CHAPTER SIX

Transportation and
Assignment Models
 PART I
TRANSPORTATION MODELS
 1.Introduction
Transportation model
• The transportation problem deals with the
distribution of goods from several points of supply
(sources) to a number of points of demand
(destinations)
• Usually we are given the capacity of goods at each
source and the requirements at each destination
• Typically the objective is to minimize total
transportation and production costs
 2. Setting Up a Transportation
• Problem
Production costs are the same at the factories so
the only
relevant costs are shipping from each source to each
destination
• Costs are constant no matter the quantity shipped

• The transportation problem can be described as

how to select the shipping routes to be used and the number

of goods to be shipped on each route so as to minimize
total transportation cost
 cont’d……
Example:

The Executive Furniture Corporation manufactures office desks

at three locations: Des Moines, Evansville, and Fort
Lauderdale.
The firm distributes the desks through regional warehouses
located in Boston, Albuquerque, and Cleveland.
Estimates of the monthly production capacity of each factory
and the desks needed at each warehouse are shown in Figure
next slide.
cont’d……
Example of a transportation problem in a network
format
Factories Warehouses
(Sources) (Destinations)

100 Units Des Moines Albuquerque 300 Units

300 Units Evansville Boston 200 Units

300 Units Fort Lauderdale Cleveland 200 Units

Cont’d…..
• The first step is setting up the
transportation table
• Its purpose is to summarize all the relevant data and
keep track of algorithm computations
Transportation costs per desk for Executive Furniture
TO
FROM ALBUQUERQUE BOSTON CLEVELAND

DES MOINES $5 $4 $3

EVANSVILLE $8 $4 $3

FORT LAUDERDALE $9 $7 $5
 Cont’d…..
Transportation table for Executive Furniture
Des Moines
capacity
constraint
TO WAREHOUSE WAREHOUSE WAREHOUS
AT AT E AT FACTORY
FROM ALBUQUERQUE CLEVELAND
BOSTON CAPACITY(su
pply)
DES MOINES $5 $4 $3
100

EVANSVILL $8 $4 $3
300
E

FORT LAUDERDALE $9 $7 $5
300

WAREHOUSE 300 200 200 700

REQUIREMENTS
(demand )

Total supply Cell representing a

Cost of shipping 1 unit from Cleveland and demand source-to-destination
Fort Lauderdale factory to warehouse (Evansville to Cleveland)
Boston warehouse demand shipping assignment
that could be mad13e3
 Cont’d…..
• In this table, total factory supply exactly equals total
warehouse demand
• When equal demand and supply occur,
a
balanced problem is said to exist
3. Developing an Initial Solution:
Once we have arranged the data in a table, we
must establish an initial feasible solution
Methods
1. Northwest Corner Rule (NCR)
2. Least cost method (LCM)
3. Vogel’s Approximation Method (VAM)
 1. Northwest Corner Rule (NCR)
• One systematic approach is known as the northwest corner rule

• Start in the upper left-hand cell and allocate units to shipping routes
as follows

1. Exhaust the supply (factory capacity) of each row before

moving down to the next row
2. Exhaust the demand (warehouse) requirements of each column
before moving to the right to the next column

3. Check that all supply and demand requirements are met.

• In this problem it takes five steps to make the initial shipping
assignments
 Northwest Corner Rule (NCR)
1. Beginning in the upper left hand corner, we assign 100 units from Des
Moines to Albuquerque. This exhaust the supply from Des Moines but
leaves Albuquerque 200 desks short. We move to the second row in the
same column.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY
DES MOINES 100 $5 $4 $3
100
(D)

EVANSVILLE $8 $4 $3
300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Northwest Corner Rule (NCR)
2. Assign 200 units from Evansville to Albuquerque. This meets
Albuquerque’s demand. Evansville has 100 units remaining so we
move to the right to the next column of the second row.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES 100 $5 $4 $3

100
(D)

EVANSVILLE 200 $8 $4 $3
300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Northwest Corner Rule (NCR)
3. Assign 100 units from Evansville to Boston. The Evansville supply
has now been exhausted but Boston is still 100 units short. We move
down vertically to the next row in the Boston column.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES 100 $5 $4 $3

100
(D)

EVANSVILLE 200 $8 100 $4 $3

300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Northwest Corner Rule (NCR)
4. Assign 100 units from Fort Lauderdale to Boston. This fulfills Boston’s
demand and Fort Lauderdale still has 200 units available.

