
4

33

Exercises:
1.

The Omega pharmaceutical firm has five salespersons, whom the firm
wants to assign to five sales regions. Given their various previous
contacts, the salespersons are able to cover the regions in different
amounts of time. The amount of time (days) required by each
salesperson to cover each city is shown in the following table. Which
salesperson should be assigned to each region to minimize total time?
Identify the optimal assignments and compute total minimum time.
Salesperson
1
2
3
4
5

2.

A
17
12
11
14
13

B
10
9
16
10
12

Region
C
15
16
14
10
9

D
16
9
15
18
15

E
20
14
12
17
11

The Bunkers Manufacturing firm has five employees and six

machines and wants to assign the employees to the machines to
minimize cost. A cost table showing the cost incurred by each
employee on each machine follows. Because of union rules regarding
departmental transfers, employee 3 cannot be assigned to machine E
and employee 4 cannot be assigned to machine B. Solve this problem,
indicate the optimal assignment, and compute total minimum cost.
Employee
1
2
3
4
5

A
$12
10
5
9
10

B
7
14
3
11
6

Machine
C
D
20
14
13
20
6
9
7
16
14
8

E
8
9
7
9
10

F
10
11
10
10
12

34

3.

A university department head has five instructors to be assigned to

four different courses. All of the instructors have taught the courses in
the past and have been evaluated by the students. The rating for each
instructor for each course is given in the following table (a perfect
score is 100). The department head wants to know the optimal
assignment of instructors to courses that will maximize the overall
average evaluation. The instructor who is not assigned to teach a
course will be assigned to grade exams.
Instructor
1
2
3
4
5

Course
A
80
95
85
93
91

B
75
90
95
91
92

C
90
90
88
80
93

D
85
97
91
84
88

35