Decision Making Model

Transshipment Problem
Case Presentation

Submitted to: Prof. Hitesh Arora

Presented by :
Pankaj Bansal 221084
Piyush Jain 221089




Case Description
There are two Suppliers (S1, S2) three plants (P1, P2, P3)
and two warehouses(W1, W2).
Warehouse receive the raw material from the two suppliers
and ship them to the three plants.
Supply value of Suppliers
S1- 1000 units S2 - 1500 units
Demand of plants
P1 800 units P2 1200 units P3 1000
units

Objective : To calculate the optimal shipping plan from
different sources(suppliers) to different destinations
(plants) through the transient nodes(warehouses).
Transportation cost per unit b/w different sources
and destinations combination can be
represented as :





P1 P2 P3 W1 W2 Total
Supply
S1
17 16 1000
S2
11 13 1500
W1
15 8 20 0 13
W2
18 10 9 14 0
Total
Demand
800 1200 1000

Here, Total Supply = 2500 units and Total Demand = 3000 units

Total supply is not equal to total demand, therefore its an
Unbalanced Transportation Problem

Balanced Transportation Problem
P1 P2 P3 W1 W2
Total
Supply
S1 17 16 1000
S2 11 13 1500
Sd 0 0 500
W1 15 8 20 0 13 3000
W2 18 10 9 14 0 3000
Total
Demand
800 1200 1000 3000 3000
Cost Table
BACK 1
BACK 2
BACK 3
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2 11 13 1500 2
Sd 0 0 500 0
W1 15 8 20 0 13 3000 8

W2

18

10

9

14

0

3000

9
Demand 800 1200 1000 3000 3000

Penalty

3

2

11

0

0
1000
2000
1
USING VAM METHOD
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2 11 13 1500 2
Sd 0 0 500 0
W1 15 8 20 0 13 3000 8

W2

18

10
1000
9
14
0

2000

10
Demand 800 1200 1000 3000 3000

Penalty 3 2 11 0 0
2000
1000
2
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2 11 13 1500 2
Sd 0 0 500 0
W1
15
8 20 0 13
3000
8

W2

18

10
1000
9
14 2000
0

3000

10
Demand 800 1200 1000 3000 1000
Penalty 11 0 0
800
2200
3
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2 11 13 1500 2
Sd






0

0

500
0
W1 800
15

8

20

0

13

2200
8

W2

18

10
1000
9

14
2000
0

3000


10
Demand 800 1200 1000 3000 1000
Penalty 11 0 13
1200 1000
4
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2 11 13 1500 2
Sd






0

0
500
0
W1 800
15
1200
8

20

0

13

1000


13

W2

18

10
1000
9

14
2000
0

2000

10
Demand 800

1200 1000 3000 1000

Penalty 11 0 13
500
500
5
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2 11 13 1500 2
Sd






0
500
0
500
0
W1 800
15
1200
8

20

0

13

1000

13

W2

18

10
1000
9

14
2000
0

3000

10
Demand 800

1200 1000 3000 500
Penalty 11 11 0
1000
2000
P1 P2 P3 W1 W2 Supply Penalty
S1 17 16 1000 1
S2






11

13

1500

2
Sd






0
500
0

500

0
W1 800
15
1200
8

20

0

13

3000

13

W2

18

10
1000
9

14
2000
0

3000

10
Demand 800

1200 1000 2000

1000
500
Penalty 11 6 3
1500
500
P1 P2 P3 W1 W2 Supply Penalty
S1






17

16
1000


1
S2





1500
11

13

1500

2
Sd






0
500
0

500

0
W1 800
15
1200
8

20

0

13

3000

13

W2

18

10
1000
9

14
2000
0

3000

10
Demand 800

1200 1000 500 1000
500
Penalty 11 17 16
500
500
P1 P2 P3 W1 W2 Supply Penalty
S1





500
17

16
1000
500

16
S2





1500
11

13

1500

2
Sd






0
500
0

500

0
W1 800
15
1200
8

20

0

13

3000

13

W2

18

10
1000
9

14
2000
0

3000

10
Demand 800

1200 1000 3000 1000
500
Penalty 11 17 16
500
P1 P2 P3 W1 W2 Supply Penalty
S1





500
17
500
16
1000
16
S2





1500
11

13

1500

2
Sd






0
500
0

500

0
W1 800
15
1200
8

20

0

13

3000

13

W2

18

10
1000
9

14
2000
0

3000

10
Demand 800

1200 1000 3000 3000
Penalty 11 17 16
Initial Basic Feasible Solution
(IBFS)
P1 P2 P3 W1 W2
S1 - - - 500 500
S2 - - - 1500 -
Sd - - - - 500
W1 800 1200 - 1000 -
W2 - - 1000 - 2000
Here, Number of Basic Variables = 9
Also M+N-1 = 9

Hence, Its a Non-Degenerate Solution .
BACK
MODI Method
Ui
- - - 17 16 16
- - - 11 - 10
- - - - 0 0
15 8 - 0 - -1
- - 9 - 0 0
Vj
16 9 9 1 0
Cost for Occupied
Cells
Ui
- - 16
- 13 10
0 - 0
- - 20 - 13 -1
18 10 - 14 - 0
Vj
16 9 9 1 0
Cost for Unoccupied Cells
Ui + Vj = Cij
IBFS COST TABLE
p1 p2 p3 w1 W2
S1 - -
S2 - 3
Sd -1 -
W1 - - 12 - 14
W2 2 1 - 13 -
MODI Method
Net Evaluation



Cij = Cij (Ui + Vj )
As there is a negative element ( i.e. all Cij > 0 condition is not satisfied) in
net evaluation table, thus it is NOT AN OPTIMAL SOLUTION.

