Distribution Models

Transportation Problem
 The transportation problem arises frequently in planning for
the distribution of goods and services from several supply
locations to several demand locations.

 Typically, the quantity of goods available at each supply location

(origin) is limited, and the quantity of goods needed at each of
several demand locations (destinations) is known.

 The usual objective in a transportation problem is to

minimize the cost of shipping goods from the origins to
the destinations.
EXAMPLE 1
 Consider the transportation problem faced by Foster Generators.
This problem involves the transportation of a product from three
plants to four distribution centers. Foster Generators operates
plants in Cleveland, Ohio; Bedford, Indiana; and York, Pennsylvania.
 Production capacities over the next three-month planning period
for one particular type of generator are as follows:

Three-Month
Origin Plant Production Capacity
(units)
1 Cleveland 5,000
2 Bedford 6,000
3 York 2,500
TOTAL 13,500
EXAMPLE 1
 The firm distributes its generators through four regional distribution
centers located in Boston, Chicago, St. Louis, and Lexington; the
three-month forecast of demand for the distribution centers is as
follows:
Distribution Three-Month Demand
Destination
Center Forecast (units)
1 Boston 6,000
2 Chicago 4,000
3 St. Louis 2,000
4 Lexington 1,500
TOTAL 13,500

 Management would like to determine how much of its production

should be shipped from each plant to each distribution center.
EXAMPLE 1
 For Foster’s transportation problem, the objective is to determine
the routes to be used and the quantity to be shipped via each route
that will provide the minimum total transportation cost.
 The cost for each unit shipped on each route is as follows:

Destination
Origin Boston Chicago St. Louis Lexington
Cleveland 3 2 7 6
Bedford 7 5 2 3
York 2 5 4 5
EXAMPLE 1 Distribution Centers
Plants (Origins) (destination)
1 6000
1 3 Boston
5000 Cleveland 2
7
6

2
Chicago 4000
7
2 5
6000 Bedford 2
3
3 2000
2 St. Louis
5

3 4
2500 York 5
4 1500
Lexington

Supplies Demands
Linear Programming Model
 For the general linear programming model of a transportation
problem with m origins and n destinations, we use the
following notation:

xij = number of units shipped from origin i to destination j

cij = cost per unit of shipping from origin i to destination j
si = supply or capacity in units at origin i
dj = demand in units at destination j

where i = 1,2,…,m and j = 1,2,…,n

Linear Programming Model
 The linear programming model is as follows:
TRANSPORTATION TABLEAU

To Destination
Source
D1 D2 … Dj … Dn
Supply
From Source
S1 C11 C12 C1n a1
x11 x12 x1n
S2 C21 C22 C2n a2
x21 x22 x2n
… Si … Cij … ai …
xij
Sm Cm1 Cm2 Cmn am
xm1 xm2 xmn
sum of ai
Destination
b1 b2 … bj … an
Requirements
sum of bi
ASSUMPTIONS
 The Requirements Assumption
Each source has a fixed supply of units, where this entire supply
must be distributed to the destinations. (We let si denote the
number of units being supplied by source i, for i = 1, 2, . . . , m)
Similarly, each destination has a fixed demand for units, where this
entire demand must be received from the sources. (We let dj
denote the number of units being received by destination j, for
j = 1, 2, . . . , n.)
ASSUMPTIONS
 The Cost Assumption
The cost of distributing units from any particular source to any
particular destination is directly proportional to the number of units
distributed. Therefore, this cost is just the unit cost of distribution
times the number of units distributed. (We let cij denote this unit
cost for source i and destination j.)
ASSUMPTIONS
 The model: Any problem (whether involving transportation
or not) fits the model for a transportation problem if it can be
described completely in terms of a parameter table and it
satisfies both the requirements assumption and the cost
assumption. The objective is to minimize the total cost of
distributing the units. All the parameters of the model are
included in this parameter table.
PROPERTIES
 The feasible solutions property
A transportation problem will have feasible solutions if and
only if

 Integer solutions property

For transportation problems where every si and dj have an
integer value, all the basic variables (allocations) in every basic
feasible (BF) solution (including an optimal one) also have
integer values.
EXAMPLE 2
 MG Auto has three plants in Los Angeles, Detroit, and New Orleans,
and two major distribution centers in Denver and Miami. The
capacities of the three plants during the next quarter are 1000,
1500, and 1200 cars. The quarterly demands at the two distribution
centers are 2300 and 1400 cars. The mileage chart between the
plants and the distribution centers, and their corresponding
transportation costs are as follows:
Mileage Transportation Cost
per Car
Denver Miami Denver Miami
Los Angeles 1000 2690 $80 $215
Detroit 1250 1350 $100 $108
New Orleans 1275 850 $102 $68
EXAMPLE 2
 Transportation Tableau

