Module 4 AE4 Linear Programming Special Topics Transporations and Assignmernt Problems

MODULE 4
LINEAR PROGRAMMING:
SPECIAL TOPICS:
TRANSPORTATION AND
ASSIGNMENT PROBLEMS
LEARNING OUTCOMES:
• Identify a transportation problem and its assumptions.
• Generate an initial feasible solution by Northwest Corner
Rule.
• Employ the optimal solution using Stepping Stone
Method and MODI Method
• Provide specific instruction in the use of the
transportation model.
• Solve the assignment problem using Hungarian Method.
Department of Accountancy - Management Science
Source: Quantitative Techniques for Business Management
by Asuncion C. Mercado del Rosario
LEARNING CONTENTS:
• Transportation Problem
• Transportation Method (Stepping Stone)
• Transportation Problem (Supply Equals Demand)
• Transportation Problem: Demand Is Not Equal To Supply
• Transportation Problem: MODI Method
• Degeneracy
• The Assignment Problem

4.1.TRANSPORTATION PROBLEM
Types of Linear Programming Problems
1. Transportation Problem
2. Assignment Problem

4.1.TRANSPORTATION PROBLEM
• Refers to the problem of selecting routes in a product distribution
network involving several product sources and several product-
destinations with the objective of minimizing the total costs of
transporting the goods and the time involved as well as maximizing the
profit.
• Balanced – Supply equals the demand
• Unbalanced – Supply does not equal the demand
When supply does not equal the demand, it could be:
a. Demand is greater than the supply
b. Demand is less than the supply

4.2.TRANSPORTATION METHOD: STEPPING-STONE
• Step 1: Set up the transportation tableau
The transportation tableau contains all the relevant data.
• Step 2: Develop an initial solution
▪ It will serve as the starting point that will lead the development of an
improved solution.
▪ Northwest Corner Rule – a systematic and popular procedure used to
set up an initial feasible solution.
a. It is obtain by means of using the northwest corner rule has a
stairstep appearance.
b. Check for degeneracy by using formula:
No. of used cells = rim req. -1
• Step 3: Test the solution for improvement
▪ Determine whether the total transportation costs can still be reduced.
▪ 2 Alternatives Procedure for Evaluating the Unused Cells:
1. Stepping-Stone Method
Steps in evaluating any unused cells:
1. Choose the unused cell to be evaluated.
2. Start with the chosen unused cell, trace a close path back to the
original unused cell. There should be only one closed path for
each unused cell being evaluated.
3. Assign plus or minus signs alternately in either a clockwise or a
counter clockwise direction starting with a plus sign at the
chosen unused cell.
4. Determine the improvement index of each unused cell.
However, if all the indices are greater than (positive) or equal to
zero, an optimal solution has been reached.
2. MODI Method
• Step 4: Develop the improved solution
The negative improvement index represents the amount by which total
transportation costs could be reduced if that source-destination
combination route (cell) is used.

4.2. TRANSPORTATION PROBLEM (STEPPING STONE)
Steps in developing the improved solution:
a. Choose the unused cell with the most negative improvement index.
b. Retrace the closed path in evaluating the improvement index of
selected unused cell.
c. Choose the smallest stone in a negative position on the closed path,
add it to all cells (squares) on the closed path with plus signs and
subtract it from all cells (squares) on the path with minus signs.
Then check for optimality.
d. When the improvement indices are greater than or equal to zero the
optimal solution have been obtained. Conversely, if there are
negative improvement indices the optimal solution has not been
obtained
4.3.1.TRANSPORTATION METHOD: (SUPPLY EQUALS
DEMAND)
Sample Problem:
• A manufacturing company which owns three factories located at
different sites supplies three warehouses at three different
locations. Factory capacities and warehouse requirements are
given in Table 4.3.1. The cost of transporting the goods from each
source to each destination are given in Table 4.3.2. Find a
Transportation schedule that will yield the minimum
transportation costs using the stepping-stone method.

