Transportation and

Assignment Problem
Sessions 11-14
Transportation and Assignment
Problems
 Transportation and assignment problems tend to require a very
large number of functional constraints and decision variables, so
use of the simplex method may require an exorbitant
computational effort.
 However, a key characteristic of these problems is that most of the
𝑎𝑖𝑗 coefficients in the functional constraints are zeros, and the
relatively few nonzero coefficients appear in a distinctive pattern.
 As a result, it has been possible to develop special streamlined
algorithms that achieve dramatic computational savings by
exploiting this special structure of the problem.
Transportation Problem
Transportation Problem

 The distribution of goods produced by a company from various

warehouses (or sources) to different markets (or other destinations)
where they are required causes problems to almost every business.
 The transportation method deals with such problems of
transportation of goods from different sources to different
destinations, given relevant data like available quantities at various
sources, demand at each destination, the cost of shipping along
each route, etc.
 While such problems can also be handled as linear programming
problems; the transportation method provides an efficient means to
solve them.
Transportation Method

 The transportation method answers the following questions

 What is the optimal way of shipping goods from various sources
(warehouses) to different markets so as to minimize the total cost
involved in the shipping?
 How would the optimal shipping schedule change if some routes
become cheaper/costlier?
 If an item can be produced at different locations at varying costs and
sold in different markets at different prices, then what production and
shipping plan will yield maximum profit?
A typical transportation problem

 Suppose that a manufacturer of washing machines has three plants,

located at places called A, B, and C. Also, suppose that the customers for
these products are located in regions named X, Y, and Z, where these
goods need to be supplied.
 Suppose that the demand in each region and the production at each
plant per unit time period is known and equal in aggregate, and further the
cost of transporting one washing machine from each plant to each of the
requirement center is given and constant.
 The manufacturer’s problem is to determine how the products should be
routed from the plants to the market places so that the total cost involved
in transportation is minimized.
A typical transportation problem

Sources/ Destinations
Origins
Source: Vohra (2017: 216)
Problem Statement

 The classical transportation problem can be stated mathematically as

follows:
 𝑎𝑖 = 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑎𝑡 𝑜𝑟𝑔𝑖𝑛 𝑖
 𝑏𝑗 = 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑎𝑡 𝑑𝑒𝑠𝑡𝑖𝑛𝑎𝑡𝑖𝑜𝑛 𝑗
 𝑐𝑖𝑗 = 𝑡ℎ𝑒 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑡𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑜𝑛𝑒 𝑢𝑛𝑖𝑡 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑓𝑟𝑜𝑚 𝑜𝑟𝑖𝑔𝑖𝑛 𝑖 𝑡𝑜 𝑑𝑒𝑠𝑡𝑖𝑛𝑎𝑡𝑖𝑜𝑛 𝑗
 𝑥𝑖𝑗 = 𝑡ℎ𝑒 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑡𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡𝑒𝑑 𝑓𝑟𝑜𝑚 𝑜𝑟𝑖𝑔𝑖𝑛 𝑖 𝑡𝑜 𝑑𝑒𝑠𝑡𝑖𝑛𝑎𝑡𝑖𝑜𝑛 𝑗
 The problem is stated as (under the assumption that σ𝑚 𝑛
𝑖=1 𝑎𝑖 = σ𝑗=1 𝑏𝑗
 Minimize Total cost Z = σ𝑚 𝑛
𝑖=1 σ𝑗=1 𝑐𝑖𝑗 𝑥𝑖𝑗

 Subject to:
 σ𝑛𝑗=1 𝑥𝑖𝑗 = 𝑎𝑖 𝑖 = 1,2, … , 𝑚
 σ𝑚
1=1 𝑥𝑖𝑗 = 𝑏𝑗 𝑗 = 1,2, … , 𝑛
 𝑥𝑖𝑗 ≥ 0
Transportation Tableau
Solving a transportation problem

 The solution to the transportation problem calls for determining values of

𝑥𝑖𝑗 ‘s as would yield the minimum aggregate transportation cost.
 When a problem is solved, some of the 𝑥𝑖𝑗 ‘s would assume positive values
indicating utilized routes. The cells containing such values are called
occupied or filled cells and each of them represents the presence of a
basic variable.
 For the remaining cells, called the empty cells, 𝑥𝑖𝑗 ‘s would be zero. These
are the routes not utilized by the transportation pattern and their
corresponding variables (𝑥𝑖𝑗 ‘s) are regarded to be non-basic.
 Transportation costs are assumed to be linear in nature.
 It is also assumed that the aggregate supply at the sources (σ 𝑎𝑖 ) is equal to
the aggregate demand at the destinations (σ 𝑏𝑗 )
Solving a transportation problem

 The number of constraints in a transportation problem is m + n.

