INDEX

CHAPTER-1 INTRODUCTION
1.1 Operation research
1.2 Assignment model
1.3 Transportation model
1.4 Assignment and transportation model

CHAPTER-2 ASSIGNMENT MODEL

2.1 Objectives
2.2 Balanced and Unbalanced assignment problem
2.3 Prohibited assignment problem
2.4 Formulation of the problem
2.5 Different methods of assignment problem
2.6 Computational procedure
2.7 Worked examples
2.8 Minimization method
2.9 Maximization method
2.10 Traveling salesman problem
.
CHAPTER-1
 CHAPTER-1
INTRODUCTION
1.1OPERATION RESEARCH:

The history of Operation Research (OR) can be traced to the origins of

the discipline during world war2.
The term operations research describes the discipline that is focused on
the application of information technology for informed decision making. In
other words, OR represents the study of optimal resource allocation. The goal
of OR is to provide rational bases for decision making by seeking to understand
the structure complex situations, and to utilize this understanding to predict
system behavior and improve system performance. Much of the actual work is
conducted by using analytical and numerical techniques to develop and
manipulate mathematical models of organizational system that are composed of
people, machines and procedures.
OR may assist decision-makers in almost any management function. To
illustrate, OR supports the key decision making process, allows to solve urgent
problems, can be utilized to design improved multistep operations, setup
policies, supports the planning and forecasting steps and measures actual
results.
Technical labels such as multi-criteria decision analysis, linear and non
linear programming, discrete event, simulation, queuing and stochastic process
modeling, conjoint analysis, or natural networking further foster this general
impression. Most projects apply one of three broad groups of methods, which
may be described as.
 Simulation methods, where the goal is to develop simulators that
provide the decision-maker with the ability to conduct sensitivity
studies.
1. Search for improvements, 2.to test and benchmark the
improvement ideas that are being made.
 Optimization methods, where the goal is to enable the decision
maker to search among possible choices in an efficient and
effective manner.
 Data-analysis methods, where the goal is to aid the decision-
maker in detecting actual patterns and inter-connections in data
set.
In general OR composed of several optimal models. In this desecrations, two
popular optimal models
Assignment model and Transportation model are taken as study area.
A detailed study in made on the area and discussed in the subsequent sections.
1.2 ABOUT ASSIGNMENT MODEL

Imagine, if in a printing press there is one machine and one operator is

there to operate. How would you employ the worker?
Your immediate answer will be, the available operator will operate the
machine.
Again suppose there are two machines in the press and two operators are
engaged at different rates to operate them. Which operator should operate
which machine for maximizing the profit?
Similarly, if there are n machines available and n persons are engaged at
different rates to operate them. Which operator should be assigned to which
machine to ensure maximum efficiency?
We have to find such as assignment by which the press gets maximum
profit on minimum investment. Such problems are known as “Assignment
model”.
The assignment model can be stated as a problem where different jobs
are to be assigned to different machines on the basis of the cost of doing these
jobs. The objective is to minimize the total cost of doing all the jobs on
different machines.
The peculiarity of the assignment problem is only one job can be
assigned to one-to-one assignment.
The cost data is given as a matrix where rows correspond to jobs and
columns to machines and there are as many rows as the number of columns.
i.e. the number of jobs and number of machines should be equal.
Assignment becomes a problem because each job requires different
skills and the capacity of efficiency of each person with respect to these jobs
can be different. This gives rise to cost differences. If each person is able to do
all jobs equally efficiently then all costs will be the same and each job can be
assigned to any person.

1.3 ABOUT TRANSPORATION MODEL:

As already defined and discussed, the simplex procedure can be

regarded as the most generalized method for linear programming problems.
However, there is very interesting class of ‘Allocation Methods’ which is
applied to a lot of very practical problems generally called ‘Transportation
problems’. Whenever it is possible to place the given linear programming
problem in the transportation frame-work, it is far simpler to solve it by
‘Transportation Technique’ than by ‘Simplex’.
Let the nature of transportation problem be first examined. If there are
more than one centre, called ‘origins’, from where the goods need to be
shipped to more than one places called ‘destinations’ and the cost of shipping
from each of the origins to each of the destinations being different and known,
the problem is to ship the cost of shipping or transportation is minimum. The
various features of linear programming can be observed in these problems.
Here the availability as well as requirements of the various centres are finite
and constitute the limited resources. It is also assumed that the cost of shipping
is linear (for example, the costs of shipping of two objects will be twice that of
shipping a single object.) However, this condition is not often true in practical
problems, but will have to assume so that the linear programming technique
may be applicable to such problems. These problems thus could also be solved
by ‘Simplex’.

A transportation problem is concerned with transportation methods or

selecting routes in a product distribution network among the manufacturing
plants and distribution warehouse situated in different regions or local outlets.
In applying transportation method, management is searching for a
distribution route, which can lead to minimization of transportation cost or
maximization of profit.
The problem involved belongs to a family of structured LPP called
network flow problem.

1.4ASSIGNMENT AND TRANSPORTATION MODEL

When assignment is a problem it becomes typical optimization problem

it can therefore be compared to a transportation problem. The costs of elements
are given and are a square matrix and requirement at each destination is one
availability at each origin is also one.
In addition we have number of origins which equals the number of
destinations hence the total demand equals total supply. There is only one
assignment in each row and each column. However, if we compare this to a
transportation problem we find that a general transportation problem does not
have the above mentioned limitations are peculiar to assignment problem only.
CHAPTER-2
 CHAPTER-2

ASSIGNMENT MODEL

As already discussed, linear programming relates to the problem

concerning distributions of various resources (such as money, machines, time
etc.), satisfying some constraints which can be algebraically represented as
linear equations/inequalities so as to maximize profit or minimize cost. This
chapter deals with a very interesting method called the ‘Assignment
Technique’ which is applicable to a class of very practical problem generally
called ‘Assignment problems’.

2.1 Objectives:

 It should be one-to-one assignment.

 The number of jobs and number of machines should be equal.
 It is to minimize the total cost of doing all the jobs on different
machines.