4.3.TRANSPORTATION METHOD: (SUPPLY EQUALS DEMAND)
Table 4.3.1 Factory capacities and warehouserequirements
Table 4.3.2 Cost of Transporting

• Step 1: Set up the Transportation Table (Table 4.3.3)

• Step 2: Develop an initial solution. (Table 4.3.4)

Total transportation costs of the initial solution is computed as follows:

The next step is to check for degeneracy.
Number of used cells = rim requirements – 1

5=6–1
5=5
If degeneracy does not exist, proceed to step 3

DEGENERACY (ADD A ZERO(0) STONE IF THE NO. OF STONE IS NOT EQUAL WITH THE RIM
REQUIREMENTS - 1
A B C
1 80 80
2 0 70 70
3 20 40 60
80 90 40 210
Department of Accountancy - Accounting 10 & 11 Intermediate

Accounting Part 2
Evaluation of the solution index of the unused cells:
F1W2 = F1W2 – F2W2 + F2W1 – F1W1
= 1000 – 3000 + 2000 – 500 = -500
F2W3 = F1W3 – F3W3 + F3W2 – F2W2 + F2W1 – F1W1
= 1000 – 1200 + 800 – 3000 + 2000 – 500 = -900
F2W3 = F2W3 – F3W3 + F3W2 – F2W2
= 2000 – 1200 + 800 – 3000 = -1400 <-Highest Negative Index
F3W1 = F3W1 – F3W2 + F2W2 – F2W1
= 500 – 800 + 3000 – 2000 = 700

Unused Cells:
F1W2 F2W3
F1W3 F3W1
30
20
20

Step 3: Test the solution for improvement
The most negative improvement index is -1400 w/c is the improvement
index of F2W3.
: 30 – 20 = 10
: 20 + 20 = 40
: 0 + 20 = 20
: 20 – 20 = 0

Table 4.3.5

The total transportation costs of the second solution is computed as
follows:
Total transpo. Cost = 35(500) + 10(200) + 10(3000) + 20(2000) + 40(800)
= 17,500 + 20,000 + 3,000 + 4,000 + 32,000
= P 139, 500
The total transportation costs of the second solution of P139, 500 is an
improvement upon the costs of the first solution which is P167,500.

4.3.TRANSPORTATION PROBLEM (SUPPLY EQUALS DEMAND)
• To determine whether a further improvement is possible go back to
step 3. Evaluate the improvement index of each of the unused cell of
table 4.3.5 using the stepping stone method.
Improvement index of F1W2 = 1000 – 3000 + 2000 – 500 = -500

Improvement index of F1W3 = 1000 – 2000 + 2000 – 500 = 500
Improvement index of F3W1 = 500 – 800 + 3000-2000 = 700
Improvement index of F3W3 = 1200 – 800 + 3000 – 2000 = 1400

4.3 TRANSPORTATION PROBLEM (SUPPLY EQUALS DEMAND)
• The most negative improvement index is -500 which is the improvement
index of F1W2. The solution can still be improved.
• Retrace the closed path n evaluating -500

4.3.TRANSPORTATION PROBLEM (SUPPLY EQUALS DEMAND)
Table 4.3.6 Third Solution(Optimal Solution

4.3.6.TRANSPORTATION PROBLEM (SUPPLY EQUALS DEMAND)
Total transportation costs = 25(500) + 10(1000) + 20(2000)
+ 20(2000) +40(800)
= P134,500
• The total transportation cost of the third improved solution is P134,500
which is lower than P139,500 of the previous solution. The next step is to
check for optimality.
• Improvement index of F1W3 = 1000 – 2000 + 2000 – 500 = 500
• Improvement index of F2W2 = 3000 – 2000 + 500 – 1000 = 500
• Improvement index of F3W1 = 500 – 500 + 1000 -800 = 200
• Improvement index of F3W3 = 1200–2000+2000–500+ 1000 -800 = 900

4.4 TRANSPORTATION PROBLEM (SUPPLY DOES NOT EQUAL DEMAND)
The unbalanced form of transportation problem
4.4.1 Supply LESS THAN Demand
4.4.2 Demand LESS THAN Supply

4.4.1 TRANSPORTATION PROBLEM (SUPPLY LESS THAN DEMAND)
Example 4.4.1
• Suppose a gravel and sand company which owns three plants A, B, and C
located at different places in Bulacan supplies gravel and sand to three
different projects R, S, and T in Metro Manila.
• Plants capacities and project requirements

Example 4.4.1
• Delivery costs per truckload
• Find the transportation schedule that will give the minimum costs. Using
the stepping-stone method.
Example 4.4.1
Table 4.4.0

Example 4.4.1
Table 4.4.1 (Initial Solution)