Need to introduce at the negative element position.

P1 P2 P3 W1 W2
S1
- - - 500- 500+
S2
- - - 1500 -
Sd
- - - 500-
W1
800 1200 - 1000 -
W2
- - 1000 - 2000
Minimal possible value of = 500

Two basic cells will become zero.
Introduction of Theta ()
Basic Feasible Solution (NBFS) -
1
P1 P2 P3 W1 W2
S1 - - - - 1000
S2 - - - 1500 -
Sd - - - 500 -
W1 800 1200 - 1000 -
W2 - - 1000 - 2000
Here, Number of Basic Variables = 8
Also M+N-1 = 9
Hence, Its a Degenerate Solution .
Degeneracy is resolved by introduction of Epsilon ()
BACK
Introduction of Epsilon()
P1 P2 P3 W1 W2
S1 - - - - 1000
S2 - - - 1500 -
Sd - - - 500 -
W1 800 1200 - 1000
W2 - - 1000 - 2000
Here, Number of Basic Variables = 9
Also M+N-1 = 9

Hence, Its a Non-Degenerate Solution

MODI Method
Ui
- - - - 16 16
- - - 11 - 24
- - - 0 - 13
15 8 - 0 13 13
- - 9 - 0 0
Vj
2 -5 9 -13 0
Ui
17 - 16
- 13 24
- 0 13
- - 20 - - 13
18 10 - 14 - 0
Vj
2 -5 9 -13 0
Cost for occupied
cells
Cost for unoccupied cells
Ui + Vj = Cij
BFS COST TABLE
MODI Method
Net Evaluation



Cij = Cij (Ui + Vj )
p1 p2 p3 w1 W2
S1 14 -
S2 - -11
Sd - -13
W1 - - -2 - -
W2 3 15 - 21 -
As there are negative elements ( i.e. all Cij > 0 condition is not satisfied) in
net evaluation table, thus it is NOT AN OPTIMAL SOLUTION.

Need to introduce at the most negative element position.

P1 P2 P3 W1 W2
S1
- - - - 1000
S2
- - - 1500 -
Sd
- - - 500-
W1
800 1200 - 1000 + -
W2
- - 1000 - 2000
Minimal possible value of =

One basic cell will become zero.
Introduction of Theta ()
Basic Feasible Solution (BFS)
- 2
P1 P2 P3 W1 W2
S1 - - - - 1000
S2 - - - 1500 -
Sd - - - 500 -
W1 800 1200 - 1000 + -
W2 - - 1000 - 2000
Here, Number of Basic Variables = 9
Also M+N-1 = 9

Hence, Its a Non-Degenerate Solution .

BACK
MODI Method
Ui
- - - - 16 16
- - - 11 - 11
- - - 0 0 0
15 8 - 0 - 0
- - 9 - 0 0
Vj
15 8 9 0 0
Ui
17 - 16
- 13 11
- - 0
- - 20 - 13 0
18 10 - 14 - 0
Vj
15 8 9 0 0
Cost for occupied
cells
Cost for unoccupied cells
Ui + Vj = Cij
BFS COST TABLE
MODI Method
Net Evaluation



Cij = Cij (Ui + Vj )
p1 p2 p3 W1 W2
S1 1 -
S2 - 2
Sd - -
W1 - - 11 - 13
W2 3 2 - 14 -
As there is no negative costs ( i.e. all Cij > 0 ) in net evaluation
table,
thus it is an OPTIMAL SOLUTION.

P1 P2 P3 W1 W2
Total
Supply
S1 17 16 1000
S2 11 13 1500
Sd 0 0 500
W1 15 8 20 0 13 3000
W2 18 10 9 14 0 3000
Total
Demand
800 1200 1000 3000 3000
P1 P2 P3 W1 W2
S1 - - - - 1000
S2 - - - 1500 -
Sd - - - 500 -
W1 800 1200 -
1000 +

-
W2 - - 1000 - 2000
Cost Table
Optimal Table
Final Optimal Cost
The optimal cost for transshipment from
sources to destinations through transient
nodes is :

Z* = 16*1000 + 11*1500 + 0*(500- ) + 0* +
15*800 + 8*1200 + 0*(1000 + ) +
9*1000 + 0*2000
= Rs. 63100 ( is considered as negligible
)
Diagrammatic Representation
S1
S2
P1
P2
P3
1500
1000
800
1200
1000
W 1
W 2
Sd
500
THANK YOU