2.2 Balanced and Unbalanced assignment problem:

2.2.1 Balanced assignment problem:

A “balanced assignment” problem is one where the number of rows =

the number of columns.

i.e. Balanced assignment problem: no. of. Rows = no. of. Columns.

2.2.2 Unbalanced assignment problem:

An “unbalanced assignment” problem is one which the number of rows

not equal to the number of columns.
Example:
The number of machines may be more than the number of jobs (or) the
number of jobs may be more than the number of machines.
i.e.) unbalanced assignment problem: no. of. Rows not equal no. of. Columns.
2.3 Prohibited assignment problem:
A usual assignment problem presumes that all jobs can be performed by
all individuals there can be free or unrestricted assignment of jobs and
individuals. A prohibited assignment problem occurs when a machine may not
be in a position to perform a particular job as there are some technical
difficulties in using a certain machine for a certain job. In such cases the
assignment is constrained by given facts.
To solve this type problem of restriction on job assignment we will have
to assign a very high cost M this ensures that restricted impractical combination
does not enter the optimal assignment plan which of total cost.
2.4 Formulation of the problem: Let there are n jobs and n persons are
available with different skills. If the cost of doing jth work by ith persons is Cij.
Then the cost matrix is given in the table below.

Jobs

Persons 1 2 …… j …..n

1 C11 C12 …… C1j ….C1n

2 C21 C22 …… C2j ….C2n

. . . …… . ……
. . . …… . ……
. . . …… . ..…..
i Ci1 Ci2 …… Cij ....Cin

. . . …… . ……
. . . …… . ……
. . . …… . ……
n Cn1 Cn2 …… Cnj ....Cnn
n n

To minimize z (cost) = ∑∑CijXij

i =1 j =1

Where Xij = {1; if i person is assigned jth work

th

0; if ith person is not assigned the jth work }

With the restriction.

n
1) ∑ Xij ; j = 1, 2,…..n. i.e. ith person will do only one work.
i =1

2) ∑Xij ; i = 1, 2,…..n. i.e. jth work will be done only one person.
j =1
2.5 DIFFERENT METHODS OF ASSIGNMENT

ASSIGNMENT PROBLEM

Complete Simplex Transportation Hungarian method

enumeration method problem

2.5.1 COMPLETE ENUMERATION METHOD:

This method can be used in case of assignment problems of small size.

In such cases a complete enumeration and evaluation of all combinations of
persons and jobs is possible.
One can select optimal combination; we way also come across more than
one optimal combination the number of combination increases manifold as the
size of the problem increases as the total number of possible combinations
depends on the number of say, jobs and machines. Hence the use of
enumeration method is not feasible in real world cases.

2.5.2 SIMPLEX METHOD:

The assignment problem can be formulated as a linear programming

problem and hence can be solved by using simplex method. However solving
the problem using simplex method can be a tedious job.

2.5.3TRANSPORTATION METHOD:

The assignment problem is comparable to transportation problem hence

transportation method of solution can be used to find optimum allocation.
However the major problem degenerate as the allocation is on basis one-to-one
per person per job. Hence we need a method specially designed to solve
assignment problems.
2.5.4 HUNGARIAN ASSIGNMENT METHOD:

This method is based on the concept of opportunity cost and is more

efficient in solving assignment problems.
In order to find the proper assignment it is essential for us to know the
Hungarian method. This method is dependent upon two vital theorems, stated
as below.

Theorem 1:

If a constant is added (or subtracted) to every element of any row (or

column) of the matrix [Cij] in an assignment problem then an assignment
which minimizes the total cost for the new matrix will also minimize the total
cost matrix.

Theorem 2:

If all Cij ≥ 0 and there exist a solution.

Xij = Xij such that ∑CijXij

i
=0

Then this solution is an optimal solution, i.e.) minimize z.

2.6 THE COMPUATIONAL PROCEDURE IS GIVEN AS UNDER

STEP 1(A) ROW REDUCTION;

Subtract the minimum entry of each row from all the entries of the
respective row in the cost matrix.

(B) COLUMN REDUCTION;

After completion of row reduction, subtract the minimum entry of each

column from all the entries of the respective column.

STEP 2 ZERO ASSIGNMENT;

A) Starting with first row of the matrix received in first step, examine
the row one by one until a row containing exactly one zero is found.
Then an experimental assignment indicated by – is marked to that
zero.
Now cross all the zeros in the column in which the assignment is
made. This procedure should be adopted for each row
assignment.
 B) When the set of rows has been completely examined, an identical
procedure is applied successively to columns. Starting with column
1, examine all columns until a column containing exactly one zero is
found. Then make an experimental assignment in that position and
cross other zeros in the row which the assignment was made.
Continue these successive operations on rows and columns until
all zeros have either been assigned or crossed-out.

Now there are two possibilities;

a) Either all the zeros are assigned or crossed out. i.e. we get the maximal
assignment. (or)
b) At least two zeros are remained by assignment or by crossing out in
each row or column. In this situation we try to exclude some of the zeros
by trial and error method.
This completes the second step. After this step we can get situations.
i)Total assigned zeros=n
The assignment is optimal.
ii)Total assigned zeros <n
Use step 3 and onwards.

STEP 3:
DRAW OF MINIMUM LINES TO COVER ZEROS.

In order to cover all the zeros at least once you adopt the following
procedure.

i) Marks ( √ ) to all rows in which the assignment has not been done.
ii) See the position of zeros in marked ( √ ) row and mark ( √ ) to the
corresponding column.
iii) See the marked ( √ ) column and find the position of assigned zeros
and then mark ( √ ) to the corresponding rows which are not marked
till now.
iv) Repeat the procedure (ii) and (iii) till the completion of marking.
v) Draw the lines through unmarked rows and marked columns.

NOTE:
If the above method does not work then make arbitrary assignment and
then follow step iv.
 STEP IV:
SELECT THE SMALLEST ELEMENT FROM THE UNCOVERED
ELEMENTS.

i) Subtract this smallest element from all those elements which are not
covered.
ii) Add this smallest to all those elements which are at the intersection
of two lines.