 The number of variables required for forming a basis is one less, i.e., m + n -
1. With the values of any m + n – 1 independent variables being given, the
remaining would automatically be determined on the basis of those values.
 Also, considering the conditions of feasibility and non-negativity, the
number of basic variables representing transportation routes that are
utilized equals m + n – 1, and all other variables be non-basic, or zero,
representing the unutilized routes.
Formulating a transportation problem
as a LPP - Example 1
 A company has manufacturing plants at places A, B, and C with daily
output of 500, 300, and 200 units of an item, respectively. It has warehouses
at places P, Q, R, and S, with daily requirements of 180, 150, 350, and 320
units, respectively. Per unit shipping costs on different routes are given
below:
From/ To P Q R S
A 12 10 12 13
B 7 11 8 14
C 6 16 11 7

 The company wants to send the output from various plants to the
warehouses to minimize the transportation cost. Formulate the problem as
a LPP.
Formulating a transportation problem
as a LPP
 Transportation tableau

 Let 𝑥𝑖𝑗 be the number of units shipped from plant i to warehouse j. The
problem can be stated as:
 Minimize Z = 12 𝑥11 +10 𝑥12 +12 𝑥13 +13 𝑥14 +7 𝑥21 +11 𝑥22 +8 𝑥23 +14 𝑥24 +6 𝑥31 +16
𝑥32 +11 𝑥33 +7 𝑥34
Formulating a transportation problem
as a LPP
 Subject to:

}
 𝑥11 + 𝑥12 + 𝑥13 + 𝑥14 = 500
Supply constraints
 𝑥21 + 𝑥22 + 𝑥23 + 𝑥24 = 300
 𝑥31 + 𝑥32 + 𝑥33 + 𝑥34 = 200

}
 𝑥11 + 𝑥21 + 𝑥31 = 180
 𝑥12 + 𝑥22 + 𝑥32 = 150
Demand constraints
 𝑥13 + 𝑥23 + 𝑥33 = 350
 𝑥14 + 𝑥24 + 𝑥34 = 320
 𝑥𝑖𝑗 ≥ 0 for 𝑖 = 1,2, … , 𝑚 and 𝑗 = 1,2, … , 𝑛
Steps involved in solving a
transportation problem
 Obtain an initial solution, i.e., make an initial assignment in such a way that
an initial basic feasible solution is obtained.
 Ascertain whether it is optimal or not, by determining the opportunity costs
associated with the empty cells. If the solution is optimal, then exit, and if
not optimal, proceed to step 3.
 Revise the solution until an optimal solution is reached.
Exercise 1

 A company has three production facilities S1, S2 and S3 with production

capacity of 7, 9 and 18 units (in 100s) per week of a product, respectively.
These units are to be shipped to four warehouses D1, D2, D3 and D4 with
requirement of 5, 6, 7 and 16 units (in 100s) per week, respectively. The
transportation costs (in rupees) per unit between factories to warehouses
are given in the table below:

From/ To D1 D2 D3 D4
S1 19 30 50 10
S2 70 30 40 60
S3 40 8 70 20
 Formulate this transportation problem as an LPP to minimize the total
transportation cost
Step 1: Finding an initial feasible
solution
 North-West Corner Rule
 Least cost method
 Vogel’s Approximation Method
Exercise 2

 Determine an initial basic feasible solution to the following

transportation problem by using (a) NWCM, (b) LCM, and (c) VAM.
Step 2: Testing the Optimality

 After obtaining the initial basic feasible solution, the next step is to test
whether it is optimal or not.
 There are two methods for testing the optimality of a basic feasible solution.
 Stepping-stone method
 Modified distribution method (MODI)
 Both methods can be used only when the solution is a basic feasible
solution, so that it has m + n – 1 basic variables
Step 3: Improving the solution

 By applying either of the methods, if the solution is found to be optimal then

the process terminates as the problem is solved.