Denver Miami Supply

Los Angeles 80 215 1000
x11 x12
Detroit 100 108 1500
x21 x22
New 102 68 1200
Orleans x31 x32
Demand 2300 1400
Other Problem Variations
 Total Supply Not Equal to Total Demand
If total supply exceeds total demand, no modification in the linear
programming formulation is necessary. Excess supply will appear
as slack in the linear programming solution. Slack for any particular
origin can be interpreted as the unused supply or amount not
shipped from the origin.

If total supply is less than total demand, the linear programming

model of a transportation problem will not have a feasible solution.
In this case, we modify the network representation by adding a
dummy origin with a supply equal to the difference between the
total demand and the total supply.
Other Problem Variations
 Maximization Objective Function
The objective is to find a solution that maximizes profit or revenue.
Using the values for profit or revenue per unit as coefficients in the
objective function, we simply solve a maximization rather than a
minimization linear program. This change does not affect the
constraints.
Other Problem Variations
 Route Capacities or Route Minimums
The linear programming formulation of the transportation problem
also can accommodate capacities or minimum quantities for one or
more of the routes.

 Unacceptable Routes
Establishing a route from every origin to every destination may not
be possible. To handle this situation, we simply drop the
corresponding arc from the network and remove the
corresponding variable from the linear programming formulation.
SOLVING TRANSPORTATION MODEL
TRANSPORTATION ALGORITHM
 The transportation algorithm follows the exact steps of the
simplex method. However, instead of using the regular simplex
tableau, we take advantage of the special structure of the
transportation model to organize the computations in a more
convenient form.
TRANSPORTATION ALGORITHM
 STEP 1
Determine a starting basic feasible solution, and go to step 2

 STEP 2
Use the optimality condition of the simplex method to determine
the entering variable from among all the nonbasic variables. If the
optimality condition is satisfied, stop. Otherwise, go to step 3.

 STEP 3
Use the feasibility condition of the simplex method to determine
the leaving variable from among all the current basic variables , and
find the new basic solution. Return to step 2.
ILLUSTRATION
 SunRay Transport Company ships truckloads of grain from three
silos to four mills. The supply (in truckloads) and the demand (also
in truckloads) together with the unit transportation cost per
truckload on the different routes are summarized below. The unit
transportation costs, cij are in hundreds of dollars. The model seeks
the minimum-cost shipping schedule xij between silo i and mill j.
Mill Supply
1 2 3 4
1 10 2 20 11 15
X11 X12 X13 X14

Silo 2 12 7 9 20 25
X21 X22 X23 X24
3 4 14 16 18 10
X31 X32 X33 X34
Demand 5 15 15 15
DETERMINATION OF THE STARTING
SOLUTION
 A general transportation model with m sources and n
destinations has m+n constraint equations, one for each
source and each destination. However, because the
transportation model is always balances, one of these
equations is redundant. Thus, the model has m+n-1
independent constraint equations, which means that the
starting basic solution consists of m+n-1 basic variables.
DETERMINATION OF THE STARTING
SOLUTION
 The special structure of the transportation problems allows
securing a nonartificial starting basic solution using one of
three methods:

A. Northwest-corner method
B. Least-cost method
C. Vogel approximation method
DETERMINATION OF THE STARTING
SOLUTION
 The three methods differ in the “quality” of the starting basic
solution they produce, in the sense that a better starting
solution yields a smaller objective value. In general, though not
always, the Vogel method yields the best starting basic solution,
and the northwest-corner method yields the worst. The
tradeoff is that the northwest-corner method involves the
least amount of computations.
NORTHWEST-CORNER METHOD
 The method starts at the northwest-corner cell (route) of the tableau.

 STEP 1: Allocate as much as possible to the selected cell, and adjust the
associated amounts of supply and demand by subtracting the allocated
amount.

 STEP 2: Cross out the row or column with zero supply and demand to
indicate the no further assignments can be made in that row or column. If
both a row and a column net to zero simultaneously, cross out one only,
and leave a zero supply (demand) in the uncrossed-out row (column).

 STEP 3: If exactly one row or column is left uncrossed out, stop.