STEP V:

Thus we have increased the number of zeros. Now modify the matrix with
the help of step (ii) and find required assignment.
This procedure will be more clear by the following examples.

2.7 Worked examples:

Example A:

Four persons A, B,C and D are to be assigned four jobs 1, 2, 3 and 4.The cost
matrix is given as under, find the proper assignment.

Man
Jobs A B C D

1 8 10 17 9

2 3 8 5 6

3 10 12 11 9

4 6 13 9 7
Solution:

In order to find the proper assignment we apply the Hungarian method.

1. A) Row reduction:

Man
A B C D
Jobs

1 0 2 9 1

2 0 5 2 3

3 1 3 2 0

4 0 7 3 1

1 B) Column reduction

Man
Jobs A B C D

1 0 0 7 1

2 0 3 0 3

3 1 1 0 0

4 0 5 1 1
2 (A) and (B) Zero assignment:

Man
Jobs A B C D

1 ⊗ 0 7 1

2 ⊗ 3 0 3

3 1 1 ⊗ 0

4 0 5 1 0

In this way all the zeros are either crossed out or assigned. Also total assigned
zeros = 4 (i.e. Number of rows or columns) Thus, the assignment is optimal.

From the table we get 1 → B, 2 → C, 3 → D and 4 → A.

Example B:

There are five machines and five jobs are to be assigned and the
associated cost matrix is as follows. Find the proper assignment.

Machines

1 2 3 4 5

A 6 12 3 11 15

B 4 2 7 1 10

C 8 11 10 7 11

D 16 19 12 23 21

E 9 5 7 6 10
 Jobs

Solution:

In order to find the proper assignment, we apply the Hungarian method

as follows.
Step 1 A) Row reduction:
Machines

1 2 3 4 5

A 3 9 0 8 12

B 3 1 6 0 9
Jobs
C 1 4 3 0 4

D 4 7 0 11 9

E 4 0 2 1 5

Step 1 B) Column reduction:

Machines

1 2 3 4 5

A 2 9 0 8 8

B 2 1 6 0 5
Jobs
C 0 4 3 0 0

D 3 7 0 11 5

E 3 0 2 1 1
Step 2) Zero Assignment:

Machines

1 2 3 4 5

A 2 9 0 8 8
Jobs
B 2 1 6 0 5
From the last
table we see
C 0 4 3 ⊗ ⊗
that all the
zeros are either D 3 7 ⊗ 11 5
assigned or
crossed out, E 3 0 2 1 1
but the total number of assignment, i.e. 4 < 5 ( number of jobs to be assigned to
machines )
Therefore we have to follow step 3 and onwards as follows.

Step 3:
Machines

1 2 3 4 5

A 2 9 0 8 8

B 2 1 6 0 5
Jobs
C 0 4 3 ⊗ ⊗

D 3 7 ⊗ 11 5

E 3 0 2 1 1

Step 4:
Here, the smallest element among uncovered elements is 2.
i) Subtract 2 from all those elements which are not covered.
 ii) Add 2 to those entries which are at the junction of two lines.

Machines

1 2 3 4 5

A 0 7 0 6 6

B 2 1 8 0 5

C 0 4 5 0 0

D 1 5 0 9 3

E 3 0 4 1 1

Jobs

Step 5:
Using step 2 again.
Machines

1 2 3 4 5

A 0 7 ⊗ 6 6

B 2 1 8 0 5
Jobs
C ⊗ 4 5 ⊗ 0

D 1 5 0 9 3
Thus, we
have got five E 3 0 4 1 1
assignments
as required
by the problem. The assignment is as follows.
A → 1, B → 4, C → 5, D → 3, E → 2.
This assignment holds for table given in step 4 but from theorem 1 it holds for
the original cost matrix.
The cost matrix the minimum cost = 6 + 1 + 11 + 12 + 5
= Rs 35.

2.8 Method in case of a minimization problem:

As we are using the concept “opportunity” this means that the cost of
any opportunity that is lost while taking a particular decision or action is taken
into account while making assignment. Given below are the steps involved to
solve assignment problem by using Hungarian method

Step1
Determine the opportunity cost table

↓
Step 2
Determine the possibility of an optimal
assignment

↓
Step 3
Modify the second reduced cost table

↓
Step 4
Make the optimum assignment

Step 1:
Determine the opportunity cost table 1
• Locate the smallest cost in each row and subtract it from each cost
figure in that row. This would result in at least in each row. The new
table is called “reduced cost table”.
• Locate the lowest cost in each column of the reduced cost table subtract
this figure from each cost figure in that column. This would result in at
least one zero in each row and each column, in the second reduced cost
table.
Step 2:
Determine the possibility of an optimal assignment
• To make an optimal in a say 3×3 table. We should be in a position to
locate 3 zero’s in the table. Such that 3 jobs are assigned to 3 persons
and the total opportunity cost is zero. A very convenient way to
determine such an optimal assignment is as follows.
• Draw minimum number of straight lines vertical and horizontal, to cover
all the zero elements in the second reduced cost table. One cannot draw
a diagonal straight line. The aim is that number of lines (N) to cover all
the zero elements should be minimum. If the number of lines is equal to
the number of rows (or columns) (n) i.e. N =n it is possible to find
optimal assignment.
• Example: for a 3×3 assignment table we need 3 straight lines which
cover all the zero elements in the second reduced cost table. If the
number of lines is less than the number of rows (columns) N<n optimum
assignment cannot be made. We then move to the next step.

Step 3:
Modify the second reduced cost table:
• Select the smallest number in table which is not covered by the lines.
Subtract this number from all uncovered as well as from itself.
• Add this to the element which is at the intersection of any vertical and
horizontal lines.
• Draw minimum number of lines to cover all the zeros in the opportunity
cost table.
• If the number of straight lines at least equals number of rows (columns)
an optimum assignment is possible.

