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    Transportation Problem

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    Astherielle Faye
    The document discusses transportation problems and methods for solving them. Transportation problems aim to minimize transportation costs by determining the optimal way to transport commodities from suppliers to demand locations. There are three main methods for obtaining an initial feasible solution: northwest corner method, least cost method, and Vogel's approximation method. The least cost method is illustrated through an example of distributing supplies from factories to stores with the goal of minimizing total transportation costs.

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    Transportation Problem

    Uploaded by

    Astherielle Faye
    27 views2 pages
    The document discusses transportation problems and methods for solving them. Transportation problems aim to minimize transportation costs by determining the optimal way to transport commodities from suppliers to demand locations. There are three main methods for obtaining an initial feasible solution: northwest corner method, least cost method, and Vogel's approximation method. The least cost method is illustrated through an example of distributing supplies from factories to stores with the goal of minimizing total transportation costs.

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    TRANSPORTATION PROBLEM

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    The document discusses transportation problems and methods for solving them. Transportation problems aim to minimize transportation costs by determining the optimal way to transport commodities from suppliers to demand locations. There are three main methods for obtaining an initial feasible solution: northwest corner method, least cost method, and Vogel's approximation method. The least cost method is illustrated through an example of distributing supplies from factories to stores with the goal of minimizing total transportation costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views2 pages

    Transportation Problem

    Uploaded by

    Astherielle Faye
    The document discusses transportation problems and methods for solving them. Transportation problems aim to minimize transportation costs by determining the optimal way to transport commodities from suppliers to demand locations. There are three main methods for obtaining an initial feasible solution: northwest corner method, least cost method, and Vogel's approximation method. The least cost method is illustrated through an example of distributing supplies from factories to stores with the goal of minimizing total transportation costs.

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    TRANSPORTATION PROBLEM

    OM MODULE

    Transportation problem works in a way of minimizing the cost function. Here, the
    cost function is the amount of money spent to the logistics provider for transporting the
    commodities from production or supplier place to the demand place. Many factors decide the
    cost of transport. It includes the distance between the two locations, the path followed, mode
    of transport, the number of units that are transported, the speed of transport, etc. So, the
    focus here is to transport the commodities with minimum transportation cost without any
    compromise in supply and demand. The transportation problem is an extension of linear
    programming technique because the transportation costs are formulated as a linear function
    to the supply capacity and demand.

    Methods of Solving Transportation Problem

    The Methods of solving transportation problem are

    Step 1: Formulate the problem.


    Formulate the given problem and set up in a matrix form. Check whether the problem is a balanced
    or unbalanced transportation problem. If unbalanced, add dummy source (row) or dummy destination
    (column) as required.

    Step 2: Obtain the initial feasible solution.

    The initial feasible solution can be obtained by any of the following three methods:
    Northwest Corner Method (NWC)
    Least Cost Method (LCM)
    Vogel’s Approximation Method (VAM)

    The transportation cost of the initial basic feasible solution through Vogel’s approximation method,
    VAM will be the least when compared to the other two methods which gives the value nearer to the
    optimal solution or optimal solution itself. Algorithms for all the three methods to find the initial
    basic feasible solution are given.

    Algorithm for North-West Corner Method (NWC)


    Select the North-west (i.e., upper left) corner cell of the table and allocate the maximum possible
    units between the supply and demand requirements. During allocation, the transportation cost is
    completely discarded (not taken into consideration).
    Delete that row or column which has no values (fully exhausted) for supply or demand.
    Now, with the new reduced table, again select the North-west corner cell and allocate the
    available values.
    i. Repeat steps (ii) and (iii) until all the supply and demand values are zero.
    Obtain the initial basic feasible solution.
    Algorithm for Least Cost Method (LCM)
    Select the smallest transportation cost cell available in the entire table and allocate the supply and
    demand.
    Delete that row/column which has exhausted. The deleted row/column must not be considered for further
    allocation.
    Again select the smallest cost cell in the existing table and allocate. (Note: In case, if there are more than
    one smallest costs, select the cells where maximum allocation can be made)
    Obtain the initial basic feasible solution.
    Algorithm for Vogel’s Approximation Method (VAM)
    Calculate penalties for each row and column by taking the difference between the smallest cost and next
    highest cost available in that row/column. If there are two smallest costs, then the penalty is zero.
    Select the row/column, which has the largest penalty and make allocation in the cell having the least cost
    in the selected row/column. If two or more equal penalties exist, select one where a row/column contains
    minimum unit cost. If there is again a tie, select one where maximum allocation can be made.
    Delete the row/column, which has satisfied the supply and demand.
    Repeat steps (i) and (ii) until the entire supply and demands are satisfied.
    Obtain the initial basic feasible solution.
    Remarks: The initial solution obtained by any of the three methods must satisfy the following
    conditions:
    The solution must be feasible, i.e., the supply and demand constraints must be satisfied (also known as
    rim conditions).
    The number of positive allocations, N must be equal to m+n-1, where m is the number of rows and n is
    the number of columns.

    Example problem on Transportation using Least Cost Method

    FACTORY STORE
    A B C D SUPPLY
    1 5 2 4 3 22
    2 4 8 1 6 15
    3 4 6 7 5 8
    Demand 7 12 17 9 45

    Steps in solving least cost method


    1. Determine first if demand is equal the supply
    2. Determine the lowest cost in all cells and deliver the appropriate supply needed
    3. Cross out completed cells
    4. Proceed until the total distribution is done
    5. Compute the total cost
    Solution

    FACTORY STORE
    A B C D SUPPLY
    1 5 2] 12 4]1 3]9 22/10/0
    2 4 8 1] 15 6 15/0
    3 4] 7 6 7] 1 5 8/1/0
    Demand 7/0 12/0 17/2/0 9/0 45

    Determine the cost:


    2x12 + 4X1 + 3X9 + 1X15 + 4X7 + 7X1 = 105

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