EM 543:

Production and Operations Management

 

Unit 2:
Lecture 4: Transportation & Assignment Models
 4.1 The Transportation Model

 The transportation problem is represented by the network

in Fig.4.1. There are m sources and n destinations, each
represented by a node.
 The arcs represent the routes linking the sources and the
destinations. Arc (i, j) joining source i to destination j
carries two pieces of information:
- the transportation cost per unit, cij, and
- the amount shipped, xij.
 The amount of supply at source i is ai, and the amount of
demand at destination j is bj.
 The objective of the model is to minimize the total
transportation cost while satisfying all the supply and
demand restrictions
Fig. 4.1 Transportation model with nodes and arcs
Steps of the Transportation Algorithm
o The basic steps of the transportation algorithm are exactly
those of the simplex method. However, instead of using the
regular simplex tableau, we take advantage of the special
structure of the transportation model to carry out the
algorithmic computations more conveniently.
Step 1. Determine a starting basic feasible solution, and go to
step 2.
Step 2. Use the optimality condition of the simplex method to
determine the entering variable from among all the
nonbasic variables. If the optimality condition is
satisfied, stop. Otherwise, go to step 3.
Step 3. Use the feasibility condition of the simplex method to
determine the leaving variable from among all the
current basic variables, and find the new basic solution.
Return to step 2.
Example 4.1
Sempika Auto has three plants in Kitwe, Mpika and Nakonde
and two major distribution centers in Lusaka and Livingstone.
The quarterly capacities of the three plants are 1000, 1500, and
1200 cars, and the demands at the two distribution centers for
the same period are 2300 and 1400 cars. The kilometer chart
between the plants and the distribution centers is given in Table
4.1.
The trucking company in charge of transporting the cars
charges 8 ngwee per kilometre per car. Thus, the transportation
costs per car on the different routes, rounded to the closest
kwacha, are computed from Table 4.1 as shown in Table 4.2.
  The LP model of the problem is:
  Minimise

Subject to:
  = 1000 (Kitwe)

= 2300 (Lusaka)
= 1400 (Livingstone)

All the constraints are equations because the total supply

(= 1000 + 1500 + 1200 = 3700 cars) equals the total demand (=
2300 + 1400 = 3700 cars).
 The special structure of the transportation problem allows a
compact representation of the problem using the
transportation tableau format in Table 4.3.
 This format is convenient for modeling many situations that
do not deal with transporting goods.
 The optimal solution in Figure 4.2 ships:
- 1000 cars from Kitwe to Lusaka (x11 = 1000),
- 1300 from Mpika to Lusaka (x21 = 1300),
- 200 from Mpika to Livingstone (x22 = 200), and
- 1200 from Nakonde to Livingstone (x32 = 1200).

 The associated minimum transportation cost is computed as:

(1000 * K80) + (1300 * K100) + (200 * K108) + (1200 *K68)
= K313, 200.
Fig. 4.2 Optimal solution of Sempika Auto model
4.2 Balancing the transportation model.
 The transportation tableau representation assumes that
model is balanced, meaning that the total demand equals the
total supply.
 If the model is unbalanced, a dummy source or a dummy
destination must be added to restore balance.

Example 4.2
In the Sempika Auto model, suppose that the Mpika plant
capacity is 1300 cars (instead of 1500). The total supply (=
3500 cars) is less than the total demand (= 3700 cars), meaning
that part of the demand at Lusaka and Livingstone will not be
satisfied.
Because the demand exceeds the supply, a dummy plant
(source) with a capacity of 200 cars (= 3700 – 3500) is added to
balance the model. The unit transportation cost from the
dummy plant to the two destinations is zero because the plant
does not exist.
 Table 4.4 gives the balanced model together with its
optimum solution. The solution shows that the dummy plant
ships 200 cars to Livingstone, which means that Livingstone
will be 200 cars short of satisfying its demand of 1400 cars.
 A specific destination will not experience shortage by
assigning a very high unit transportation cost from the
dummy source to that destination.
 For example, a penalty of $1000 in the dummy-Livingstone
cell will prevent shortage at Livingstone. Shortage must take
place somewhere.
 The case where the supply exceeds the demand can be
demonstrated by assuming that the demand at Lusaka is
1900 cars only. In this case, we need to add a dummy
distribution center to “receive” the surplus supply.
 Here, the unit transportation cost to the dummy distribution
center is zero.
 Table 4.5 gives the new model with optimal solution. It
shows that Mpika plant will have a surplus of 400 cars.
Non Traditional Transportation Models
 The transportation model can be applied to production-
inventory control and other services.
Class Exercise
Cars are shipped from three distribution centers to five dealers.
The shipping cost is based on the mileage between the sources
and the destinations and is independent of whether the truck
makes the trip with partial or full loads. Table 4.6 summarizes
the mileage between the distribution centers and the dealers
together with the monthly supply and demand figures given in
number of cars. A full truckload includes 18 cars.
The transportation cost per truck mile is $25.