Example 4.4.1
• Total transportation costs:
= 45(2000) + 5(3000) + 55(3500) + 20(1000) + 40(2500) + 10 (0)
= 90,000 + 15,000 + 192,500 + 20,000 + 100,000 + 0
= P 417,500
• Check for degeneracy:

number of used cells = rim requirements – 1
6=7–1
6=6

Example 4.4.1
• Improvement Index Of:
AS = AS – BS + BR – AR
= 4000 – 3500 + 3000 – 2000 = 1500
AT = AT – CT + CS – BS + BR – AR
= 1500 – 2500 + 1000 – 3500 + 3000 – 2000 = - 2500
BT = BT – CT + CS – BS
= 4500 – 2500 + 1000 – 3500 = - 500
CR = CR – BR + BS – CS
= 4000 – 3000 + 3500 – 1000 = 3500
DR = DR – BR + BS – CS + CT – DT
= 0 - 3000 + 3500 – 1000 + 2500 – 0 = 2000
DS = DS – CS + CT – DT
= 0 – 1000 + 2500 – 0 = 1500
Example 4.4.1
• There are still negative improvement indices, the largest of which is -
2500. Next step is to retrace the closed path in evaluation -2500.
4
5
5
5
5
2 4
0 0

Table 4.4.2 (Improved Second Solution)

Example 4.4.1
= 5 (2000) + 45 (3000) + 40(1500) + 15(3500) + 60 (1000) + 10(0)
= P317,500
• The total transportation costs of P317,500 is much better than P417,500

Example 4.4.1
• Improvement Index Of:
AS = AS – BS + BR – AR = 4000 – 3500 + 3000 – 2000
= 1500
BT = BT – DT + DS – BS
= 4500 – 0 + 0 – 3500
= 1000
CR = CR – BR + BS – CS
= 4000 – 3000 + 3500 – 1000
= 3500
CT = CT – CS + BS - BR - AR -AT
= 2500 – 1000 + 3500 - 3000 + 2000 - 1500
= 2500
DR = DR + BR - BS + DS
= 0 +3000 - 3500 + 0
= -500
DS = DS –BS + BR – AR + AT - DT
= 0 -3500 + 3000 - 2000 + 1500 - 0
= -1000 Department of Accountancy - Management Science
Table 4.4.3 (Final or Optimal Solution)

= 45(1500) + 50(3000) + 10(3500) + 60(1000) +5(0) + 5(0)
= P312,500
• Table 4.4.3 is already the optimal solution with a total transportation
costs of P312,500.
• In looking at the optimal solution, 5 truckloads were sent to project S and
another to T which will never be transported. This means that projects S
and T are short of 5 truckloads each.

4.4.2 TRANSPORTATION PROBLEM (DEMAND LESS THAN SUPPLY)
Suppose a company which owns three plants located in three different
places supply three different projects in three different sites. Plant A can
supply 76 truckloads, Plant B, 82 and Plant C, 77, a total of 235 truckloads.
The projects need a total of 215 truckloads with project W needing 72
truckloads, project X needs 102 and project Y needs 41. The transportation
costs information is given on the next slide. Find a transportation program
that minimizes delivery costs.

Table 4.4.5 Delivery costs per truckload

Table 4.4.6 (Initial Feasible Solution)

Total transportation costs:
72(40) +4(80) + 82(240) + 16(160) + 41(240) + 20(0) = P35,280
Table 4.4.6 is not the optimal solution. Since there is no degeneracy

continue solving until the optimal solution is obtained.

Accounting Part 2
Table 4.4.7 (Optimal Solution)

4.4.7. TRANSPORTATION PROBLEM (DEMAND LESS THAN SUPPLY)
Total transportation costs:
76(80) + 21(240)+41(160)+20(0)+72(80)+5(160) = P24,240
Note that in the optimal solution 20 truckloads will not actually be
delivered since the project does not exist. This means that Plant B will
have an excess of 20 truckloads which will not be delivered anywhere.
With this information the manager knows not only the transportation
schedule to make but also which plant should not be utilized in full
capacity.

4.5. TRANSPORTATION PROBLEM: MODI METHOD
Steps in MODI Procedure
1. Set up the transportation table. Provide an additional row for the computed
Ri values, and an additional column for the computed Kj values.
2. Develop the initial solution using the northwest corner rule. Always check the
rim requirements and always compute the transportation cost
3. Test the solution for improvement. compute the values of Ri and Kj for each
solution using the formula:
Ri + Kj = Cij
Ri = computed value of column i
Kj = computed value of row j
Cij =cost at stone cell ij
Ri is always equal to zero
4. Develop an improved solution
Initial Solution
4.5.1. TRANSPORTATION PROBLEM: MODI METHOD