TO ALBUQUERQUE BOSTON CLEVELAND FACTORY

FROM (A) (B) (C) CAPACITY

DES MOINES 100 $5 $4 $3

100
(D)

EVANSVILLE 200 $8 100 $4 $3

300
(E)

FORT LAUDERDALE $9 100 $7 $5

300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS

15
 Northwest Corner Rule (NCR)
5. Assign 200 units from Fort Lauderdale to Cleveland. This exhausts
Fort Lauderdale’s supply and Cleveland’s demand. The initial
shipment schedule is now complete.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES 100 $5 $4 $3

100
(D)

EVANSVILLE 200 $8 100 $4 $3

300
(E)

FORT LAUDERDALE $9 100 $7 200 $5

300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Northwest Corner Rule (NCR)
We can easily compute the cost of this shipping
assignment
ROUTE
UNITS PER UNIT TOTAL
FROM TO SHIPPED x COST ($) = COST ($)

D A 100 5 500

E A 200 8 1,600

E B 100 4 400

F B 100 7 700

F C 200 5 1,000

4,200

This solution is feasible but we need to check to see if

it is
optimal
 2.Least Cell Cost Method (LCCM)

As its name indicates, this methods entails making allocation at each step

by selecting from the routes available, the one with the minimum cost.

The specific steps of the minimum cell cost method are summarized next.

1. Allocate as much as possible to the feasible cell with the minimum

transportation cost, and adjust the rim requirements.

2. Repeat step 1 until all rim requirements have been met.

 Least Cell Cost Method
1. The initial allocation is made to the cell in the tableau having the
lowest cost. In the transportation tableau for our example problem,
cells DC and EC have the minimum cost of $3. cell EC is selected as
higher quantity can be assigned.
Notice that all of the remaining cells in column C have now been
eliminated, because all of the demand at destination C, Cleveland, has
now been supplied by source E, Evansville.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100
(D)

EVANSVILLE $8 $4 200 $3
300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Cont’d…..
Least Cell Cost Method
2. The next allocation is made to the cell that has the
minimum cost and also is feasible. This is cell EB which
has a cost of $4. The most that can be allocated is 100
tons (300 tons minus the 200 tons already supplied). This
allocation is shown in Table.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 $4 $3
100
(D)

EVANSVILLE $8 100 $4 200 $3

300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Cont’d…..
Least Cell Cost Method
3. The next allocation is made to the cell that has the
minimum cost and also is feasible. This is cell DB which
has a cost of $4. The most that can be allocated is 100
tons (200 tons minus the 200 tons already supplied).
This allocation is shown in Table.
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 100 $4 $3

100
(D)

EVANSVILLE $8 100 $4 200 $3

300
(E)

FORT LAUDERDALE $9 $7 $5
300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Cont’d….
Least Cost Method
4. The next allocation is made to the cell that has the
minimum cost and also is still feasible. This is cell EA which
has a cost of $9. The most that can be allocated is 300
tons. This allocation is shown in Table. This step ends the
initial solution
TO ALBUQUERQUE BOSTON CLEVELAND FACTORY
FROM (A) (B) (C) CAPACITY

DES MOINES $5 100 $4 $3

100
(D)

EVANSVILLE $8 100 $4 200 $3

300
(E)

FORT LAUDERDALE 300 $9 $7 $5

300
(F)

WAREHOUSE 300 200 200 700

REQUIREMENTS
 Cont’d…
Least Cell Cost Method
We can also compute the cost of this
shipping assignment
ROUTE
UNITS PER UNIT TOTAL
FROM TO SHIPPED x COST ($) = COST ($)
D B 100 4 400
E C 200 3 600
E B 100 4 400
F A 300 9 2,700
4,100

This solution is feasible but we need still to check to see

if it is optimal
23
 3. Vogel’s Approximation Method
Another alternative way to find an initial solution

• Vogel’s Approximation Method (VAM) is not as simple as the northwest

corner method or the least cell cost method, but it provides a very
good initial solution, often one that is the optimal solution

• To apply VAM, we first compute for each row and column the
penalty faced if we should ship over the second-best route instead of
the least-cost route

24
 Vogel’s Approximation Method
The six steps involved in determining an initial VAM solution are
illustrated below beginning with the same layout originally shown.

