OPTIMIZAO E DECISO 10/11

PL #3 Transportation and Assignment Problems

Alexandra Moutinho
th

(from Hillier & Lieberman Introduction to Operations Research, 8 edition)

METRO WATER DISTRICT is an agency that administers water distribution in a large geographic
region. The region is fairly arid, so the district must purchase and bring in water from outside the
region. The sources of this imported water are the Colombo, Sacron, and Calorie rivers. The district
then resells the water to users in the region. Its main customers are the water departments of the
cities of Berdoo, Los Devils, San Go, and Hollyglass.
It is possible to supply any of these cities with water brought in from any of the three rivers, with the
exception that no provision has been made to supply Hollyglass with Calorie River water. However,
because of the geographic layouts of the aqueducts and the cities in the region, the cost to the
district of supplying water depends upon both the source of the water and the city being supplied.
The variable cost per acre foot of water (in tens of dollars) for each combination of river and city is
given in Table 1.

Colombo River
Sacron River
Calorie River
Minimum needed
Requested

Berdoo
16
14
19
30
50

Cost (tens of $) per Acre Foot

Los Devils
San Go
Hollyglass
13
22
17
13
19
15
20
23
70
0
10
70
30

Supply
50
60
50
(in units of 1 million
acre feet)

Table 1 Water resources data for Metro Water District.

Despite these variations, the price per acre foot charged by the district is independent of the source
of the water and is the same for all cities.
The management of the district is now faced with the problem of how to allocate the available water
during the upcoming summer season. In units of 1 million acre feet, the amounts available from the
three rivers are given in the rightmost column of Table 1. The district is committed to providing a
certain minimum amount to meet the essential needs of each city (with the exception of San Go,
which has an independent source of water), as shown in the minimum needed row of the table. The
requested row indicates that Los Devils desires no more than the minimum amount, but that Berdoo
would like to buy as much as 20 more, San Go would buy up to 30 more, and Hollyglass will take as
much as it can get.
Management wishes to allocate all the available water from the three rivers to the four cities in such
a way as to at least meet the essential needs of each city while minimizing the total cost to the
district.
1. Formulate this problem as a transportation problem by constructing the appropriate parameter
table.
2. Using Russells approximation method, apply the transportation simplex method to obtain the
optimal solution for this problem.
3. Use Excel Solver to solve this problem and confirm the solution obtained in 2.

Resolution:
1. Table 1 already is close to the proper form for a parameter table, with the rivers being the sources
and the cities being the destinations. However, the one basic difficulty is that it is not clear what
the demands at the destinations should be. Hollyglass has an upper bound given by the difference
between the available water supply and the water requested by the other districts:
(50 + 60 + 50)

(30 + 70 + 0) = 60

Since the demand quantities must be constants, let us temporarily suppose that it is not
necessary to satisfy the minimum needs, and assume the upper bounds as constraints. However,
considering the Hollyglass new request of 60, we now have excess demand capacity, so we need
to adjust the problem introducing a dummy source. The imaginary supply quantity is the
difference between the sum of the demands and the sum of the real supplies:
(50 + 70 + 30 + 60)

(50 + 60 + 50) = 50

The resulting parameter table is given in Table 2. The cost entries in the dummy row are zero
because there is no cost incurred by the fictional allocations from this dummy source. On the
other hand, a huge unit cost M is assigned to the Calorie River Hollyglass spot, preventing this
allocation.

Source

Colombo River
Sacron River
Calorie River
Dummy

Demand

Berdoo
16
14
19
0
50

Cost (tens of $) per Acre Foot

Destination
Los Devils
San Go
Hollyglass
13
22
17
13
19
15
20
23
M
0
0
0
70
30
60

Supply
50
60
50
50

Table 2 Parameter table without minimum needs.

Let us now go back and check each citys minimum needs:

San Go has no minimum needs;
Hollyglass, with a demand of 60 exceeds the dummys source supply of 50 by 10, which
corresponds to the minimum request provided by the real sources in any feasible solution;
Los Devils entire demand of 70 must be supplied from real sources, so we must assign a huge
unit cost M to the Los Devils Dummy spot;
Berdoo: the dummy source could supply some minimum need in addition to extra requested
amount. In order to prevent the dummy source from supplying more than 20 of Berdoo total
demand of 50, we split Berdoo into 2 destinations, one with the minimum request of 30 and a
dummy cost of M, and one extra with the remaining request of 20 and a dummy cost of zero.
The final parameter table is given in Table 3.

