T RANSPORTATION PROBLEM

Alena Rybickova

CTU, Prague
T RANSPORTATION PROBLEM

m number of sources (plants, producers, suppliers)

ai capacity of i-th source

n number of destinations (customers, consumers)

bj demand of j-th destination

cij unit shipping cost between i-th source and j-th destination
xij amount of material shipped between i-th source and j-th
destination
T RANSPORTATION PROBLEM

Objective function:
n X
X m
cij xij → min
i=1 j=1

Problem constraints:
n
X
xij = bj , j = 1...m
i=1

m
X
xij = ai , i = 1...n
j=1

Non-negative constraints:

xij ≥ 0, i = 1...n, j = 1...m

I NITIAL SOLUTION

A. North west corner rule (NWC)

B. Least cost method (LCM)
C. Vogel’s approximation method (VAM)
L EAST COST METHOD (LCM)

S TEP 1: Select the cell with the least unit transportation cost and allocate
as many units as possible to that cell.
S TEP 2: If the minimum cost exists in several cells, select a cell arbitrarily
and assign the possible number of goods. Then consider the
remaining cells of the same unit transportation cost.
S TEP 3: Select a cell with the next higher unit transportation cost and
continue the process till all requirements are met.
V OGEL’ S APPROXIMATION METHOD (VAM)

S TEP 1: Determine the difference between the lowest two cells in all rows
and columns, including dummies.
S TEP 2: Identify the row or column with the largest difference.
S TEP 3: Allocate as much as possible to the lowest-cost cell in the row or
column with the highest difference.
S TEP 4: Stop the process if all row and column requirements are met. If
not, go to the next step.
S TEP 5: Recalculate the differences between the two lowest cells
remaining in all rows and columns. Any row and column with
zero supply or demand should not be used in calculating further
differences. Then go to Step 2.
MODI

S TEP 1: Finding an initial basic feasible solution.

S TEP 2: Testing the solution for optimality.
S TEP 3: Improving the solution, when it is not optimal.
S TEP 4: Repeating steps (2) and (3) until the optimal solution is obtained.
MODI

Optimality test:
1. Create equations for each occupied cell (non-zero xij )

ui + vj = cij

2. Solve the system of equations (first value is chosen arbitrary,

usually zero).
3. Compute the reduced costs for each unused square:

rij = cij − ui − vj

4. If all reduced costs are positive, solution is optimal.

MODI

Solution improvement:
1. Select unoccupied cell with smallest value of reduced cost
(negative).
2. Starting in this cell, find a closed cycle with corners in occupied
cells.
3. Assign alternately + and - to the corner cells (starting +). Find
minimum of - cells. Increase and decrease xij on the cycle by this
value.