Otherwise, move to the cell to the right if a column has just been crossed
out or below if a row has been crossed out. Go to step 1.
NORTHWEST-CORNER METHOD
Mill Supply

1 2 3 4

1 10 2 20 11 15
5 10

2 12 7 9 20 25
Silo 5 15 5

3 4 14 16 18 10
10

Demand 5 15 15 15
LEAST-COST METHOD
 The least-cost method finds a better starting solution by concentrating on
the cheapest routes. The method assigns as much as possible to the cell
with the smallest unit cost (ties are broken arbitrarily). Next, the satisfied
row or column is crossed out and the amounts of supply and demand are
adjusted accordingly. If both a row and a column are satisfied
simultaneously, only one is crossed out, the same as in the northwest-
corner method. Next, look for the uncrossed-out cell with the smallest
unit cost and repeat the process until exactly one row or column is left
uncrossed out.
LEAST-COST METHOD
Mill Supply

1 2 3 4

1 10 2 20 11 15
15 0

2 12 7 9 20 25
Silo 15 10

3 4 14 16 18 10
5 5

Demand 5 15 15 15
VOGEL APPROXIMATION METHOD (VAM)
 VAM is an improved version of the least-cost method that generally, but
not always, produces better starting solutions.

 VAM is based on the concept of penalty cost or regret. If a decision maker

incorrectly chooses from several alternative courses of action, a penalty
may be suffered (and the decision maker may regret the decision that was
made). In a transportation problem, the courses of action are the
alternative routes, and a wrong decision is allocating to a cell that does not
contain the lowest cost.
VOGEL APPROXIMATION METHOD (VAM)
 STEP 1: For each row (column), determine a penalty measure by
subtracting the smallest unit cost element in the row (column) from the
next smallest unit cost element in the same row (column).

 STEP 2: Identify the row or column with the largest penalty. Break ties
arbitrarily. Allocate as much as possible to the variable with the least unit
cost in the selected row or column. Adjust the supply and demand, and
cross out the satisfied row or column. If a row and a column are satisfied
simultaneously, only one of the two is crossed out, and the remaining row
(column) is assigned zero supply (demand).
VOGEL APPROXIMATION METHOD (VAM)
 STEP 3:
a. If exactly one row or column with zero supply or demand remains
uncrossed out, stop.
b. If one row (column) with positive supply (demand) remains uncrossed
out, determine the basic variables in the row (column) by the least-
cost method. Stop.
c. If all the uncrossed out rows and columns have (remaining) zero
supply and demand, determine the zero basic variables by the least-
cost method. Stop.
d. Otherwise, go to step 1.
 VOGEL APPROXIMATION METHOD (VAM)
Mill Supply
Row
1 2 3 4
Penalty
1 10 2 20 11 15
10 – 2 = 8

2 12 7 9 20 25 9–7=2
Silo

3 4 14 16 18 10 14 – 4 = 10
5

Demand 5 15 15 15
Column 10 – 4 7–2 16 – 9 18 – 11
Penalty =6 =5 =7 =7
 VOGEL APPROXIMATION METHOD (VAM)
Mill Supply
Row
1 2 3 4
Penalty
1 10 2 20 11 15
11 – 2 = 9
15

2 12 7 9 20 25 9–7=2
Silo

3 4 14 16 18 10 16 – 14 = 2
5

Demand 5 15 15 15
Column 7–2 16 – 9 18 – 11
-
Penalty =5 =7 =7
 VOGEL APPROXIMATION METHOD (VAM)
Mill Supply
Row
1 2 3 4
Penalty
1 10 2 20 11 15
20 – 11 = 9
15

2 12 7 9 20 25 20 – 9 =11
Silo 15

3 4 14 16 18 10 18 – 16 = 2
5

Demand 5 15 15 15
Column 16 – 9 18 - 11
- -
Penalty =7 =7
 VOGEL APPROXIMATION METHOD (VAM)
Mill Supply
Row
1 2 3 4
Penalty
1 10 2 20 11 15
-
15 0

2 12 7 9 20 25 -
Silo 15 10

3 4 14 16 18 10 -
5 5

Demand 5 15 15 15
Column
- - - -
Penalty
EXAMPLE
 Given a transportation problem with the following costs,
supply, and demand. Find the initial solution using the
northwest-corner rule, least-cost method and Vogel’s
approximation model.
To
From Supply
D E F
A 6 7 4 100
B 5 3 6 180
C 8 5 7 200

Demand 135 175 170

EXAMPLE
 Given a transportation problem with the following costs,
supply, and demand. Find the initial solution using the
northwest-corner rule, least-cost method and Vogel’s
approximation model.
TO
A B C Capacity
FROM
D 5 4 3 100
E 8 4 3 300
F 9 7 5 300

Demand 300 200 200

ITERATIVE COMPUTATIONS OF THE
TRANSPORTATION ALGORITHM
 The basic solution principle in a transportation problem is to
determine whether a transportation route not at present
being used (i.e., an empty cell) would result in a lower total
cost if it were used.
ITERATIVE COMPUTATIONS OF THE
TRANSPORTATION ALGORITHM
After determining the starting solution (using any of the three
methods), we use the following algorithm to determine the
optimal solution:

 STEP 1
Use the simplex optimality condition to determine the entering
variable as the current nonbasic variable that can improve the
solution. If the optimality condition is satisfied, stop. Otherwise, go
to step 2.