Source
Demand

Colombo River
Sacron River
Calorie River
Dummy

Berdoo
(min)
16
14
19
M
30

Cost (tens of $) per Acre Foot

Destination
Berdoo
Los Devils
San Go
(extra)
16
13
22
14
13
19
19
20
23
0
M
0
20
70
30

Hollyglass

Supply

17
15
M
0
60

50
60
50
50

Table 3 Final parameter table.

Optimizao e Deciso 09/10 - PL #3 Transportation and Assignment Problems - Alexandra Moutinho

2. Summary of the Transportation Simplex Method

Initialization: Construct an initial BF solution by the general procedure for constructing an initial BF
solution described below. Go to the optimality test.
Optimality test: Derive and by selecting the row having the largest number of allocations,
setting its = 0, and then solving the set of equations
for each
( ) such that
is basic. If
0 for every ( ) such that
is
nonbasic, then the current solution is optimal, so stop. Otherwise, go to an
iteration.
Iteration:
1) Determine the entering basic variable: Select the nonbasic variable
absolute terms) negative value of
.

having the largest (in

2) Determine the leaving basic variable: Identify the chain reaction required to retain feasibility
when the entering basic variable is increased. From the donor cells (cells with minus
contribution), select the basic variable having the smallest value.
3) Determine the new BF solution: Add the value of the leaving basic variable to the allocation
for each recipient cell. Subtract this value from the allocation for each donor cell.
General procedure for constructing an initial BF solution
To begin, all source rows and destination columns of the transportation simplex tableau are
initially under consideration for providing a basic variable (allocation).
1) From the rows and columns still under consideration, select the next basic variable (allocation)
according to some criterion (in this case, Russells approximation method described below).
2) Make that allocation large enough to exactly use up the remaining supply in its row or the
remaining demand in its column (whichever is smaller).
3) Eliminate that row or column (whichever had the smaller remaining supply or demand) from
further consideration. (If the row and column have the same remaining supply and demand,
then arbitrarily select the row as the one to be eliminated. The column will be used later to
provide a degenerate basic variable, i.e., a circled allocation of zero.)
4) If only one row or only one column remains under consideration, then the procedure is
completed by selecting every remaining variable (i.e., those variables that were neither
previously selected to be basic nor eliminated from consideration by eliminating their row or
column) associated with that row or column to be basic with the only feasible allocation.
Otherwise, return to step 1.
Russells approximation method: For each source row remaining under consideration, determine
its , which is the largest unit cost
still remaining in that row. For each destination column
remaining under consideration, determine its , which is the largest unit cost
still remaining
in that column. For each variable
not previously selected in these rows and columns, calculate
. Select the variable having the largest (in absolute terms) negative value of .
(Ties may be broken arbitrarily.)
Using Russells approximation method in step 1 of the General procedure for constructing an initial
BF solution, at iteration 1, the largest unit cost in row 1 is
= 22, the largest in column 1 is
, and so forth. Thus,
= 16

22

Calculating all the

values for = 1, 2, 3, 4 and = 1, 2, 3, 4, 5 shows that
=0
has the
largest negative value, so
= 50 is selected as the first basic variable (allocation). This
allocation exactly uses up the supply in row 4, so this row is eliminated from further consideration.

Optimizao e Deciso 09/10 - PL #3 Transportation and Assignment Problems - Alexandra Moutinho

Note that eliminating this row changes

and
for the next iteration. Therefore, the second
iteration requires recalculating the
with = 1, 3 as well as eliminating = 4. The largest
negative value now is
= 17

22

so
= 10 becomes the second basic variable (allocation), eliminating column 5 from further
consideration.

Proceed similarly for the subsequent iterations. The initial BF solution obtained by Russells
approximation method is shown in Table 4.
Iteration
1
2
3
4
5
6

Tie with

22
22
22

19
19
19
19
19

M
M
23
23
23

M
19
19
19
19

19
19
19
19
19

M
20
20
20

23
23
23
23
23

M
M

Largest
Negative
= 2
= 5
= 29
= 26
*
= 24
Irrelevant

24 broken arbitrarily.

Table 4 - Initial BF solution from Russells approximation method.

Allocation
= 50
= 10
= 40
= 30
= 30
=0
= 20
= 30
= 2,570

The initial transportation simplex tableau is shown in Table 5.

