Transportation Problem

Sasadhar Bera, IIM Ranchi

What is Transportation Problem?

The transportation model is a special class of the linear
programming problem.
Transportation deals with the situation in which a
commodity is shipped from sources to destinations.
The objective is to determine the amount of shipment
from sources to each destination that minimize the total
shipping cost while satisfying both the supply limits and
the demand requirement.

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Sasadhar Bera, IIM Ranchi

Network Representation

There are m number of origins and n number of destinations. Si

represents units of supply at ith origin and Dj indicates units of
demand at jth destination. cij represents transportation cost per
one unit item from ith origin to jth destination.
Sasadhar Bera, IIM Ranchi

Two Origins and Three Destinations

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Tabular Form

TS: Total Supply, TD: Total Demand

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LP formulation of Transportation Problem

xij : Amount transported from ith origin to jth destination
cij = unit transportation cost or shipping cost per unit item from ith origin to
jth destination.
Si supply amount available at ith origin, i =1 , 2, . .,m
Dj demand for jth destination, j = 1, 2, . . .,n
m may be = n, < > n
Total supply = TS =
Total Demand = TD =
Objective function = Zmin =
subject to

,,

Total number of variables = mn

Total number of constraints =(m+n). However, because the transportation
model is balanced (TD = TS), one of these equations must be redundant.
Thus, the model has (m+n-1) independent constraint equations i.e. (m+n-1)
numbers of restrictions.
Sasadhar Bera, IIM Ranchi

Transportation Problem: Example

The Navy has 9,000 pounds of material in Albany, Georgia that
it wishes to ship to three installations: San Diego, Norfolk, and
Pensacola. They require 4,000, 2,500, and 2,500 pounds,
respectively. Government regulations require equal
distribution of shipping among the three carriers.
The shipping costs ($) per pound for truck, railroad, and
airplane transit are shown below. Formulate and solve a linear
program to determine the shipping arrangements (mode,
destination, and quantity) that will minimize the total shipping
cost.
Mode
Truck
Railroad
Airplane

Destination
San Diego
Norfolk
12
6
20
11
30
26

Pensacola
5
9
28

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Sasadhar Bera, IIM Ranchi

Transportation Problem: Example (contd.)

Define the Decision Variables

We want to determine the pounds of material, xij , to be shipped

by mode i to destination j. The following table summarizes the
decision variables:
San Diego Norfolk Pensacola
Truck
x11
x12
x13
Railroad
x21
x22
x23
Airplane
x31
x32
x33

Min: (shipping cost per pound for each mode per destination pairing)
*(number of pounds shipped by mode per destination pairing).
ZMin: 12x11 + 6x12 + 5x13 + 20x21 + 11x22 + 9x23 + 30x31 + 26x32 + 28x33
Sasadhar Bera, IIM Ranchi

Transportation Problem: Example (contd.)

Define the Constraints
Equal use of transportation modes:
(1) x11 + x12 + x13
= 3000
(2)
x21 + x22 + x23
= 3000
(3)
x31 + x32 + x33 = 3000
Destination material requirements:
(4) x11 + x21 + x31
= 4000
(5)
x12 + x22 + x32
= 2500
(6)
x13 + x23 + x33 = 2500
Non-negativity of variables:
xij > 0, integer i = 1,2,3 and j = 1,2,3
Sasadhar Bera, IIM Ranchi

Transportation Problem: Example (contd.)

OBJECTIVE FUNCTION VALUE = 142000
Variable Value Reduced Cost
x11
1000.000
0.000
x12
2000.000
0.000
San Diego Norfolk Pensacola
Truck
x11
x12
x13
x13
0.000
1.000
Railroad
x21
x22
x23
x21
0.000
3.000
Airplane
x31
x32
x33
x22
500.000
0.000
x23
2500.000
0.000
x31
3000.000
0.000
x32
0.000
2.000
x33
0.000
6.000
Solution Summary
San Diego will receive 1000 lbs. by truck and 3000 lbs. by airplane.
Norfolk will receive 2000 lbs. by truck and 500 lbs. by railroad.
Pensacola will receive 2500 lbs. by railroad.
The total shipping cost will be $142,000.
Sasadhar Bera, IIM Ranchi

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Special Purpose Algorithm to Solve

Transportation Problem
Transportation problem can be solved using LP. Due to
special structure of the transportation problem
special-purpose algorithms are developed to find out the
optimal solution. These special purpose algorithms are
computationally efficient (less complicated and less
computer memory required) than simplex method.
Two such types of solution algorithm are given below.
Vogel approximation method (VAM)
Modified distribution method (MODI)
VAM is used to generate the initial solution. Next, MODI is
used to find out optimal solution.
Sasadhar Bera, IIM Ranchi

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Categories of Transportation Model

In real life problems, it is observed that total supply is not
equal to total demand. That is why we divide transportation
model into two categories:
Balanced transportation
Unbalanced transportation
Balanced transportation: A transportation problem in
which the total supply available at origins exactly satisfies
the total demand required at the destinations. In this case
Total supply (TS) = Total demand (TD).
Unbalanced transportation: In real life problems, total
supply is not equal to total demand. For solution of nonbalanced transportation problem we make it balanced by
adding dummy variable.
Sasadhar Bera, IIM Ranchi

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Unbalanced Transportation Model

Total supply (TS) > Total demand (TD), surplus available of resources.

Sasadhar Bera, IIM Ranchi

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Unbalanced Transportation Model (contd.)

Total supply (TS) > Total demand (TD), surplus available of resources.
By adding dummy demand variable we make it balanced.

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Sasadhar Bera, IIM Ranchi

Unbalanced Transportation Model (contd.)

Total supply (TS) < Total demand (TD) , Shortage of demand.

In such a situation, we add dummy origin variable to make it

balanced
Sasadhar Bera, IIM Ranchi

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Degeneracy in Transportation Problem

A feasible solution to transportation problem has mn
decision variables where m is number of origins and n is
number of destinations.
The solution is said to be degenerate if the number of
occupied cells is less than (m+n-1) at any stage of solution.
Degeneracy can occur at two stages:
At initial solution stage
During testing of the optimal solution

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Sasadhar Bera, IIM Ranchi

How to Handle Degeneracy?

To handle degeneracy, we make use of an artificial quantity,
denoted by (epsilon). If is placed in the unoccupied cell
then the cell is considered occupied. The quantity is so
small that it does not affect the supply and demand
constraints.

For calculation purpose, the value of is assumed to be

zero and we try to place at lowest unallocated cost cell.
Once is introduced into the solution, it will remain there
until degeneracy is removed or a final solution is arrived at,
whichever occurs first.

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Sasadhar Bera, IIM Ranchi

Degeneracy Example

Total number of restrictions = 4+4-1 = 7 but occupied cells = 6.

Hence to remove degeneracy, is allocated to lowest
unallocated cost cell.
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Capacitated Transportation Problem

A transportation problem that includes constraints (less than type or
greater than type) called capacitated transportation problem. It is
happen due to capacity for a particular transport (for less than type
constraints) or minimum quantity should be transported to a
particular road (for greater than type constraints).
xij : Amount transported from ith origin to jth destination
cij = unit transportation cost or shipping cost per unit item from ith origin to
jth destination.
Si = supply or capacity at ith origin, i =1 , 2, . .,m
Dj = demand for jth destination, j = 1, 2, . . .,n
Objective function = Zmin =
subject to

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Sasadhar Bera, IIM Ranchi