 STEP 2
Determine the leaving variable using the simplex feasibility condition.
Change the basis, and return to step 1.
ITERATIVE COMPUTATIONS OF THE
TRANSPORTATION ALGORITHM
The incoming arc is the currently unused route (unoccupied
cell) where making a flow allocation will cause the largest per-
unit reduction in total cost. Flow is then assigned to the
incoming arc, and the amounts being shipped over all other arcs
to which flow had previously been assigned (occupied cells) are
adjusted as necessary to maintain a feasible solution. In the
process of adjusting the flow assigned to the occupied cells, we
identify and drop an outgoing arc from the solution.
ITERATIVE COMPUTATIONS OF THE
TRANSPORTATION ALGORITHM
Thus, at each iteration, we bring a currently unused arc
(unoccupied cell) into the solution, and remove an arc to which
flow had previously been assigned (occupied cell) from the
solution.

To identify incoming arc, we must compute for each unused arc

the amount by which total cost will be reduced by shipping one
unit over that arc. The modified distribution or MODI method is
a way to make this computation.
OPTIMALITY TEST
 Optimality test:
A BF solution is optimal if and only if cij – ui – vj ≥ 0 for every
(i, j) such that xij is nonbasic.

 Since cij – ui – vj is required to be zero if xij is a basic variable,

ui and vj satisfy the set of equations cij = ui + vj for each (i, j)
such that xij is basic.

Note: cij – ui – vj provides the change in total cost per unit that will be obtained by allocating
one unit of flow to the corresponding arc.Thus, we will call this the net evaluation index.
OPTIMALITY TEST
 ui  multiple of original row i that has been subtracted
(directly or indirectly) from original row 0 by the simplex
method during all iterations leading to the current simplex
tableau

 vi  multiple of original row m+j that has been subtracted

(directly or indirectly) from original row 0 by the simplex
method during all iterations leading to the current simplex
tableau
OPTIMALITY TEST
 Using the starting basic solutions derived through Northwest-
Corner Method, compute for ui and vi .

Mill Supply

1 2 3 4

1 10 2 20 11 15
5 10

2 12 7 9 20 25
Silo 5 15 5

3 4 14 16 18 10
10

Demand 5 15 15 15
OPTIMALITY TEST
 basic variables satisfies cij = ui + vj
Transportation
Basic variable ui vj
cost
x11 c11 = 10 u1 = 0 v1 = 10
x12 c12 = 2 u1 = 0 v2 = 2
x22 c22 = 7 u2 = 5 v2 = 2
x23 c23 = 9 u2 = 5 v3 = 4
x24 c24 = 20 u2 = 5 v4 = 15
x34 c34 = 18 u3 = 3 v4 = 15
OPTIMALITY TEST
 A BF solution is optimal if and only if cij – ui – vj ≥ 0 for every (i, j)
such that xij is nonbasic. After computing for cij – ui – vj, we now
conclude that the starting basic solution is not optimal.

Nonbasic Transportation
ui vj cij – ui – vj
variable cost
x13 c13 = 20 u1 = 0 v3 = 4 16
x14 c14 = 11 u1 = 0 v4 = 15 -4
x21 c21 = 12 u2 = 5 v1 = 10 -3
x31 c31 = 4 u3 = 3 v1 = 10 -9
x32 c32 = 14 u3 = 3 v2 = 2 9
x33 c33 = 16 u3 = 3 v3 = 4 9
ITERATION
 Iteration:
STEP 1. Determine the entering basic variable: Select the nonbasic
variable xij having the largest (in absolute terms) negative value of
cij – ui – vj.

STEP 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, select the basic variable
having the smallest value.