VAM Step 1. For each row and column of the transportation table,
find the difference between the distribution cost on the best route in
the row or column and the second best route in the row or column
 This is the opportunity cost of not using the best route

 Step 1 has been done in Table next slide

25
 Vogel’s Approximation Method

Transportation table with VAM row and column

differences shown
TO TOTAL
FROM
A B C
AVAILABLE
$5 $4 $3
D 100 1

$8 $4 $3
E 300 1

$9 $7 $5
F 300 2

TOTAL REQUIRED 300 200 200 700

OPPORTUNITY
3 0 0 COSTS
 Vogel’s Approximation Method
VAM Step 2. identify the row or column with the greatest opportunity
cost, or difference (column A in this example)

VAM Step 3.Assign as many units as possible to the lowest-cost square in

the row or column selected in step 2.
In column A cell DA with $5, is a cell of lowest cost, and the maximum
units that can be assigned is 100.
TO TOTAL
FROM
A B C
AVAILABLE

100 $5 $4 $3
D 100 1

$8 $4 $3
E 300 1

$9 $7 $5
F 300 2

TOTAL REQUIRED 300 200 200 700

3 OPPORTUNITY
0 0
(Largest) COSTS
 Vogel’s Approximation Method
VAM Step 4. Eliminate any row or column that has been completely satisfied
by the assignment just made by placing Xs in each appropriate square

VAM Step 5. Recompute the cost differences for the transportation table,
omitting rows or columns eliminated in the previous step
TO TOTAL
FROM
A B C
AVAILABLE

100 $5 x $4 x $3
D 100

$8 $4 $3
E 300 1

$9 $7 $5
F 300 2

TOTAL REQUIRED 300 200 200 700

3 OPPORTUNITY
1 2
(Largest) COSTS
 Vogel’s Approximation Method

VAM Step 6. Return to step 2 for the rows and columns remaining and
repeat the steps until an initial feasible solution has been obtained

• In this case column B now has the greatest difference, 3

• We assign 200 units to the lowest-cost square in the column,
EB
• We recompute the differences and find the greatest
difference is now in row E
• We assign 100 units to the lowest-cost square in the
column, EC
 TO TOTAL
FROM
A B C
AVAILABLE

100 $5 x $4 x $3
D 100

$8 200 $4 $3
E 300 1

$9 x $7 $5
F 300 2

TOTAL REQUIRED 300 200 200 700

3 OPPORTUNITY
1 2
(Largest) COSTS

TO TOTAL
FROM
A B C
AVAILABLE

100 $5 x $4 x $3
D 100

x $8 200 $4 100 $3
E 300

$9 x $7 $5
F 300

TOTAL REQUIRED 300 200 200 700

OPPORTUNITY COSTS
 TO TOTAL
FROM
A B C
AVAILABLE(Sup
ply)
100 $5 x $4 x $3
D 100

x $8 200 $4 100 $3
E 300

200 $9 x $7 100 $5
F 300

TOTAL 300 200 200 700

REQUIRED( Demand )
OPPORTUNITY
COSTS

We can also compute the cost of this shipping assignment

ROUTE
UNITS PER UNIT TOTAL
FROM TO SHIPPED x COST ($) = COST ($)
D A 100 5 500
E B 200 4 800
E C 100 3 300
F A 200 9 1,800
F C 100 5 500
3,900
Exercise
A car rental company is faced with an allocation problem
resulting from rental agreements that allow cars to be returned to
locations other than those at which they were originally rented.
At the present time, there are two locations (sources) with 15 and
13 surplus cars, respectively, and four locations (destinations)
requiring 9, 6, 7, and 9 cars, respectively.
Unit transportation costs (in dollars) between the locations are as
follows:

