Transportation

Method

GUIDE BY:- NAME:-

PROF. D. H. PATEL KIKANI HARDIK A.
(12012041045)(07MC35)(MC-A-D3)
 Outline
 Transportation Modeling
Benefits and application
 Methods Of Transportation
Obtain the initial Feasible Solution using
1. Northwest – Corner Rule
2. Intuitive Least cost method/Minimization Method
3. Vogel’s Approximation Method
Obtain Feasible Solution for Optimality using
1. Modifies Distribution Method
 Transportation Modeling
 What is Transportation Model?
A Transportation Model(TP) consists of determining how to route
products in a situation where there are several destination in order that
the total cost of Transportation is minimized.
 Can be used to help resolve distribution and location decisions
 Need to Know:
1. The origin points and the capacity or supply per period at each.
2. The destination points and the demand per period at each.
3. The cost of shipping one unit from each origin to each
destination.
 Transportation Problem

Andheri Bandra Candivali

From
Dadar 5 4 3

Elphinston 8 4 3

Fort 9 7 5
 DEVELOPING AN INITIAL SOLUTION –
THE NORTHWEST CORNER RULE
 Once the data have been arranged in tabular form, we must establish
an initial feasible solution to the problem.
 One systematic procedure, known as northwest corner rule, requires
that we start in the upper left hand cell(or northwest corner) of the
table and allocate units to shipping routes as follows.
 Exhaust the supply (factory supply) at each row before moving down
to the next row.
 Exhaust the (warehouse) requirement of each column before moving
to the next column, on the right.
 Check that all the supply and demands are met.
 Demand Not Equal To Supply
 A situation occurring quite frequently in real-word problem is the
case where total demand is not equal to total supply.
 these unbalanced problems can be handled easily by introducing a
dummy destination or dummy supply.
 In the event that total supply is greater than total demand, a dummy
destination, with demand exactly equal to the surplus, is created.
 In total demand is greater than total supply, we introduce a dummy
source(factory) with a supply equal to the excess of demand over
supply.
 In either ease, cost coefficients of zero are assigned to each dummy
location.
 Drawbacks
 TheNorthwest – corner rule is easy to use, but this
approach totally ignores the costs.
 Demand not equal to supply.
 Called an unbalanced problem.
 Resolved by introducing dummy source or dummy
destination where in the aim of transportation
model is minimization of cost so introducing a
dummy source is nit a good solution.
 Missing out the best cost effective path.
 Intuitive Lowest – Cost Method

 Identify the cell with the lowest cost.

 Allocate as many units as possible to that cell without
exceeding supply or demand; then cross out the row or
column (or both) that is exhausted by this assignment.
 Find the cell with the lowest cost from the remaining cells.
 Repeat steps 2 and 3 until have boon allocated.
 Vogel’s Approximation Method
 Calculate penalty for each row and column by taking the difference b/w the two
smallest unit costs. This penalty or extra cost has to be paid if one fails to allocate
the minimum unit transportation cost.
 Select the row or column with the highest penalty and select the minimum unit
cost of that row or column. Then, allocate the minimum of supply or demand
values in that cell. If there is a tie, then select the cell where maximum allocation
could be made.
 Adjust the supply and demand and eliminate the satisfied row or column. If a row
and column are satisfies simultaneously, only of them is eliminated and the other
one is assigned a zero value. Any row or column having zero supply or demand,
can not be used in calculating future penalties.
 Repeat the process until all the supply sources and demand destinations are
satisfied.
 Vogel’s Approximation Method

 The total transportation cost obtained by this method

= 8*8+19*5+20*10+10*2+40*7+60*2
= Rs. 4055
 Here, we can see that Vogel’s Approximation method
involves the lowest cost than Northwest – corner Method
Least Cost Method and hence is the most preferred method
of finding initial basic feasible solution.
 Benefits of Vogel’s Approximation
method
 VAM is an improved version of the least-cost method that
generally, but not always, produces better starting solution.
 This method is preferred over the other methods because it
generally yields, an optimum, or close to optimum, starting
solution.
Obtain Feasible Solution For Optimality
Using MODI Method

The modified distribution method,

MODI for short, is an improvement over
the stepping stone method for testing
finding optimal solutions.
 Steps Involved in MODI Method
 Find a basic solution by any standard method. If supply
and demand are equal then it is a balanced transportation
problem.
 Test for optimality. The number of occupied cells should
equal to (m + n -1). If the initial basic feasible solution
does not satisfy this rule, then optimal solution cannot be
obtained. Such solution is a degenerate solution.
 Set up a cost matrix for allocated cells only.
 Why MODI Method?

 It is the simplex method.

 It is a minimum cost solution to the
transportation problem.
 All the drawbacks which were in all the three
method is covered in this MODI method.
Thank You!!