Step 4:
Make the optimum assignment:
If the assignment table is small in size it is easy to make assignment
after step 3. However, in case of large tables it is necessary to make
assignments systematically. So that the total cost is minimum. To decide
optimum allocation.
• Select a row or column in which there is only one zero element and
encircle it Assign the job corresponding to the zero element. Mark a X
in the cells of all other zeros lying in the column (row) of the encircled
zero. So that these zeros cannot for next assignment.
• Again select a row with one zero element from the remaining rows or
columns. Make the next assignment continue in this manner for all the
rows.
• Repeat the process till all the assignments are made i.e. no unmarked
zero is left.
 • Now we will have one encircled zero in each row and each column of
the cost matrix. The assignment made in this manner is optimal.
• Calculate the total cost of assignment from the original given cost table.

2.9 Maximization method:

In order to solve a maximization type problem we find the regret instead

of opportunity cost. The problem can be solved in two ways.
• The first method is by putting a negative sign before the values in the
assignment matrix and then solves the sum as a minimization case
Hungarian methods as shown above.
• Second method is to locate largest value in the matrix in given matrix
and subtract each element in the matrix from this value. Then one can
solve this problem as a minimization case using the modified matrix.
Hence there are mainly four methods to solve assignment problem but the most
efficient and most widely used method is the Hungarian method.

2.10 Traveling salesmen problem:

Traveling salesmen problem is routine problem. It can be considered as

typical assignment problem with certain restrictions. Consider a salesman who
is assigned the job of visiting n different cities. He knows (is given) the
distances between all pairs of cities. He is asked to visit each of the cities only
once. The trip should be continuous and he should come back to the city from
where he started using the shortest route. It does not matter, from which city he
starts. These restrictions imply.

1) No assignment should be made along the diagonal.

2) No city should be included on the route more than once.

This type of problem is quote simple but there is no general algorithm available
for its solution. The problem is usually solved by enumeration method, where
the number of enumeration is very large.
For example:
For a salesman who is instructed to visit five cities we shall have to
consider more than 100 possible routes. The method is therefore impractical for
large size problems and it also implies approximations in finding route with
minimum distance.
The peculiar nature of the problem and the various restrictions imposed
on resulting solution indicate that the method of solution to a traveling
salesman problem should include.
1) Assigning an infinitely large element M in the diagonal of the
distance matrix.
2) Solve the problem using Hungarian method as it gives shortcut route
but,
3) Test the solution for feasibility whether it satisfies the condition of a
continues route which visiting a city more than once.
If the route is not feasible, make adjustments with minimum increase in total
distance traveled by the salesman. This is how one can solve traveling
salesman problem.

RESTRICTION IN ASSIGNMENT PROBLEM:

Assignment technique assume that the problem is free from practical
restriction and any task could be assigned to any facility. But same cases it may
not be possible to assign a particular task for particular due to size, space,
capacities, technical.
This can be assume by assigning very high processing time (or) cost (D) to the
corresponding cell. This cell will be automatically excluded in the assignment,
because of the high time cost associated with it.
 START

Construct the effectiveness

matrix if not already given

Row reduction

Column reduction

Is Zero
assignmen
t possible?

Draw minimum number of lines to cover all the

ASSIGNMENT
zeros.
Put square over the zero and c
Choose the least uncovered element.
out all zeros (if any) of the
Subtract this from the uncovered elements and
corresponding column.
add it to the elements at intersection of the lines.

Is zero
assignme
nt
possible?
SOLUTION
Add the elements of the
given matrix correspond to
each square

STOP
CHAPTER-3
 CHAPTER-3

TRANSPORTATION MODEL
Transportation model is a special type of networks problems that for
shipping a commodity from source. (e.g. Factories) to destination (e.g.
Warehouse)
Transportation model deals with get the minimum cost plan to
transport a commodity from a number of sources (m) to number of
destination (n).
Let Si is the number of supply units required at source
i (I = 1, 2, ….n) dj is number of demand units required at destination
j(j = 1, 2, …..n) and Cij represent the unit transportation cost for
transporting the units from sources i to destination j.
Using linear programming method to solve transportation
problem, we determine the value of objective function which minimize
the cost for transporting and also determine the number of unit can be
transported from source i to destination j.
Let Xij is number of units shipped from source i to destination j
the equivalent linear programming model.

3.1 LP Formulation of Transportation model:

m n

Minimize z = ∑∑CijXij
i =1 j =1

Subject to
n

∑Xij
j =1
= Si for i = 1, 2,…..m.

∑ Xij
i =1
= dj for j = 1, 2,……n.

And

Xij ≥0 for all i to j.

3.2 TABULAR REPRESENTATION:

Suppose there are m factories n warehouse. The transportation problem

is usually represented in a tabular form (Table 1). Calculations are made
directly on the ‘transportation arrays’ which give the current trial solution.

Table-1

Warehouse Factory
→ WI W2 …… Wj …. Wn Capacities
Factory ↓

F1 C11 C12 …… C1j …. C1n a1

F2 C21 C22 …… C2j …. C2n a2
. . . . . .
. . . . . .
Fi Ci1 Ci2 …… Cij …. Cin ai
. . . . . .
. . . . . .
Fm Cm1 Cm2 …… Cmj …. Cmn am

Warehouse
requirement b1 b2 …… bj …. bn ∑ ai = ∑ bj

Table-2

Warehouse Factory
→ W1 W2 …… WJ …. Wn Capacities
Factory ↓

F1 X11 X12 …… X1j …. X1n a1

F2 X21 X22 …… X2j …. X2n a2
. . . . . .
. . . . . .
Fi Xi1 Xi2 …… Xij …. Xin aj
. . . . . .
. . . . . .
Fm Xm1 Xm2 …… Xmj …. Xmn am

Warehouse
requirements b1 b2 …… bj …. bn ∑ ∑
ai = bj
 In general, Table 1 and Table 2 are combined by inserting each unit cost
Cij together with the corresponding amount Xij into the cell ( i, j ) . The
product Xij ( Cij ) gives the net cost of shipping Xij units from factory Fi
to warehouse Wj.