 If the solution is not seen to be optimal, then a revised and improved basis
feasible solution is obtained. This is done by exchanging a non-basic
variable for a basic variable. In simple terms, rearrangement is made by
transferring units from an occupied cell to an empty cell that has the
largest opportunity costs, and then adjusting the units in other related cells
in a way that all the rim requirements are satisfied.

 The solution so obtained is again tested for optimality (step 2) and revised, if
necessary. We continue this until an optimal solution is finally obtained.
Testing the Optimality

 Stepping-stone method
 The optimality test is applied by calculating the opportunity cost of each and
every empty cell
 Modified Distribution method (MODI)
 More efficient that the Stepping-stone method
 Based on the concept of dual variables that are used to evaluate the empty
cells
 Using these dual variables the opportunity cost of each empty cell is determined.
 Both the methods can be used only when the solution is a initial basic
solution, so that it has m + n - 1 basic variables.
Stepping-stone method

 To determine the potential of improving upon each of the non-basic

variable (empty cell), each cell is considered one by one.
 For each such cell, we find what effect on the total cost would be if one
unit is assigned to this cell.
 With this information, we come to know whether the solution is optimal or
not.
 Select an empty cell and assume one unit is moved through that cell. By
doing so, adjustments have to be made in other occupied cells.
 The adjustments can therefore be made by forming a closed loop
Stepping-stone method

 Initial basic solution for Example 1, using NWCR

Stepping-stone method
 Cell AS forms a closed loop with AR, BR, and BS.
 A unit in AS can be assigned by diverting one unit from AR. This would
require adding one unit to BR (to maintain column total). Similarly to
maintain row total, one unit has to be reduced from BS.
 The impact of sending 1 unit via AS, the changes in costs can be written as
+13(AS) – 12(AR) + 8(BR) – 14(BS) = – 5
 This indicates that by using route AS, the cost per unit can be reduced by ₹ 5.
 The opportunity cost for this route is therefore ₹ 5
 Opportunity costs for other cells:
Drawing a closed loops

 For drawing a closed loop, begin with an empty cell and move alternately
horizontally and vertically, through occupied cells only, until reaching back
to the starting point.
• An even number of at least four cells must participate in a closed loop and an
occupied cell can be considered only once and not more.
• If there exists a basic feasible solution with m + n – 1 possible variables, then there
would be one and only one closed loop for each cell. This is irrespective of the
size of the matrix given.
• All cells that receive a plus or a minus sign, except the starting empty cell, must
be the occupied cell.
• Closed loops may or may not be square or rectangular in shape.
• Movement on the path set by the loop is generally clockwise. However, if the
progression on the path is anticlockwise, it would not affect the result.
Modified Distribution Method (MODI)

 Step 1:

 Add to the transportation tableau a column on the RHS titled 𝑢𝑖 and a row in the
bottom of it labelled 𝑣𝑗 . The objective is to obtain a value for each row and
column.

 Step 2:

 Calculate the 𝑢𝑖 and 𝑣𝑗 values with the help of occupied cells only. For this,
assign a value arbitrarily to a row or column variable 𝑢𝑖 or 𝑣𝑗 . The value may be
positive, negative or zero. Generally, a zero is assigned to the first row, i.e., 𝑢1 = 0

 After assigning initial value, consider the row (column) to which this is assigned,
select an occupied cell in it and place in corresponding column (row) a value
such that the row and column value adds up to the cost element of the cell (𝑢𝑖 +
𝑣𝑗 = 𝑐𝑖𝑗 ). Repeat the process for any other occupied cell.
Modified Distribution Method (MODI)

 Step 3

 Having determined all 𝑢𝑖 and 𝑣𝑗 values, calculate for each unoccupied cell ∆𝑖𝑗 = 𝑢𝑖 + 𝑣𝑗 − 𝑐𝑖𝑗 .
The ∆𝑖𝑗 ’s represent the opportunity costs of various cells.

 After obtaining the opportunity costs, proceed in the same way as in the stepping-stone
method.

