Example 1: An automobile manufacturing company has four assembly plants in India.

They are located in (1) Bangalore, (2) Pune, (3) Bhopal and (4) Patna. The engines used by these plants are produced in Japan and shipped to India. Engine arrives at harbors in Kolkata (A), Chennai (B) and Vizag (C). Production plans for first quarter April through June 2012 have been set. The requirements for diesel engines for the automobiles are as follows:
Plant (destination) Bangalore (1) Pune (2) Bhopal (3) Patna (4) No. of engines required 400 900 200 500

Total

2000

The available number of diesel engines at harbors in time to be used in the first quarter are given below:

Harbor (Origin)
Kolkata (A)

No. of Engines
500

Chennai (B)
Vizag (C) Total

700
800 2000

The manager of the automobile company must decide how many engines to be sent from each harbor to each plant. The engines are transported by common carrier and charges are on a per engine basis. The relevant costs are given in the table below:

From 1 A B C 12 6 10 2 13 4 9

To 3 4 10 12 4 6 11 4

The firms goal is to minimize the total cost of transporting the diesel engines from the harbors to the assembly plants. Using North-west corner rule, help the firm to identify the initial feasible solution.

By north-west corner rule, Rs. 400 x 12 + 100 x 13 + 700 x 4 + 100 x 9 + 200 x 12 + 500 x 4 = Rs. 14, 200/-

feasibility of the solution: If No. of occupied cells in the transportation table after all the allocations are made = m + n 1; The solution obtained is said to be feasible.
Where, m No. of rows n No. of columns

Here, No. of occupied cells = 6 m+n1=3+41=6 Hence this is a feasible solution.

Least cost method

Step 1: Select the lowest cost cell in the matrix. If there is a

tie, select arbitrarily. Step 2: Allocate maximum possible units = Min (supply, demand) corresponding to this cell Step 3: Eliminate the row or column satisfied fully by the above allocation Step 4: Adjust the supply and demand for the remaining cells after the above allocation. Step 5: repeat Step 1-4 until all the supply and demand are fully satisfied.

 Obtain initial feasible solution using LCM (Least Cost Method)

From

To

Supply

D 1 2
3 Demand

E 4 8
4 95

F 1 7
2 35

6 3
4 20

50 40
60

Total cost = Rs. 3 x 20 + 4 x 15 + 8 x 20 + 4 x 60 + 1 x 35 = Rs. 555/Feasibility checking: No. of occupied cells = 5 m+n1=3+3-1=5 Hence this is a feasible solution.

Vogels Approximation Method/Penalty Method

More effective method which gives either optimal solution or one which is very near to optimal

Step 1: consider each row individually and find the difference between the least cost and the next least cost. The magnitude of the difference is listed. Repeat this for all the rows.

Step 2: perform step 1 for all the columns

Step 3: Select the highest of the differences/iterations and the corresponding row or column. Select the least cost cell in the row or column and make the allocations = Min (supply, demand). If there is a tie in the iterations, select the cell with the least cost where you can make maximum allocations. Allocate only in 1 cell at a time.

Step 4: delete the column or row, which has been fully satisfied. Step 5: Repeat step 1 4 till all the allocations are made. Iterations/penalties penalties of not using the least cost route.
10

 Obtain initial feasible solution using VAM

From

To

Supply

D 1 2
3 Demand

E 4 8
4 95

F 1 7
2 35

6 3
4 20

50 40
60

11

From D 1 2 3 Demand I II 6 3 4 20 1 -

To E 4 8 4 95 0 0

Supply F 1 7 2 35 1 1 50 40 60

I 4-1=3 7-3=4 4-2=2

II 3 1 2

12

Total cost = Rs. 555/Feasibility: No. of occupied cells = 5 m+n1=3+3-1=5 Hence this is a feasible solution.

13

 Example 1: Solve the following transportation problem

for minimum cost by taking initial feasible solution by (a) North-West Corner Rule, (b) Least Cost Method and (c) Vogels Approximation method. The entries in the matrix indicate the cost in Rs. of transporting a unit from a particular source to a particular destination.
Origi n Destination availabili ty

1 1
2 3

2 8
12 9 18

3 11
14 12 31

4 7
6 10 30

10
9 8

20
40 35 95
14

Requir 16 ement

By LCM Origin Destination availability

1
1 10 2 (18)

2
(2) 8 (10)

4
20 11 (30) 7 40

9
3 (16) 8 Requirem ent 16 18

12
(19) 9 31

14

6
35

12 30

10 95

15

 Eg 2: A Steel Company has three open-hearth furnaces

and five rolling mills. Transportation cost (Rs. Per quintal) for shipping steel from furnaces t o rolling mills are shown in the following table.
M1 F1 F2 F3 4 5 6 M2 2 4 5 4 M3 3 5 4 6 M4 2 2 7 8 M5 6 1 7 8 Supply 8 12 10

dema 4 nd

What is the optimum shipping schedule?