3.3 Definitions:

The following terms may be defined with reference to the transportation

problem (T.P.)
i) Feasible solution(FS):
A set of non-negative individual allocation (xj ≥0) which
simultaneously removes deficiencies is called a feasible solution.
ii) Basic feasible solution (BFS):
A feasible solution to m-origin, n-destination problem is said to
be
Basic if the numbers of positive allocations are m+n-1, i.e., one
less
than the sum of rows and columns (Table 1).
If the number of allocations in a basic feasible solution are less
than
M+n-1, it is called degenerate BFS (Otherwise, non degenerate
BFS).
iii) Optimal solution:
A feasible solution (not necessarily) and sufficient to be optimal
if
It minimizes the total transportation cost.

3.4 Balanced and Unbalanced Transportation problem:

3.4.1 Balanced transportation problem:

Transportation problems that have the supply and demand equal
is a “balanced transportation” problem. In other words requirements for
the rows must equal the requirements for the column.
i.e. ∑ Si = ∑ dj.

3.4.2 Unbalanced transportation problem:

An “unbalanced transportation” problem is that in which the
supply and demand are unequal.
i.e. ∑ Si ≠ ∑ dj.
 There are 2 possibilities that make the problem unbalanced which are

Possibilities that make the problem unbalanced

Aggregate supply exceeds the Aggregate demand exceeds the

aggregate demand aggregate supply

i) Aggregate supply exceeds the demand or

ii) Aggregate demand exceeds the aggregate supply
Such problems are called “Unbalanced problems”. It is necessary to balance
them before they are solved.

Balancing the transportation problem:

Where total supply exceeds total demand:
In such a case the excess supply i.e. assumed to go inventory and cost
nothing for shipping (transporting). This type of problem is balanced by
creating a fractious destination. This serves the same purpose as the slack
variable in the simplex\ method. A column of slack variables is added to the
transportation tableau which represents a dummy destination with a
requirement equal to the amount of excess supply and the transportation cost
equal to zero. This problem can now be solved using the usual transportation
methods.

When aggregate demand exceeds aggregate supply in a transportation

problem:
When aggregate demand exceeds aggregate supply in a transportation
problem a dummy row is added to restore the balance. This row has an
availability equal to the excess demand and each cell of this row has a zero
transportation cost per unit. Once the problem is balanced it can be solved by
the procedures normally used to solve a transportation problem.
3.5 Prohibited transportation problem:
Some times in a given transportation problem some route(s) may not be
available. This could be due to a variety of reasons like.

REASONS FOR UNAVILABILITY OF

ROUTES

Strikes in certain Entry restriction

region
Unfavorable weather
Conditions on a
Particular route. i) Strikes in certain region.
ii) Unfavorable weather conditions
on a particular route.
iii) Entry restriction.

In such situation there is a restriction on the routes available for transportation.

To overcome this difficulty we assign a very large cost M or infinity to such
routes. When a large cost is added to these routes they are automatically
eliminated from the solution. The problem the can be solved using usual
methods.

3.6 Degeneracy in a transportation problem:

The initial basic feasible solution to a transportation problem should
have a total number of occupied cell (stone squares) which is equal to the total
number of rim requirements minus one. i.e.) m+n-1.
When this rule is not met the solution is degenerate.

Degeneracy may occur:

If the number of occupied cells is more than m+n-1.
This type of degeneracy arises only in developing the initial solution. It
is caused by an improper assignment of frequencies or an error in formulating
the problem. In such cases one must modify the initial solution in order to get a
solution which satisfies the rule m+n-1.

The problem becomes degenerate at the

i) Initial stage:
When in the initial solution the number of occupied cells is less than m+n-1
(rim requirements minus 1) i.e.) the number of stone squares in insufficient.
ii) When two or more cells are vacated simultaneously:
Degeneracy may appear subsequently when two or more cells are vacated
simultaneously in the process of transferring the units, along the closed loop
to obtain.

When transportation problem becomes degenerate:

When transportation problem becomes degenerate it cannot be tested for
optimality because it is impossible to compute U and V value with MODI
method. To overcome the problem of insufficient number of occupied cell
we proceed by assigning an infinitesimally small amount (close to zero) to
one or more (if needed) empty cell and treat that cell as occupied cell. This
amount is represented by the Greek letter E(epsilon). It is an insignificant
value and does not affect the total cost. But it is appreciable enough to be
considered a basic variable. When the initial basic solution is degenerate,
we assign C to an independent empty cell. An independent cell is one from
which a closed loop cannot be traced. It is preferably assigned to a cell
which has minimum per unit cost. After introducing e we solve the problem
using usual methods of solution,

3.7 By step procedure to solve a transportation problem;

STEP 1:

Check whether the given transportation problem is balanced or not. If it

is unbalanced then balance it by adding a row or a column.

STEP 2:

Develop initial feasible solution by any one of the five methods.

a) NORTH WEST CORNER RULE (NWCR).

b) VOGEL’S APPROXIMATION METHOD (VAM).

c) MINIMUM-COST METHOD (MCM).

d) ROW MINIMA METHOD (RMM).

e) COLUMN MINIMA METHOD (CMM).

 a) NORTH WEST CORNER RULE (NWCR):

Start with the North West corner of the transportation tableau considers the
cell in the first column and first row. We have values a1 and b1 at the end on
the first row and column. i.e.) the availability at row one is a1 and requirement
of column 1 is b1.

i) If a1 > b1 assign quantity b1 in the cell. i.e.) x1b1. Then proceed

horizontally to the next column in the first row until a1 is exhausted.
i.e.) assign the remaining number in the a1 - b1 in the next column.

ii) If a1 < b1 then put x1a1 and then b1 is satisfied. i.e.) assign b1 - a1
in the next row.

iii) If a1= b1 then put x1 = a1 and proceed diagonally to the next cell or
square determined by next row and next column.