 If all the empty cells have negative opportunity cost, the solution is optimal and unique.
Modified Distribution Method (MODI)

∆14 = 0 + 18 − 13 = 5
∆21 = −4 + 12 − 7 = 1

∆22 = −4 + 10 − 11 = −5
∆31 = −11 + 12 − 6 = −5
∆32 = −11 + 10 − 16 = −17
∆33 = −11 + 12 − 11 = −10
Exercise 3

 A cement company has three factories which manufacture cement which is then
transported to four distribution centers. The quantity of monthly production of each
factory, the demand of each distribution center and the associated transportation
cost per quintal are given as follows:

 Suggest the optimal transportation schedule

Exercise 4

 A manufacturer has distribution centres at Agra, Allahabad and Kolkata.

These centres have availability of 40, 20 and 40 units of his product,
respectively. His retail outlets at A, B, C, D and E require 25, 10, 20, 30 and 15
units of the products, respectively. The transport cost (in rupees) per unit
between each centre outlet is given below:

 Determine the optimal distribution so as to minimize the cost of distribution.

Exercise 5

 A steel company is concerned with the problem of distributing imported ore from
three ports to four steel mills. The supplies of ore arriving at the ports are:
Port P Q R
Tonnes per week 20,000 38,000 16,000

 The demand at the steel mills is as follows:

Steel Mills A B C D
Tonnes per week 10,000 18,000 22,000 24,000

 The transportation cost is Re 0.1 per tonne per km. The distance between the ports
and the steel mills is as given below:

 Determine the optimal distribution so as to minimize the cost of distribution.

Exercise 6
 A dairy firm has three plants located in a state. The daily milk production at
each plant is as follows:
 Plant 1 : 6 million litres, Plant 2 : 1 million litres, and Plant 3 : 10 million litres
 Each day, the firm must fulfil the needs of its four distribution centers. The
minimum requirement of each centre is as follows:
 Distribution centre 1 : 7 million litres, Distribution centre 2 : 5 million litres,
 Distribution centre 3 : 3 million litres, and Distribution centre 4 : 2 million litres
 Cost (in hundreds of rupees) of shipping one million liter from each plant to
each distribution center is given in the following table:

 Find the initial basic solution using the 3 methods

Assignment Problem
Assignment problem

 In every workplace, there are jobs to be done and there are people
available to do them. But everyone is not equally efficient at every job.
Someone may be more efficient on one and less efficient on the other job.
 The relative efficiency is reflected in terms of the time taken for, or the cost
associated with, performance of different jobs by different people.
 An obvious problem for a manager to handle is to assign jobs to various
workers in a manner that they can be done in the most efficient way.
 Interestingly, such problems can be formulated as linear programming
problems or as transportation problems and solved as such, but a method,
called Hungarian Assignment Method provides an easy route.
Typical example of an assignment
problem
 A production supervisor is considering how he should assign the four
jobs that are to be performed by four of the workers. He wants to
assign the jobs to the workers such that the aggregate time to
perform the jobs is least. Based on previous experience, he has the
information on the time taken by the four workers in performing
these jobs, as given in the Table below:

Job
Worker A B C D
1 45 40 51 67
2 57 42 63 55
3 49 52 48 64
4 41 45 60 55
Solving an assignment problem using the
Hungarian Assignment Method (HAM)

 This method is based on the concept of opportunity cost

 It uses a fact that if we add or subtract any constant from every element of
a cost table, the given problem does not change and remains essentially
the same
 The method entails converting the original cost table into a series of
equivalent cost tables, called Reduced Cost Tables or Opportunity Cost
Tables, consisting of only zeros and positive values. This is done until an
optimal solution is obtained.
 The optimal solution that is derived only with the help of zeros from a
reduced cost table is also the optimal solution to the original problem.
Hungarian Assignment Method

 Step 1: Locate the smallest cost element in each row of the cost table. Now
subtract this smallest element from each element in that row. As a result, there
shall be at least one zero in each row of this table called the Reduced Cost
Table.

 Step 2: In the reduced cost table obtained, consider each column and locate
the smallest element in it. Subtract the smallest value from every other entry in
the column. As a consequence of this action, there would be at least one zero
in each of the rows and columns of the second reduced cost table.

