Chapter 3: Transportation Problem and Assignment problem

Transportation Problem and Assignment problem

Transportation problem is a special kind of Linear Programming Problem (LPP) in which

goods are transported from a set of sources to a set of destinations subject to the supply and demand
of the sources and destination respectively such that the total cost of transportation is minimized. It is
also sometimes called as Hitchcock problem.

Types of Transportation problems:

Balanced: When both supplies and demands are equal then the problem is said to be a balanced
transportation problem.
Unbalanced: When the supply and demand are not equal then it is said to be an unbalanced
transportation problem. In this type of problem, either a dummy row or a dummy column is added
according to the requirement to make it a balanced problem. Then it can be solved similar to the
balanced problem.

Methods to Solve:
To find the initial basic feasible solution there are three methods:
1. NorthWest Corner Cell Method.
2. Least Call Cell Method.
3. Vogel’s Approximation Method (VAM).
Basic structure of transportation problem:

In the above table D1, D2, D3 and D4 are the destinations where the products/goods are to be
delivered from different sources S1, S2, S3 and S4. Si is the supply from the source Oi. dj is the
demand of the destination Dj. Cij is the cost when the product is delivered from source Si to
destination Dj.

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 Chapter 3: Transportation Problem and Assignment problem

a) Transportation Problem : (NorthWest Corner Method)

An introduction to Transportation problem has been discussed in the previous Section, in this,
finding the initial basic feasible solution using the NorthWest Corner Cell Method will be discussed.

Explanation: Given three sources O1, O2 and O3 and four destinations D1, D2, D3 and D4. For the
sources O1, O2 and O3, the supply is 300, 400 and 500 respectively.
The destinations D1, D2, D3 and D4 have demands 250, 350, 400 and 200 respectively.
Solution: According to North West Corner method, (O1, D1) has to be the starting point i.e. the
north-west corner of the table. Each and every value in the cell is considered as the cost per
transportation. Compare the demand for column D1 and supply from the source O1 and allocate the
minimum of two to the cell (O1, D1) as shown in the figure.

The demand for Column D1 is completed so the entire column D1 will be canceled. The supply from
the source O1 remains 300 – 250 = 50.

Now from the remaining table i.e. excluding column D1, check the north-west corner i.e. (O1,
D2) and allocate the minimum among the supply for the respective column and the rows. The supply
from O1 is 50 which is less than the demand for D2 (i.e. 350), so allocate 50 to the cell (O1, D2).

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 Chapter 3: Transportation Problem and Assignment problem

Since the supply from row O1 is completed cancel the row O1. The demand for
column D2 remain 350 – 50 = 50.

From the remaining table the north-west corner cell is (O2, D2). The minimum among the supply
from source O2 (i.e 400) and demand for column D2 (i.e 300) is 300, so allocate 300 to the cell (O2,
D2). The demand for the column D2 is completed so cancel the column and the remaining supply
from source O2 is 400 – 300 = 100.

Now from remaining table find the north-west corner i.e. (O2, D3) and compare the O2supply (i.e.
100) and the demand for D2 (i.e. 400) and allocate the smaller (i.e. 100) to the cell (O2, D2). The
supply from O2 is completed so cancel the row O2. The remaining demand for
column D3 remains 400 – 100 = 300.

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 Chapter 3: Transportation Problem and Assignment problem

Proceeding in the same way, the final values of the cells will be:

Note: In the last remaining cell the demand for the respective columns and rows are equal which was
cell (O3, D4). In this case, the supply from O3 and the demand for D4 was 200which was allocated
to this cell. At last, nothing remained for any row or column.

Now just multiply the allocated value with the respective cell value (i.e. the cost) and add all of them
to get the basic solution i.e. (250 * 3) + (50 * 1) + (300 * 6) + (100 * 5) + (300 * 3) + (200 * 2) =
4400

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 Chapter 3: Transportation Problem and Assignment problem

b) Transportation Problem: (Least Cost Cell Method)

The North-West Corner method has been discussed in the previous session. In this session,
the Least Cost Cell method will be discussed.

Solution: According to the Least Cost Cell method, the least cost among all the cells in the table has
to be found which is 1 (i.e. cell (O1, D2)).

Now check the supply from the row O1 and demand for column D2 and allocate the smaller value to
the cell. The smaller value is 300 so allocate this to the cell. The supply from O1 is completed so
cancel this row and the remaining demand for the column D2 is 350 – 300 = 50.

Now find the cell with the least cost among the remaining cells. There are two cells with the least
cost i.e. (O2, D1) and (O3, D4) with cost 2. Lets select (O2, D1). Now find the demand and supply
for the respective cell and allocate the minimum among them to the cell and cancel the row or
column whose supply or demand becomes 0 after allocation.