In this way move horizontally until a supply is exhausted, and vertically

down until destination demand is completed and diagonally. When a1 = b1
until SOUTH EAST CORNER of table.

a) Vogel’s approximation method(VAM):

The North West corner rule for initial allocation considers only the
requirements and availability of the goods. It does not take into account
shipping costs given in the tableau. It is therefore, not a very sound method
as it ignores the important factor, namely cost which we seek to minimize.
The VAM, on the other hand consider the cost in each cell while making
the allocations we explain below this method.

i) Consider each row of the cost matrix individually and find the
difference between two least cost cells in it. Then repeat this exercise
for each column. Identify the row or column with the largest
difference (select any one in case of a tie)

ii) Now consider the cell with minimum cost in that column (or row)
and assign the maximum units possible to that cell.

iii) Delete the row/column that is satisfied.

iv) Again find out the differences and proceeds in the same manner as
stated in earlier paragraph and continue until all units have been
assigned.
b) MINIMUM-COST METHOD(MCM):

The minimum cost method finds a better starting solution by

concentrating on the cheapest routes.

i) The method starts by assigning as much as possible to the cell with

the smallest unit cost.

ii) Next, the satisfied row or column is crossed out and the amounts of
supply and demand are adjusted accordingly.

iii) If both a row and column are satisfied simultaneously, only one is
crossed out, the same as in the North West corner method.

iv) The uncrossed-out cell with smallest unit cost and repeat the process
until exactly one row or column is left uncrossed out.

c) ROW MINIMUM METHOD(RMM):

Row minimum method start with first row and choose the lowest cost
cell of first so that either the capacity of the first supply is exhausted or the
demand at jth distribution center is satisfied or both three cases arise.

i) If the capacity of first supply is completely exhausted, cross off the

first row and proceed to the second row.

ii) If the demand at jth distribution center is satisfied cross off the
jthcolumn and reconsider the first row with the remaining capacity.

iii) If the capacities of the first supply as well as the demand at jth
distribution center are completely satisfied, make a zero allocation in
the second lowest cost of the first row cross off the as well as jth
column and move down to the second row.

Continue the process for the reduced transportation table until all rim
conditions (supply and demand condition) are satisfied.

d) COLUMN MINIMUM METHOD (CMM):

 Column minimum method starts with first column and chooses the
lowest cost cell of first column. So that either the demand of the first
distribution ith supply is exhausted or both three cases arise.

i) If the demand of the first distribution center is satisfied, cross of the

first column and move right to the column.

ii) If the capacity of ith supply is satisfied, cross off ith row and
reconsider the first column with the remaining demand.

iii) If the demands of the distribution of the first distribution center as

well as the capacity of the ith supply are completely satisfied, make a
zero allocation in the second lowest cost cell of the first column.
Cross of the column as well as the ith row and move right to the
second column.

Continue the process for the resulting reduced transportation table until all
the rim conditions are satisfied.

STEP 3:
Check for degeneracy.

STEP 4:
Test for optimality:

Use any of the following:

1. MODI METHOD.

2. STEPPING SOLUTION METHOD.

1. MODI METHOD:
Various steps involved in solving any transportation problem
may be summarized in the following iterative procedure.

Step 1:
Find the initial basic feasible solution by using any of the five
methods discussed above.
Step 2:
Check the number of occupied cells. If there are less than m+n-1,
there exists degeneracy and we introduce a very small positive
assignment of ε (≈ 0) in suitable independent position, so that the
number of occupied cells is exactly equal to m+n-1.

Step 3:
For each occupied cell in the current solution, solve the system of
equations ui+vj= cij starting initially with some ui=0 or vj=0 and the
entering successively the values of ui and vj in the transportation table
margins.

Step 4:
Compute the net evaluations zij-cij = ui+vj- cij for all unoccupied
basic cells and enter them in the lower left corners of the corresponding
cells.

Step 5:
Examine the sign of each zij- cij. If all zij - cij≤ 0,then the current
basic feasible solution is an optimum one. If at least one zij- cij> 0, select
the unoccupied cell, having the largest positive net evaluation to enter
the basis.

Step 6:
Let the unoccupied cell ( r,s) enter the basis. Allocate an
unknown quantity, say θ , to the cell ( r,s). Identify a loop that starts and
ends at the cell ( r,s) and connects some of the basic cells. Add and
subtract interchangeably, θ to and from the transition cells of the loop
in such a way that the rim requirements remain satisfied.

Step 7:
 Assign a maximum value to θ in such a way that the value or
one basic variable becomes zero and the other basic variables remain
non-negative. The basic cell whose allocation has been reduced to zero,
leaves the basis.

Step 8:
Return to step 3 and repeat the process until optimum basic
feasible solution has been obtained.

STEPPING STONE SOLUTION METHOD

Step 1:
Find the initial basic feasible solution of the transportation
problem.

Step 2:

Check the number of occupied cells. If there are less than m+n-1,
there exists degeneracy and we introduce a very small quantity
 ∈ (→0) in suitable independent positions, so that the number of
occupied cells is exactly equal to m+n-1.

Step 3:
Compute improvement index for each of the unoccupied cells.
This is computed by calculating the opportunity cost of an unoccupied
cell. This means that if we shift one unit from a cell containing positive
shipment to the unoccupied cell. That will be the net cost. If all the
unoccupied cells have positive improvement index, than the given
solution is an optimum solution.

Step 4:
If there are several unoccupied cells with negative improvement
indices, then we select the cell having the largest negative improvement index
and shift the maximum possible units to that cell without violating the supply
and demand constraints. After it, again go to step 3.

3.8 WORKED EXAMPLE:

Example 3.8.1:
Obtain IBFS to the following transportation problem using North West
corner rule.

D E F G Available

A 11 13 17 14 250

B 16 18 14 10 300

C 21 24 13 10 400

Requirement 200 225 275 250 950

Solution:
D E F G
 200 50 A

11 13 17 14 250\50
175 125
16 18 14 10
B
150 250
300\50
21 24 13 10

C 400/125

200 225 275 250

175 150

IBFS = 200 × 11 + 50 × 13 + 175 × 18 + 125 × 14 + 150 × 13 + 250 × 10

= Rs. 12,200.