 Step 3: Draw the minimum number of horizontal and vertical lines (not diagonal
ones) that are required to cover all the ‘zero’ elements. If the number of lines
drawn is equal to n (the number of rows/ columns) the solution is optimal, and
proceed to step 6. If the number of lines drawn is less than n, go to step 4.
Hungarian Assignment Method

 Step 4: If the number of lines covering all zeros is smaller than n, it has to
implication that the number of zeros and their locations do not permit us to
obtain the optimal solution. Thus, there is need to create more zeros. For
this, select the smallest uncovered (by lines) cost element. Subtract this
element from all uncovered elements including itself and add this element
to each value located at the interaction of any two lines. The cost
elements through which only one line passes remain unaltered.

 Step 5: Repeat steps 3 and 4 until an optimal solution is obtained.

Hungarian Assignment Method
 Step 6: Given the optimal solution, make the job assignments as indicated by
the ‘zero’ elements. This is done as follows:

a. Locate a row which contains only one ‘zero’ element. Assign the job corresponding
to this element to its corresponding person. Cross out the zeros, if any, in the column
corresponding to the element, which is indicative of the fact that the particular job
and person are no more available.

b. Repeat (a) for each of such rows which contain only one zero. Similarly, perform the
same operation in respect of each column containing only one ‘zero’ element,
crossing out the zero(s), if any, in the row in which the element lies.
c. If there is no row or column with only a single ‘zero’ element left, then select a row/
column arbitrarily and choose one of the jobs (or persons) and make the assignment.
Now cross the remaining zeros in the column and row in respect of which the
assignment is made.
d. Repeat steps (a) through (c) until all assignments are made.
e. Determine the total cost with reference to the original cost table.
Example 2

 Solve the following assignment problem using the Hungarian Assignment

Method. The figures in the table indicate the time taken by each operator
to perform each of the jobs

Job
Worker A B C D
1 45 40 51 67
2 57 42 63 55
3 49 52 48 64
4 41 45 60 55
Solution to Example 2

 Step 1: The minimum value of each row is subtracted from all elements in
the row. It is shown in the reduced cost table, also called Opportunity Cost
Table

Job
Worker A B C D
1 5 0 11 27
2 15 0 21 13
3 1 4 0 16
4 0 4 19 14
Solution to Example 2

 Step 2: For each column of this table, the minimum value is subtracted from
all the other values. Obviously, the columns that contain a zero would
remain unaffected by this operation. Here only the fourth column values
would change.

Job
Worker A B C D
1 5 0 11 14
2 15 0 21 0
3 1 4 0 3
4 0 4 19 1
Solution to Example 2

 Step 3: Draw the minimum number of lines covering all zeros. As a general
rule, we should first cover those rows/ columns which contain a larger
number of zeros.

Job
Worker A B C D
1 5 0 11 14
2 15 0 21 0
3 1 4 0 3
4 0 4 19 1
Solution to Example 2

 Step 4: Since the number of lines drawn is equal to 4(=n), the optimal
solution is obtained. The assignments are made after scanning the rows
and columns for unit zeros.

Job
Worker A B C D
1 5 0 11 14
2 15 0 21 0
3 1 4 0 3
4 0 4 19 1
 The final pattern of assignments is 1-B, 2-D, 3-C, and 4-A, involving a total
time of 40 + 55 + 48 + 41 = 184 minutes
Exercise 7

 Using the following cost matrix, determine (a) the optimal job assignments
and (b) the cost of assignments

Job
Machinist 1 2 3 4 5
A 10 3 3 2 8
B 9 7 8 2 7
C 7 5 6 2 4
D 3 5 8 2 4
E 9 10 9 6 10
Exercise 8
 A computer centre has three expert programmers. The centre wants three
application programs to be developed. The head of the computer centre,
after carefully studying the programs to be developed, estimates the
computer time in minutes required by the experts for the application
programs as follows:

 Assign the programmers to the programs in such a way that the total
computer time is minimum.
Exercise 9

 A department of a company has five employees with five jobs to be

performed. The time (in hours) that each man takes to perform each job is
given in the effectiveness matrix.

 How should the jobs be allocated, one per employee, so as to minimize the
total man-hours?