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 Chapter 3: Transportation Problem and Assignment problem

Now the cell with the least cost is (O3, D4) with cost 2. Allocate this cell with 200 as the demand is
smaller than the supply. So the column gets canceled.

There are two cells among the unallocated cells that have the least cost. Choose any at random
say (O3, D2). Allocate this cell with a minimum among the supply from the respective row and the
demand of the respective column. Cancel the row or column with zero value.

Now the cell with the least cost is (O3, D3). Allocate the minimum of supply and demand and cancel
the row or column with zero value.

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 Chapter 3: Transportation Problem and Assignment problem

The only remaining cell is (O2, D3) with cost 5 and its supply is 150 and demand is 150 i.e. demand
and supply both are equal. Allocate it to this cell.

Now just multiply the cost of the cell with their respective allocated values and add all of them to get
the basic solution i.e. (300 * 1) + (25 * 2) + (150 * 5) + (50 * 3) + (250 * 3) + (200 * 2) = 2400

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 Chapter 3: Transportation Problem and Assignment problem

c) Transportation Problem: (Vogel’s Approximation Method)

The North-West Corner method and the Least Cost Cell method has been discussed in the
previous session. In this session, the Vogel’s Approximation method will be discussed.

Solution:
• For each row find the least value and then the second least value and take the absolute difference
of these two least values and write it in the corresponding row difference as shown in the image
below. In row O1, 1 is the least value and 3 is the second least value and their absolute
difference is 2. Similarly, for row O2 and O3, the absolute differences are 3 and 1 respectively.
• For each column find the least value and then the second least value and take the absolute
difference of these two least values then write it in the corresponding column difference as
shown in the figure. In column D1, 2 is the least value and 3 is the second least value and their
absolute difference is 1. Similarly, for column D2, D3and D3, the absolute differences
are 2, 2 and 2 respectively.

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 Chapter 3: Transportation Problem and Assignment problem

• These value of row difference and column difference are also called as penalty. Now select the
maximum penalty. The maximum penalty is 3 i.e. row O2. Now find the cell with the least cost
in row O2 and allocate the minimum among the supply of the respective row and the demand of
the respective column. Demand is smaller than the supply so allocate the column’s demand
i.e. 250 to the cell. Then cancel the column D1.

• From the remaining cells, find out the row difference and column difference.

• Again select the maximum penalty which is 3 corresponding to row O1. The least-cost cell in
row O1 is (O1, D2) with cost 1. Allocate the minimum among supply and demand from the

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 Chapter 3: Transportation Problem and Assignment problem

respective row and column to the cell. Cancel the row or column with zero value.

• Now find the row difference and column difference from the remaining cells.

• Now select the maximum penalty which is 7 corresponding to column D4. The least cost cell in
column D4 is (O3, D4) with cost 2. The demand is smaller than the supply for cell (O3, D4).
Allocate 200 to the cell and cancel the column.

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 Chapter 3: Transportation Problem and Assignment problem

• Find the row difference and the column difference from the remaining cells.

• Now the maximum penalty is 3 corresponding to the column D2. The cell with the least value
in D2 is (O3, D2). Allocate the minimum of supply and demand and cancel the column.

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 Chapter 3: Transportation Problem and Assignment problem

• Now there is only one column so select the cell with the least cost and allocate the value.

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 Chapter 3: Transportation Problem and Assignment problem

• Now there is only one cell so allocate the remaining demand or supply to the cell

• No balance remains. So multiply the allocated value of the cells with their corresponding cell
cost and add all to get the final cost i.e. (300 * 1) + (250 * 2) + (50 * 3) + (250 * 3) + (200 * 2)
+ (150 * 5) = 2850

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 Chapter 3: Transportation Problem and Assignment problem

d) Transportation Problem: Unbalanced problem

In this session, the method to solve the unbalanced transportation problem will be discussed.
Below transportation problem is an unbalanced transportation problem.

The problem is unbalanced because the sum of all the supplies i.e. O1, O2, O3 and O4 is not equal
to the sum of all the demands i.e. D1, D2, D3, D4 and D5.
Solution:
In this type of problem, the concept of a dummy row or a dummy column will be used. As in this
case, since the supply is more than the demand so a dummy demand column will be added and a
demand of (total supply – total demand) will be given to that column i.e. 117 – 95 = 22 as shown in
the image below. If demand were more than the supply then a dummy supply row would have been
added.

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 Chapter 3: Transportation Problem and Assignment problem

Now that the problem has been updated to a balanced transportation problem, it can be solved using
any one of the following methods to solve a balanced transportation problem as discussed in the
earlier posts:
1. NorthWest Corner Method
2. Least Cost Cell Method
3. Vogel’s Approximation Method

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