Initial Solution
Transportation Cost

Initial Solution
• The total transportation cost of initial feasible solution is P167,500
• Compute for the values of Ri and Kj of the stone cells in this solution
starting with the cell F1W1 using the formula Ri - Kj = Cij; Ri= 0 (Part 1)
F1W1: F2W1 : F2W2 :
R1 + K1 = 500 R2 + K1 = 2000 R2 + K2 = 3000
0 + K1 = 500 Substitute K1 = 500 Substitute R2 = 1500
K1 = 500 R2 + 500 = 2000 1500 + K2 = 3000
R2 = 2000 - 500 K2 = 3000 - 1500
R2 = 1500 K2 = 1500

Initial Solution
• The total transportation cost of initial feasible solution is P167,500
• Compute for the values of Ri and Kj of the stone cells in this solution
starting with the cell F1W1 using the formula Ri - Kj = Cij; Ri= 0 (Part 2)
F3W2 : F3W3 :
R3 + K2 = 800 R3 + K3 = 1200
Substitute K2 = 1500 Substitute R3 = -700
1500 + R3 = 800 - 1500 -700 + K3 = 1200
R3 = 800 - 1500 K3 = 1200 - (-700)
R3 = -700 K3 = 1900

Initial Solution
• Improvement index = Cij- Ri-Kj
• Then solve for improvement indices of the unused cells using the formula
Unused cells: Cij- Ri-Kj = improvement index
F1W2 : 1000 – 0 – 1500 = -500
F1W3 : 1000 – 0 – 1900 = -900
F2W3 : 2000 – 1500 – 1900 = -1400 << Highest Negative Index
F3W1 : 500 - (-700) – 500 = 700

4.5.1 TRANSPORTATION PROBLEM: MODI METHOD
Initial Solution
• Retraced Closed Path
• Evaluating -1400

Second Solution

Second Solution
• The rim requirements are satisfied, and the total transportation cost is
P139,500
• Evaluating Values of RI and KJ
F1W1: F2W1 : F2W2 :
R1 + K1 = 500 R2 + K1 = 2000 R2 + K2 = 3000
0 + K1 = 500 Substitute K1 = 500 Substitute R2 = 1500
K1 = 500 R2 + 500 = 2000 1500 + K2 = 3000
R2 = 2000 - 500 K2 = 3000 - 1500
R2 = 1500 K2 = 1500

Second Solution
• The rim requirements are satisfied, and the total transportation cost is
P139,500
• Evaluating Values of RI and KJ
F2W3 : F3W2 :
R3 + K3 = 2000 R3 + K2 = 800
1500 + K3 = 2000 Substitute K2 = 1500
K3 = 2000 + 15700 1500 + R3 = 800 - 1500
K3 = 500 R3 = 800 - 1500
R3 = -700

4.5.2.TRANSPORTATION PROBLEM: MODI METHOD
Second Solution
• Improvement indices of all unused cells
F1W2 : 1000 – 0 – 1500 = -500 << Negative Index
F1W3 : 1000 – 0 – 500 = 500
F3W1 : 500 – (-700) – 500 = 700
F3W3 : 1200 - (-700) – 500 = 1400

Second Solution
• Retraced Closed Path
• Evaluating -500

Third Solution (Final Solution)

4.5.3.TRANSPORTATION PROBLEM: MODI METHOD
R1+K1 =500 R1+K2=1000 R3+K2=800
0+ K1 = 500 0+K2=1000 R3 + 1000=800
K1 =500 K2 =1000 R3=800-1000
K3 =-200
R2+K1 =2000 R2+K3=2000
R2+500=2000 1500+K3=2000
R2=2000-500 K3=500
R2 =1500

• Improvement indices
F1W3 : 1000 – 0 – 500 = 500
F2W2 : 3000 – 1500 – 1000 = 500
F3W1 : 500 – (-200) – 500 = 200
F3W3 : 1200 - (-200) – 500 = 900
• The total transportation cost of the third solution is P134,500. the
requirements are satisfied.
• The third improved solution has no more negative improvement index,
therefore, it is the final solution.

4.6.DEGENERACY
• Degeneracy in transportation problems may occur either in the initial
feasible solution or in subsequent solutions.
4.6.1 Degeneracy in initial solution
• It exist in TP when the number of filled cells is less than the number of
rows plus the number of columns minus one.
m+n-1
• It may occur either in the initial feasible solution or in subsequent
solutions
4.6.2 Degeneracy in subsequent solution
• when a degeneracy appears in subsequent solutions, modify the
solutions so as to satisfy the rule of rim requirement – 1.
DEGENERACY IN THE SUBSEQUENT SOLUTION
A B C A B C
1 20 20 1 0 20 20
- +
2 30 20 50 2 50 0 50
+ -
3 10 20 30 3 30 30
+ -
50 30 20 100 50 30 20 100

Accounting Part 2
4.7 THE ASSIGNMENT PROBLEM
• The assignment problem is a special case of linear programming problem
in which the assignment schedule is on a One-on-One basis, and inn
which in the assignment tableau the number of rows equals the number
of columns.
• It is also known as Flood’s Technique or Hungarian method.
Steps in the Assignment Method

Step 1: Determine the opportunity table.
Step 2: Determine whether an optimal assignment can be reached.
Step 3: Revised the total opportunity cost table.