Source

Colombo
River
Sacron
River
Calorie
River

Berdoo
(min)
16
14
30
19
0
M

Dummy

Cost (tens of $) per Acre Foot

Destination
Berdoo
Los
San
(extra)
Devils
Go
16
13
22
40
13
14
19
30
23
19
20
20
30
0
M
0

Hollyglass

Supply

ui

50

17
10
15

60

50
50

0
50

Demand

30

20

70

30

60

Z=2,570

vj
Table 5 Initial transportation simplex tableau.

We may now apply the optimality test. Since row 3 has the largest number of allocations (3 basic
variables), we set
= 0 (we have
1 basic variables and
unknowns, so we may
arbitrate a value). Solve each equation that corresponds to a basic variable in the initial BF
solution:
: 19 =
.
Set = 0, so
= 19,
: 19 =
.
= 19,
: 23 =
.
= 23.
: 14 =
.
Know = 19, so
5.
: 13 =
.
Know = 5, so = 18.
: 13 =
.
Know = 18, so
5.
: 17 =
.
Know
5, so = 22.
: 0=
.
Know = 22, so
22.
Optimizao e Deciso 09/10 - PL #3 Transportation and Assignment Problems - Alexandra Moutinho

We can also perform these operations directly in the transportation simplex tableau (see Table 6):

Source

Colombo
River
Sacron
River
Calorie
River

Berdoo
(min)
16
14
30
19
0
M

Dummy

Cost (tens of $) per Acre Foot

Destination
Berdoo
Los
San
(extra)
Devils
Go
16
13
22
40
14
13
19
30
19
20
23
20
30
0
M
0

Hollyglass

Supply

ui

50

-5

15

60

-5

50

50

-22

17
10

0
50

Demand

30
19

vj

20
19

70
18

30
23

60
22

Z=2,570

Table 6 Complete initial transportation simplex tableau.

We are now in a position to apply the optimality test by checking the values of
nonbasic variables given in Table 6:
Nonbasic variable

of the

Nonbasic variable
2
2
4
0
1
-2

2
M-22
M+3
3
M+4
-1

Because two of these values are negative (for

and
), we conclude that the current BF
solution is not optimal. Therefore, the transportation simplex method must next go to an
iteration to find a better BF solution.
The entering basic variable is
because it has the largest negative value of
. When
is increased from 0 by any particular amount, a chain reaction is set off that requires
alternately decreasing and increasing current basic variables by the same amount in order to
continue satisfying the supply and demand constraints. This chain reaction is depicted in the next
table, where the + sign inside a box in cell (2, 5) indicates that the entering basic variable is being
increased there and the + or sign next to other circles indicate that a basic variable is being
increased or decreased there.

Colombo
River
Source

Berdoo
(min)
16

Sacron
River

14

Calorie
River

19

30

Cost (tens of $) per Acre Foot

Destination
Berdoo
Los
San
Hollyglass
(extra)
Devils
Go
16
13
17 22
+
40
10
14
19
13 15
30
+
19

0
0

Dummy
Demand
vj

30
19

23
30
0

20
20
M
20
19

70
18

30
23

Supply

ui

50

-5

60

-5

50

50

-22

50
60
22

Optimizao e Deciso 09/10 - PL #3 Transportation and Assignment Problems - Alexandra Moutinho

Z=2,570

Each donor cell (indicated by a minus sign) decreases its allocation by exactly the same amount as
the entering basic variable and each recipient cell (indicated by a plus sign) is increased. The
entering basic variable will be increased as far as possible until the allocation for one of the donor
cells drops all the way down to 0. Since the original allocations for the donor cells are
= 10
and
= 30,
will be the one that drops to 0 as
is increased (by 10). Therefore,
is the
leaving basic variable.

Since each of the basic variables is being increased or decreased by 10, the values of the basic
variables in the new BF solution are
= 50,
= 30,
= 20,
= 10,
= 0,
=
20,
= 30 and
= 50.

Apply the optimality test and the necessary (plus 2) iterations to obtain the optimal solution
= 50,
= 20,
= 40,
= 30,
= 20,
= 30 and
= 20 with = 2,460.

3. Solving with Excel Solver we obtain the same optimal solution (verify!):

Optimizao e Deciso 09/10 - PL #3 Transportation and Assignment Problems - Alexandra Moutinho