Application of Transportation

Model in Business/Industries
PRESENTED BY:-GROUP 3

ARKA PRBHA GHOSH(09DF011)

ARNAB DAS(09DF012)
ARUN KUMAR(09DF013)
ARUNJYOTI MUKHERJEE(09DF014)
ASHRAF ANSARI(09DF015)
 INTRODUCTION
• Transportation problem is to
transport various amount of a single
homogeneous commodity, that are
initially stored at various origins, to
different destinations in such way
that the total transportation cost is
minimum.
 METHODS OF TRANSPORTATION
• North-West Corner Rule(NWCR)

• Lowest Cost Entry Method(LCEM)

• Vogel’s Approximation Method(VAM)

 North West Corner Method
Warehouse
Factory Capacity
W1 W2 W3 W4 (Supply)
21 16 25 13

F1 6 5 11

17 18 14 23

F2 5 8 13

32 27 18 41

F3 4 15 19

Requirement
(Demand)
6 10 12 15 43
 Initial Basic Feasible Solution

• X11=6
• X12=5
• X22=5
• x23=8
• X33=4
• X34=15

Total Transportation
Cost=(6*21)+(5*16)+(5*18)+(8*14)+(4*18)+(15*41)
=Rs1055
 Applications of NWCM
The main areas of applications of NWCM are:
• It is used for transportation within the campus
of an organization as costs are not significant.
• It is used for transportation to satisfy such
obligations where cost is not the criteria.
VOGEL’S APPROXIMATION METHOD

To
W1 W2 W3 W4
Capacity
From
19 7 3 21

F1 100

15 21 18 6

F2 300

11 14 15 22

F3 200

Demand 150 100 200 150 600

Initial basic feasible solution
x13=100
x21=50
x23=100
x24=150
x31=100
x32=100
TTC=
(100*3)+(50*15)+(100*18)+(150*6)+(100*11)+(100*14)
=300+750+1800+900+1100+1400
=6250
 LEAST COST METHOD
W1 W2 W3 W4 CAPACITY
TO
FROM
F1 19 30 50 10 7

F2 70 30 40 60 9

F3 40 8 70 20 18

REQUIREMEN 5 8 7 14 43
T
LCM OR MATRIX-MINIMA METHOD
STEP 1 :-
• DETERMINE THE SMALLEST COST IN THE COST MATRIX OF THE
TRANSPORTATION TABLE.LET IT BE CIJ. ALLOCATE XIJ =MIN(AI ,BJ) IN THE CELL.

STEP 2 :-
• IF ITH ROW GETS EXHAUSTED CROSS IT OUT ,AS A RESULT THE
TRANSPORTATION TABLE GETS REDUCED.
• IF JTH COLUMN GETS EXHAUSTED CROSS IT OUT ,AS A RESULT THE
TRASPORTATION TABLE GETS REDUCED.

STEP 3 :-
• REPEAT STEPS 1 AND 2 UNTIL THE ALL THE REQUIREMENTS ARE
SATISFIED.
 APPLICATION:-
 LCM OR MATRIX MINIMA METHOD IS CERTAINLY AN
IMPROVEMENT OVER THE NWCR(NORTH-WEST CORNER
RULE) ,BUT IS NOT YET THE LOWEST POSSIBLE SHIPPING
SCHEDULE.
 IT IS USED TO COMPUTE TRANSPORTAION ROUTE IN SUCH A
WAY SO AS TO MINIMISE COST BUT NOT IN AN OPTIMUM
WAY.
 IN LCM METHOD REDUCTION OF TOTAL COST IS DEFINTELY
THE PRIMARY CRITERIA BUT IT IS NOT DEALT IN A OPTIMUM
WAY,WHICH CAN BE DERIVED THROUGH VAM METHOD.
 APPLICATIONS OF VAM
•It is used to compute transportation routes in such a way
as to minimize transportation cost for finding out locations
of warehouses.
•It is used to find out locations of transportation
corporations depots where insignificant total cost
difference may not matter.
APPLICATIONS-TRANSPORTATION METHOD
 Minimize shipping costs from factories to
warehouses(or from warehouses to retail
outlets).
 Determine lowest cost location for new
factory,warehouse,office,or other outlet facility.
 Find minimum cost production schedule that
satisfies firm’s demand and production
limitations.
 CONCLUSION
 The transportation problem is one of the most
frequently encountered application in real life
situations and is a special type of linear
programming problem.
 The transportation problem indicates the
amount of consignment to be transported from
various origins to different destinations so that
the total transportation cost is minimized
without violating the availability constraints and
the requirement constraints.
THANK YOU