• The assignment problem is a special case of linear programming problem
in which the assignment schedule is on a One-on-One basis, and inn
which in the assignment tableau the number of rows equals the number
of columns.
• It is also known as Flood’s Technique or Hungarian method.
Steps in the Assignment Method

Step 1: Determine the opportunity table.
Step 2: Determine whether an optimal assignment can be reached.
Step 3: Revised the total opportunity cost table.

Example 4.7.1
• A machine shop currently has three jobs A, B, C to be done on three
machines W, X, Y. Any one of the job can be processed completely on any
one of the machines, and the assignment of jobs to machines must be
one-on-one basis. Find the job assignments that will minimize the total
costs.

Example 4.7.1
Table 4.7.1 (Cost Information)

Example 4.7.1
Job Opportunity Table
COLUMN COLUMN COLUMN
W X Y
250-150= 100 310-190= 120 350-170= 180
150-150= 0 200-190= 10 240-170= 70
220-150= 70 190-190= 0 170-170= 0

Example 4.7.1
Step 1: Determine the opportunity table
The smallest cost per column:

W P150
X P190
Y P170
Example 4.7.1
Table 4.7.1 (Job-Opportunity table)

Example 4.7.1
Machine Opportunity Cost
Row A 100-100= 0; 120-100= 20; 180-100= 80
Row B 0-0= 0; 10-0= 10; 70-0= 70
Row C 70-0= 70; 0-0= 0; 0-0= 0

Example 4.7.1
Table 4.7.2 (Machine Opportunity Cost Table)

Example 4.7.1
Step 2: Determine whether an optimal assignment can be made

Example 4.7.1

Step 3: Revise the total opportunity cost table. Select the smallest number

from all the numbers not covered by the lines. Subtract this number to all

the numbers covered by the lines and add to the numbers at the
intersection of two lines.
Revised Opportunity-Cost table
Example 4.7.1
Assigned Cost
A to W P250
B to X P200
C to Y P170
Total Assignment Cost P620

Example 4.7.2
• A company has three jobs to be done on four machines. Each job can only
be assigned to one and only one machine. The cost of each job on each
machine is given in the following table.

Example 4.7.2 – Solution
Step 1: Determine the opportunity-cost table

Table 4.7.7 (Machine-Opportunity Table)
Row A: 180 -180 = 0; 240 – 180 = 60

280 – 180 = 100; 320 – 180 = 140
Row B: 80 – 80 = 0; 130 – 80 = 50
170 – 80 = 90; 190 – 80 = 110
Row C: 100 -100 = 0; 150 – 100 = 50
190 – 100 = 90; 220 – 100 = 120


Table 4.7.7 (Machine-Opportunity Table)

Column W Column X Column Y Column Z
0–0=0 60 – 50 = 10 100 - 90 = 10 140 – 110 = 30
0-0=0 50 – 50 = 0 90 – 90 = 0 110 – 110 = 0
0–0=0 50 – 50 = 0 90 – 90 = 0 120 – 110 = 10
7 THE ASSIGNMENT PROBLEM

Assigned Cost
A to W P180
B to X P130
C to Y P190
Total Assignment Cost P500

REFERENCES:
Quantitative Techniques in Business Management/

Management Science by Asuncion C. Mercado del Rosario

THANK YOU
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MODULE 4

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Table 4.3.1 Factory capacities and warehouserequirements

Table 4.3.2 Cost of Transporting

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Number of used cells = rim requirements – 1

Department of Accountancy - Management Science

Department of Accountancy - Accounting 10 & 11 Intermediate

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Improvement index of F1W2 = 1000 – 3000 + 2000 – 500 = -500

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

• Check for degeneracy:

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

• The total transportation costs of P317,500 is much better than P417,500

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Table 4.4.6 is not the optimal solution. Since there is no degeneracy

Department of Accountancy - Accounting 10 & 11 Intermediate

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Management Science

Department of Accountancy - Accounting 10 & 11 Intermediate

Steps in the Assignment Method