Carry out the following:

(i) Formulate the associated transportation model.
(ii) Determine the optimal shipping schedule.
4.2 The Assignment Model
 The assignment model deals with matching workers (with
varying skills) to jobs. Presumably, skill variation affects the
cost of completing a job.
 The goal is to determine the minimum cost assignment of
workers to jobs.
 The general assignment model with n workers and n jobs is
represented in Table 4.6. The element cij represents the cost
of assigning worker i to job j (i, j = 1, 2,……n).
 There is no loss of generality in assuming that the number of
workers and the number of jobs are equal, because we can
always add fictitious workers or fictitious jobs to satisfy this
assumption.
 The assignment model is a special case of the transportation
model where workers represent sources and jobs represent
destinations. The supply (demand) amount at each source
(destination) exactly equals 1.
 The cost of “transporting” worker i to job j is cij. In effect,
the assignment model can be solved directly as a regular
transportation model (or as a regular LP).
 Nevertheless, the fact that all the supply and demand
amounts equal 1 has led to the development of a simple
solution algorithm called the hungarian method, which is
rooted in the simplex method, just as the transportation
model is.

Example 4.3
Joe Klyne’s three children, John, Karen, and Terri, want to earn
some money for personal expenses. Mr. Klyne has chosen three
chores for his children: mowing the lawn, painting the garage
door, and washing the family cars. To avoid anticipated sibling
competition, he asks them to submit individual (secret) bids for
what they feel is fair pay for each of the three chores. Table 4.7
summarizes the bids received. The children will abide by their
father’s decision regarding the assignment of chores.
The assignment problem will be solved by the Hungarian
method.

Step 1. Determine pi, the minimum cost element of row i in

the original cost matrix, and subtract it from all the
elements of row i, i = 1, 2, 3.
Step 2. For the matrix created in step 1, determine qj, the
minimum cost element of column j, and subtract it
from all the elements of column j, j = 1, 2, 3.
Step 3. From the matrix in step 2, attempt to find a feasible
assignment among all the resulting zero entries.
3a. If such an assignment can be found, it is optimal.
3b. Else, additional calculations are needed.

Table 4.8 shows the application of the three steps to the current
problem. The cells with underscored zero entries in step 3
provide the (feasible) optimum solution:
 John gets the paint job, Karen gets to mow the lawn, and
Terri gets to wash the family cars.
 The total cost to Mr. Klyne is 9 + 10 + 8 = $27. This amount
also will always equal
(p1 + p2 + p3) + (q1 + q2 + q3) = (9 + 9 + 8) + (0 + 1 + 0)
= $27.
As stated in step 3 of the Hungarian method, the zeros created
by steps 1 and 2 may not yield a feasible solution directly. In
this case, further steps are needed to find the optimal (feasible)
assignment.
Example 4.4
Suppose that the situation discussed in Example 4.3 is extended
to four children and four chores. Table 4.9 summarizes the cost
elements of the problem.
 The application of steps 1 and 2 to the matrix in Table 4.9
(using p1 = 1, p2 = 7, p3 = 4, p4 = 5, q1 = 0, q2 = 0, q3 = 3, and
q4 = 0) yields the reduced matrix in Table 4.10 (verify!):