Dest. 1 Dest. 2 Dest. 3 Dest. 4

Source 1 45 17 21 30

Source 2 14 18 19 31

Determine a minimum-cost shipping schedule for satisfying all

demands from current inventory using NCR, LCM AND VAM
methods
 PART II
Assignment Model
Assignment model
• The assignment problem refers to the class of LP problems that involve
determining the most efficient assignment of resources to tasks
• The objective is most often to minimize total costs or total time to
perform the tasks at hand
• One important characteristic of assignment problems is that only one
job or worker can be assigned to one machine or project
 Cont’d….
• Each assignment problem has associated with it a table, or matrix

• Generally, the rows contain the objects or people we wish to assign,

and the columns comprise the tasks or things we want them assigned
to. The numbers in the table are the costs associated with each
particular assignment

• Anassignment problem can be viewed as a

transportation problem in which the capacity from each source is 1
and the demand at each destination is 1
 Assignment Model : Example

• The Fix-It Shop has three rush projects to repair

• They have three repair persons with different talents and abilities

• The owner has estimates of wage costs for each worker for each
project
• The owner’s objective is to assign the three project to the workers in
a way that will result in the lowest cost to the shop
• Each project will be assigned exclusively to one worker

39
 Assignment Model
Estimated project repair costs for the Fix-It shop
assignment problem

PROJECT

PERSON
1 2 3

Adams $11 $14 $6

Brown 8 10 11

Cooper 9 12 7
 Cont’d…
Summary of Fix-It Shop assignment alternatives
and costs

PRODUCT ASSIGNMENT
LABOR TOTAL
1 2 3
COSTS ($) COSTS ($)
Adams Brown Cooper 11 + 10 + 7 28
Adams Cooper Brown 11 + 12 + 11 34
Brown Adams Cooper 8 + 14 + 7 29
Brown Cooper Adams 8 + 12 + 6 26
Cooper Adams Brown 9 + 14 + 11 34
Cooper Brown Adams 9 + 10 + 6 25
 The Hungarian Method (Flood’s Technique)
• The Hungarian method is an efficient method of finding the optimal
solution to an assignment problem without having to make direct
comparisons of every option
• It operates on the principle of matrix reduction

• By subtracting and adding appropriate numbers in the cost table or matrix,

we can reduce the problem to a matrix of opportunity costs
• Opportunity costs show the relative penalty associated with assigning
any person to a project as opposed to making the best assignment
• We want to make assignment so that the opportunity cost for each
assignment is zero
 Three Steps of the Assignment Method
1. Find the opportunity cost table by:

(a) Subtracting the smallest number in each row of the original

cost table or matrix from every number in that row

(b) Then subtracting the smallest number in each column of the table
obtained in part (a) from every number in that column

2. Test the table resulting from step 1 to see whether an optimal assignment
can be made by drawing the minimum number of vertical and
horizontal straight lines necessary to cover all the zeros in the table.
If the number of lines is less than the number of rows or columns,
proceed to step 3.
 Three Steps of the Assignment Method

3. Revise the present opportunity cost table by subtracting the

smallest number not covered by a line from every other
uncovered number. This same number is also added to any
number(s) lying at the intersection of horizontal and
vertical lines. Return to step 2 and continue the cycle until
an optimal assignment is possible.
 Steps in the Assignment
Method
Set up cost table for problem
Not
optimal Revise opportunity cost table
in two steps:
Step 1 (a)Subtract the smallest
number not covered by a line
Find opportunity cost from itself and every other
uncovered number
(a) Subtract smallest number in
(b) add this number at every
each row from every
intersection of any two lines
number in that row, then
(b) subtract smallest number in
each column from every
number in that column Optimal solution at zero
locations. Systematically make
final assignments.
Step 2
(a)Check each row and column
for a unique zero and make the
Test opportunity cost table to first assignment in that row or
see if optimal assignments are column
possible by drawing the
minimum possible lines on (b)Eliminate that row and
columns and/or rows such that Optimal column and search for another
all zeros are covered unique zero. Make that
assignment and proceed in a
like manner.
 Three Steps of the Assignment Method
Step 1: Find the opportunity cost table
– We can compute row opportunity costs and column
opportunity costs
– What we need is the total opportunity cost
– We derive this by taking the row opportunity costs and
subtract the smallest number in that column from each
number in that column
 Three Steps of the Assignment Method