Example 3.8.2:
Using minimum cost method
 1 2 3 4 Supply

10 2 20 11 1
15

12 7 9 20
2
25

4 14 16 18

3
10

Demand 5 15 15 15 =50

Solution:

1 2 3 4 Supply

10 2 20 11 1

15 0 15/10/0
12 7 9 20

15 10 2
4 14 16 18 25/20/0
5 5

3 10/5/0

Demand 5/0 15/0 15/0 15/10/0 =50

Example 3.8.3:

Using Vogel’s Approximation method:

1 2 3 4 Supply

10 2 20 11
1 15

12 7 9 20
2
25
4 14 16 18

3
10

Demand 5 15 15 15 =50

Solution:

Step 1:

1 2 3 4 Supply Row
Penalty

10 2 20 11
1 15
10-2=8
12 7 9 20
2 25
9-7=2
4 14 16 18

5 3 10
14-4=10←

Demand 5/0 15 15 15 =50

Column
Penalty 10-4=6 7-2=5 16-9=7 18-11=7
Step 2:

1 2 3 Supply Row
Penalty

2 20 11
1 15\0
15 11-2=9←
7 9 20

2 25 9-7=2
14 16 18

3 10\5
16-4=2

Demand 15 15 15 =50
Column
Penalty 7-2=5 16-9=7 18-11=7

Step 3:

1 2 Supply Row
Penalty

9 20
1 25\10 20-9=11←
15
16 18
Demand 15/0
15
Column
Penalty 16-9=7 20-18=2

The associated objective function value is

Z = 15×2+0×11+15×9+10×20+5×4+5×18
=Rs.475
Example 3.8.4:

Using Row Minimum Method:

1 2 3 4 Supply

10 2 20 11
1
15
12 7 9 20

2
4 14 16 18 25

3
10

Demand 5 15 15 15 =50

Solution:

1 2 3 4 Supply

10 2 20 11
1
15\0 15
12 7 9 20

2 5 15 5
25\20\5\0 4 14 16 18

5 10
3
10\0

Demand 5/0 15/0 15/0 15/10/0

The associated objective function value is

Z=15×2+12×5+9×15+20×5+10×18
=Rs. 505.
Example 3.8.5:

Using Column Minimum Method:

1 2 3 4 Supply

10 2 20 11
1
15
12 7 9 20

2
25 4 14 16 18

3
10

Demand 5 15 15 15 =50

Solution:

1 2 3 4 Supply

10 2 20 11
1 15\0
15
12 7 9 20
2
15 10 25\10\0
4 14 16 18

5 5 3 10\5\0

Demand 5/0 15/0 15/0 15/10/0 =50

The associated objective function value is
Z=4×5+15×2+9×15+10×20+18×5
=Rs.475.

Example 3.8.6:
Find the starting solution in the following transportation problem by Vogel’s
Approximation Method. Also obtain the optimum solution.

D1 D2 D3 D4 Supply

3 7 6 4 S1 5

2 4 3 2 S2 2

4 3 8 5 S3 3

Demand 3 3 2 2

Solution:

Step 1: Initial Basic Feasible Solution.

Following Vogel’s Approximation Method, the differences between the two
successive lowest costs for each row and each column are computed. These are
besides the corresponding rows or columns under the heading ‘row
differences’ or ‘column differences’:
 Row

differences

3 2
(1) (1)
3 7 6 4 (1) 1
2 ∈1
(1) (2)
2 4 3 2 (2) _
3 ∈2

4 3 8 5 (1) (1)
(1) 1

Column
Differences (1) (1) 3 (2)

(1) (1) _ 2

(1) 4 _ (1)

1 _ _ (1)

The largest row differences or column difference is 3 which corresponds to

third column. Allocating as much as possible to the lowest cost cell in the third
column gives x23 =2. This satisfies the supply at S2 and the requirement at D3.
So arbitrarily we cross off third column and consider ∈1 (→0) as the small
quantity to be supplied from S2. The row and column differences are now
recomputed for the reduced cost matrix, and we choose the largest of these, i.e.
2 which corresponds to fourth column. We therefore allocate x24 = ∈1 and
second row is now eliminated. Again, we compute the row and column
differences for the reduced 2×3 transportation table and choose the largest of
these, i.e. 4 corresponding to the second column. We thus allocate x32 = 3 and
eliminate second column while consider ∈2 (→0) being the negligible positive
quantity to be supplied from S3. Again, computing the column and row
differences in the reduced 2×2 cost matrix, we assign x11 =3 and thus eliminate
first column. This leaves now only fourth column, which can be filled by
inspection and thus we assign x14 =2 and x34 =∈2.

The transportation cost according to above allocation is given by

Total cost = 3 × 3 + 2 × 4 + 2 × 3 + ∈1 × 2 + 3 × 3 + ∈2 × 5
= 32 + 2∈1 + 5∈2
= 32 as ∈1 → 0 and ∈2 → 0.

Step 2:

From the initial basic feasible solution obtained in step 1. We observe that
unknown quantities ∈1, ∈2 (>0) have been allocated in the unoccupied cells
(2,4) and (3,4) respectively to overcome the danger of degeneracy.