The locations of the zero entries do not allow assigning unique

chores to all the children. For example, if we assign child 1 to
chore 1, then column 1 will be eliminated, and child 3 will not
have a zero entry in the remaining three columns. This obstacle
can be accounted for by adding the following step to the
procedure given in Example 4.3:
Step 3b. If no feasible zero-element assignments can be
found,
(i) Draw the minimum number of horizontal and
vertical lines in the last reduced matrix to cover all
the zero entries.
(ii) Select the smallest uncovered entry, subtract it from

every uncovered entry, and then add it to every

entry at the intersection of two lines.
(iii) If no feasible assignment can be found among the
 The application of step 3b to the last matrix produces the
shaded cells in Table 4.11.
 The smallest unshaded entry (shown underscored) equals 1.
This entry is added to the intersection cells and subtracted
from the remaining shaded cells to produce the matrix in
Table 4.12, and the optimal solution shown by underscored
zeros.
Simplex Explanation of the hungarian Method
 The assignment problem in which n workers are assigned to
n jobs can be represented as an LP model in the following
manner: Let cij be the cost of assigning worker i to job j,
and define

Then the LP model is given as:

subject to:
 The optimal solution of the preceding LP model remains
unchanged if a constant is added to or subtracted from any
row or column of the cost matrix (cij).
 To prove this point, let pi and qj be constants subtracted from
row i and column j. Thus, the cost element cij is changed to:

Now,
 Because the new objective function differs from the original
by a constant, the optimum values of xij are the same in both
cases.
 The development shows that steps1 and 2 of the Hungarian
method, which call for subtracting pi from row i and then
subtracting qj from column j, produce an equivalent
assignment model.
 A feasible solution can be found among the zero entries of
the cost matrix created by steps 1 and 2, then it must be
optimum (because the cost in the modified matrix cannot be
less than zero).
 If the created zero entries cannot yield a feasible solution,
then step 2a (dealing with the covering of the zero entries)
must be applied.
 The validity of this procedure is again rooted in the simplex
method of linear programming and can be explained by
duality theory and the complementary slackness theorem.
o The reason (p1 + p2 + ….. + pn) + (q1 + q2 +….. + qn) gives
the optimal objective value is that it represents the dual
objective function of the assignment model.
o This result can be seen through comparison with the dual
objective function of the transportation model.
Class Exercise
JoShop needs to assign four jobs to four workers. The cost of
performing a job is a function of the skills of the workers. Table
4.13 summarizes the cost of the assignments.

Worker 1 cannot do job 3, and worker 3 cannot do job 4.

Determine the optimal assignment using the Hungarian
method.
References:

 Hillier, F.S. and G.J. Liebermann, (2001),

Introduction to Operations Research, 7th Edition,
McGraw Hill.

 Carter, M.W., Price, C.C. and Rabadi, G., (2019),

Operations Research: A Practical Introduction,
2nd Edition, Taylor & Francis Group.
 Assignment 2 ( Hillier & Liebermann, 2001; Pg393)
The Versatech Corporation has decided to produce three new
products. Five branch plants now have excess product capacity.
The unit manufacturing cost of the first product would be $31,
$29, $32, $28, and $29 in Plants 1, 2, 3, 4, and 5, respectively.
The unit manufacturing cost of the second product would be
$45, $41, $46, $42, and $43 in Plants 1, 2, 3, 4, and 5,
respectively. The unit manufacturing cost of the third product
would be $38, $35, and $40 in Plants 1, 2, and 3, respectively,
whereas Plants 4 and 5 do not have the capability for producing
this product.

Sales forecasts indicate that 600, 1,000, and 800 units of

products 1, 2, and 3, respectively, should be produced per day.
Plants 1, 2, 3, 4, and 5 have the capacity to produce 400, 600,
400, 600, and 1,000 units daily, respectively, regardless of the
product or combination of products involved.
Assume that any plant having the capability and capacity to
produce them can produce any combination of the products in
any quantity.

Management wishes to know how to allocate the new products

to the plants to minimize total manufacturing cost.
(a) Formulate this problem as a transportation problem by
constructing the appropriate parameter table.
(b) Obtain an optimal solution.
[ 30 Marks ]

Due date: 12th February, 2021