• Cost of each • Row

person- project opportunity
assignmentPROJECT cost table PROJECT
PERSON 1 2 3 PERSON 1 2 3

Adams $11 $14 $6 Adams $5 $8 $0

Brown 8 10 11 Brown 0 2 3

Cooper 9 12 7 Cooper 2 5 0

The opportunity cost of assigning Cooper

to project 2 is $12 – $7 = $5
 Three Steps of the Assignment
Method
We derive the total opportunity costs by taking the costs
in Row opportunity cost Table above and subtract the
smallest number in each column from each number in
that
• Rowcolumn • Total opportunity
opportunity
cost table cost table
PROJECT PROJECT
PERSON 1 2 3 PERSON 1 2 3

Adams $5 $8 $0 Adams $5 $6 $0

Brown 0 2 3 Brown 0 0 3

Cooper 2 5 0 Cooper 2 3 0
 Three Steps of the Assignment Method
Step 2: Test for the optimal assignment
– We want to assign workers to projects in such a way
that the total labor costs are at a minimum
– We would like to have a total assigned opportunity cost of
zero
– The test to determine if we have reached an optimal
solution is simple
– We find the minimum number of straight lines necessary
to cover all the zeros in the table
– If the number of lines equals the number of rows or
columns, an optimal solution has been reached

49
 Three Steps of the Assignment Method
Test for optimal
solution PROJECT
PERSON 1 2 3

Adams $5 $6 $0

Brown 0 0 3 Covering line 1

Cooper 2 3 0

Covering line 2

This requires only two lines to cover the zeros while the numbers
of columns and rows are three so the solution is not optimal
 Three Steps of the Assignment Method
Step 3: Revise the opportunity-cost table
– We subtract the smallest number not covered by a line
from all numbers not covered by a straight line
– The same number is added to every number lying at the
intersection of any two lines
– We then return to step 2 to test this new table
 Three Steps of the Assignment Method
Revised opportunity cost table (derived by subtracting
2 from each cell not covered by a line and adding 2
to the cell at the intersection of the lines)

PROJECT PROJECT
PERSON 1 2 3 PERSON 1 2 3

Adams $5 $6 $0
Adams $3 $4 $0
Brown 0 0 3
Brown 0 0 5
Cooper 2 3 0
Cooper 0 1 0
 Three Steps of the Assignment Method
Optimality test on the revised opportunity cost
table
PROJECT
PERSON 1 2 3

Adams $3 $4 $0

Brown 0 0 5 Covering line 2

Cooper 0 1 0

Covering line 1 Covering line

3

This requires three lines to cover the zeros so

the solution is optimal
Making the Final Assignment
• The optimal assignment is Adams to project 3, Brown to
project 2, and Cooper to project 1
• But this is a simple problem
• For larger problems one approach to make the final
assignment is to select a row or column that contains only
one zero
• Make the assignment to that cell and rule out its row and
column
• Follow this same approach for all the remaining cells

PROJECT
PERSON 1 2 3

Adams $3 $4 $0

Brown 0 0 5

Cooper 0 1 0
Making the Final Assignment
Making the final
assignments
(A) FIRST (B) SECOND (C) THIRD
ASSIGNMENT ASSIGNMENT ASSIGNMENT

1 2 3 1 3 1 3

Adams 3 0 2
3 4 0 Adams 2
3 4 0
4 Adams
5 Brown 0 0 5 Brown 0 0 5
Brown 0
0 0 Cooper 0 1 0 Cooper 0 1 0

Cooper 0
1
 Making the Final Assignment
Total labor costs of this assignment are
ASSIGNMENT COST ($)

Adams to project 3 6

Brown to project 2 10

Cooper to project 1 9

Total cost 25
Questions
?
Thank you!