Step 3:

We now compute the numbers ui (i= 1,2,3,4) using successively the

equations ui + vj = cij for all the occupied cells. For this we arbitrarily assign
v4 = 0. Thus we have

u1 + v4 = c14 ⇒ u1 + 0 = 4 ⇒ u1 = 4
u2 + v4 = c24 ⇒ u2 + 0 = 2 ⇒ u2 =2
u3 + v4 = c34 ⇒ u3 + 0 = 5 ⇒ u3 =5

Given u1, u2 and u3 values of v1, v2, and v3 can be calculated as shown below

u1 + v1 =c11 ⇒ 4 + v1 = 3 ⇒ v1 = -1
u2 + v3 = c23⇒ 2 + v3 = 3 ⇒ v3 = 1
u3 + v2 = c32 ⇒ 5 + v2 = 3 ⇒ v2 = -2

Step 4:

The net evaluations for each of the unoccupied cells are now determined:

z12 - c12 = u1 + v2 – c12 = 4 + (-2) -7 = -5

z13 - c13 = u1 + v3 – c13 = 4 + 1 – 6 = -1
z21 – c21 = u2 + v1 – c21 = 2 + (-1) -2 = -1
z22 – c22 = u2 + v2 – c22 = 2 + (-2) – 4 = -4
z31 – c31 = u3 + v1 – c31 = 5 + (-1) – 4 = 0
z33 – c33 = u3 + v3 – c33 = 5 + 1 -8 = -2

Step 5:

Since all zij –cij ≤ 0, the current basic feasible solution is an optimum one.
It is possible to present a more compact from for computing the unknown ui’s
and vj’s and then evaluate the net evaluation for each of the unoccupied cells in
a more convenient way by working in the transportation table margins:

D1 D2 D3 D4 ui

3 2
S1 4
3 -5 7 -1 6 4
2 ∈1
S2 2
-1 2 -4 4 3 2
3 ∈2
S3 5
0 4 3 -2 8 5
Vj -1 -2 1 0

The optimum solution is

x11 = 3, x14 =2, x23 =2, x24 =∈1, x32 = 3 and x34 =∈2.

The transportation cost associated with the optimum schedule is

3 × 3 + 2 × 4 + 2 × 3 + 2 × ∈1 + 3 × 3 + 5 × ∈2

32 + 2∈1 + 5∈2 or 32 since ∈1 → 0 and ∈2 → 0.

Example 3.8.7:

A company has factories at F1, F2, and F3 which supply warehouse at W1, W2
and W3. Weekly factory capacities are 200, 160 and 90 units respectively.
Weekly warehouse requirements are 180, 120 and 150 units respectively. Unit
shipping costs ( in rupees ) are as follows.
 Factory Warehouse Supply

W1 W2 W3

F1 16 20 12 200

F2 14 8 18 160

F3 26 24 16 90

Demand 180 120 150 450

Determine the optimum distribution for this company to minimize shipping

costs.

Solution:

Following Vogel’s Approximation Method, an initial basic feasible solution is

obtained in the table given below.
W1 W2 W3 Supply

140 60
F1 200

16 20 12
40 120
F2 160

14 8 18
90
F3 90

26 24 16 Demand
180 120
150
The Stepping Stone method starts with an evaluation of each of the unoccupied
cells, viz., (F1, W2), (F2, W3), (F3, W1), (F3, W2) to examine weather it would
improve the initial solution by introducing any of these cells into the current
solution basis. To demonstrate the application of this method let us evaluate the
unoccupied cell (F1, W2) and assign θ units to be shipped from factory F1 to
warehouse W2 . Since the requirements of the warehouse must be satisfied, we
adjust the allocation of cell (F1, W1) by subtracting θ units from the initial
assignment of 140 units which decreases the cost by Rs. 16 per unit. In order to
make this adjustment and to satisfy the supply restriction at factories F1, we
subtract θ units from cell (F2, W2) and then θ units to cell (F2, W1). The
closed path followed in making these adjustments is given below:

By following the closed path and analyzing the unit shipment, we can compute
the incremental cost evaluation of unoccupied cell (F1, W2) as follows:

Cell (i, j) Change in xij Change in total cost

(F1, W2) +1 + 20 × 1

(F1, W1) -1 - 16 × 1

(F2, W1) +1 +14 × 1

(F2, W2) - 1 -8×1

+ 10 Net
change

175
-θ
+
16 θ
20
40 120
140 60
+θ -θ +θ -θ
14 8
16 20 12
40 120

-θ +θ
14 8 18
Table 2 Table 3
This indicates that shift of 1 unit into unoccupied cell (F1, w2) increases the
transportation cost by Rs. 10. Obviously, cell (F1, W2) is not included in the
assignment. Let us compute the opportunity cost for one more unoccupied cell
(F2, W3). As before, we assign θ units (F2, W3) and make necessary
adjustments in cells (F1, W3), (F1, W1) and (F2, W1).The closed path associated
with this assignments is shown.
The change in cost is:
(18 × 1 -12 × 1 + 16 × 1 – 14 × 1), i.e. Rs. 8 per unit.

Since this route is more expensive than our initial solution, we shall not plan
any change based on this evaluation. We now evaluate the remaining
unoccupied cells (F3, W1) and (F3, W2). The path suggested for these is shown
below:

W1 W2 W3 W1 W2 W3

140 60 140 60
+
-θ θ F -θ +
16 20 1 16 20 θ
12 12
40 120 40 120

+θ -
14 8 18 F 14 θ 18
90 2 8
90
+θ -
26 24 θ +θ -θ
16 26 24 16
F
3

Table 4 Table 5

The closed path and an incremental cost change for each of unoccupied cells
are given below:

Unoccupied cell Closed path Net change in cost

(in Rs)

(F1, W2) (F1, W2) → (F2, W2) → (F2, W1) → (F1, W1) + 20 – 8 +14 -16
=10

(F2, W3) (F2, W3) → (F1, W3) → (F1, W1) → (F3,W1) + 18 – 12 + 16 -14=8
 (F3, W1) (F3, W1) → (F3, W3) → (F1, W3) → (F1, W1) + 26 – 16 + 12
-16=6

(F3, W2) (F3, W2) → (F3, W3) → (F1, W3) → (F1, W1) + 24 – 16 + 12 – 16

→ (F2,W1) → (F2, W2) +14 – 8 = 10

Since, none of the unoccupied cells in the above table is associated with a
negative value, the total transportation costs will either remain the same or
increase if a shift of the unit is made to any one of the unoccupied cells. Hence,
the preceding table provides an optimum plan as follows:

F1 : x11 = 140, x12 = 0, x13 = 60 ; F2 : x21 = 40, x22 =120, x23 = 0

F3 : x31 = 0, x32 = 0, x33 = 90

With total transportation cost = Rs. 5,920