16

 To test the optimality: MODI (Modified Distribution Method)

17

 Step 1: Find the initial basic feasible solution of a TP by using

any one of the three methods Step 2: Find out a set of numbers ui and vj for each row and column respectively satisfying the condition cij = ui + vj for each occupied cell. Assign 0 to any row or column having maximum number of allocations. (hence any one of uis or vjs become zero.) If there is a tie, choose any one arbitrarily. Step 3: For each empty (unoccupied) cell, find out the opportunity cost ij = cij (ui + vj), which is written at the bottom right corner of that cell. If all ij > 0, the solution is optimum and a unique solution exists. If all ij 0, the solution is optimum, but an alternate solution exists. If all ij < 0, the solution is not optimum. Hence the total transportation cost can be further improved, in order to 18 obtain the minimum. In this case, proceed to Step 4.

 Step 4: select the empty cell with maximum negative

ij. Form a loop/closed path starting from this cell by drawing horizontal and vertical lines, and with all the corner cells occupied. Assign sign + and alternately and find the minimum allocation from the cell having negative sign. This allocation should be added to cells with + sign and subtracted from cells with sign.

Step 5: here we get a new cell occupied and 1 or more

previously occupied cells emptied. Repeat steps 2 & 3. (i) if all the ijs are non-negative, that will give the optimal solution. If there exists at least 1 negative value for ij, repeat step 4 & 5. this has to continue until we reach a optimal solution.
19

Example: optimize the transportation cost

P A B C de ma nd 21 17 32 6

Q 16 18 17 10

R 23 14 18 12

S 13 23 41 15

Suppl y 11 13 19

20

P A 21 B (6) 17 C 32 Dema nd 6

S (11)

Suppl P1 P2 P3 y 3 13 11 3 13 1 1 1 3 3 -

P4 P5 P6 -

16

23 (3) (4)

18 (10) 17 10

14 (9) 18 12

23

17

41 15

19 43

P1
P2 P3 P4 P5 P6

4
15 15 -

1
1 1 1 17 -

4
4 4 4 18 18

10
18 -

No. of allocated cells = 6 m+n1=3+41 No. of allocated cells = m + n 1 IBS is feasible Also, total cost = 11x13 + 6x17 + 3x14 + 4x23 + 10x17 + 9x18 = Rs. 711/ TC = Rs. 711 using VAM 1 iteration with same cost as Optimum &

unique
22

Test for optimality: (MODIs method)

Step 1: Finding out values of uis & vjs where Cij = ui + vj (only for occupied cells) Let u2 = 0 (since max. number of allocations are in row 2) C14 = u1 + v4 C21 = u2 + v1 C23 = u2 + v3 C24 = u2 + v4 C32 = u3 + v2 C33 = u3 + v3
23

 Table 1:
P
A 21 B (6) 17 C (10) 18 (9) 16 (3) 14 23 (4) 23 13

S
(11) 13

Supply

Uis

11

U1 = -10

U2 =0 U3= 4

32
deman d 6 10

17
12

18
15

41

19
43

Vjs

V1=17

V2=13

V3=14

V4= 23

24

Step 2: Finding out opportunity cost ij = Cij (ui + vj) (only for unoccupied cells) 11 = C11 (u1 + v1) = +14 12 = C12 (u1 + v2) = +3 13 = C13 (u1 + v3) = +19 22 = C22 (u2 + v2) = +5 31 = C31 (u3 + v1) = +11 34 = C34 (u3 + v4) = +14

25

Iteration I:
P A +14 21 B (6) 17 Q +3 16 +5 (3) 18 14 R S +19 (11) 23 (4) 23 13 13 11 Supply

Uis

U1 = -10

U2 =0 U3= 4

+11 (10)
32 17 10

(9)
18 12 15

+14
41 19 43

deman d

Vjs

V1=17

V2=13

V3=14

V4= 23

Here all ijs are > 0. Hence this is the optimal

solution.

26

P A 21

S (11)

Supply

16

23

13

11

(6)
17 18 (10) 32 17 10

(3)
14 (9) 18 12

(4)
23 13

41 15

19 43

deman d

Optimal cost/Minimum cost = Rs. 711/27

 Find out the optimal transportation schedule in the

following case.
Sourc es 1 1 2 3 Dema nd 5 8 5 10 Destinations 2 4 3 9 40 3 2 5 4 20 4 6 7 6 30 Capac ity 20 30 50

Total cost using VAM = 10 x 4 + 10 x 2 + 30 x 3 + 10 x 5 + 10 x 9 + 30 x 4 = Rs. 420/No. of occupied cells = 6 = m + n - 1

On solving for optimality, the first iteration itself gives all ijs > 0. hence this itself is the

optimum solution and optimal cost is Rs. 420/-

 Example 2: Solve the transportation problem for

minimization.
Sources
1 1 2 2 4

Destinations
2 6 1 3 3 2 Capacity 15 25

3
Demand

7
30

3
20

5
25

35
75

30