STEP 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.
ITERATION
 Iteration:
STEP 1. Determine the entering basic variable: Select the nonbasic
variable xij having the largest (in absolute terms) negative value of
cij – ui – vj.
Nonbasic Transportation
ui vj cij – ui – vj
variable cost
x13 c13 = 20 u1 = 0 v3 = 4 16
x14 c14 = 11 u1 = 0 v4 = 15 -4
x21 c21 = 12 u2 = 5 v1 = 10 -3
x31 c31 = 4 u3 = 3 v1 = 10 -9
x32 c32 = 14 u3 = 3 v2 = 2 9
x33 c33 = 16 u3 = 3 v3 = 4 9
ITERATION
 The selection of x31 as the entering variable means that we want to
ship through this route because it reduces the total shipping cost.
ITERATION
 STEP 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, select the basic variable
having the smallest value.
Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

5 10
2 x21 12 x22 7 x23 9 x24 20 25
Silo 5 15 5

3 x31 4 x32 14 x33 16 x34 18 10

10

Demand 5 15 15 15
ITERATION
 For STEP 2:
If route xij (the entering variable) ships θ units, then the maximum
value of θ is determined based on two conditions.

a. Supply limits and demand requirements remain satisfied.

b. Shipments through all routes remain nonnegative.
ITERATION
 For STEP 2:
These two conditions determine the maximum value of θ and the
leaving variable in the following manner:

FIRST
Construct a closed loop that starts and ends at the entering variable
cell.

The loop consists of connected horizontal and vertical segments

only.

Except for the entering variable cell, each corner of the closed loop
must coincide with a basic variable.
ITERATION
 STEP 2. Determine the leaving basic variable

Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

5 10
2 x21 12 x22 7 x23 9 x24 20 25
Silo 5 15 5

3 x31 4 x32 14 x33 16 x34 18 10

10

Demand 5 15 15 15
ITERATION
 For STEP 2:
These two conditions determine the maximum value of θ and the
leaving variable in the following manner:

NEXT
Assign the amount θ to the entering variable cell.

For the supply and demand limits to remain satisfied, we must

alternate between subtracting and adding the amount θ at the
successive corners of the loop.

Immaterial whether the loop is traced in a clockwise or

counterclockwise direction
ITERATION
 STEP 2. Determine the leaving basic variable

Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

5 -θ 10 + θ
2 x21 12 x22 7 x23 9 x24 20 25
Silo 5 -θ 15 5 +θ

3 x31 4 x32 14 x33 16 x34 18 10

+θ 10 -θ

Demand 5 15 15 15
ITERATION
 STEP 2. Determine the leaving basic variable. From the donor cells
(encircled cells), select the basic variable having the smallest value.
In case of ties, break arbitrarily.
Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

5 -θ 10 + θ
2 x21 12 x22 7 x23 9 x24 20 25
Silo 5 -θ 15 5 +θ

3 x31 4 x32 14 x33 16 x34 18 10

+θ 10 -θ

Demand 5 15 15 15
ITERATION
 STEP 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.
Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

5 -5 10 +5

2 x21 12 x22 7 x23 9 x24 20 25

Silo 5 -5 15 5 +5

3 x31 4 x32 14 x33 16 x34 18 10

5 10 -5

Demand 5 15 15 15
ITERATION
 The new transportation tableau

Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

15

2 x21 12 x22 7 x23 9 x24 20 25

Silo
0 15 10

3 x31 4 x32 14 x33 16 x34 18 10

5 5

Demand 5 15 15 15
OPTIMALITY TEST
 basic variables satisfies cij = ui + vj
Transportation
Basic variable ui vj
cost
x12 c12 = 2 u1 = 0 v2 = 2
x22 c22 = 7 u2 = 5 v2 = 2
x23 c23 = 9 u2 = 5 v3 = 4
x24 c24 = 20 u2 = 5 v4 = 15
x31 c31 = 4 u3 = 3 v1 = 1
x34 c34 = 18 u3 = 3 v4 = 15
OPTIMALITY TEST
 A BF solution is optimal if and only if cij – ui – vj ≥ 0 for every (i, j)
such that xij is nonbasic. After computing for cij – ui – vj, we now
conclude that the starting basic solution is still not optimal.

Nonbasic Transportation
ui vj cij – ui – vj
variable cost
x11 c11 = 10 u1 = 0 v1 = 1 9
x13 c13 = 20 u1 = 0 v3 = 4 16
x14 c14 = 11 u1 = 0 v4 = 15 -4
x21 c21 = 12 u2 = 5 v1 = 1 6
x32 c32 = 14 u3 = 3 v2 = 2 9
x33 c33 = 16 u3 = 3 v3 = 4 9
ITERATION
 Since the solution is still not optimal, perform another
iteration using your new transportation tableau.

Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

15

2 x21 12 x22 7 x23 9 x24 20 25

Silo
0 15 10

3 x31 4 x32 14 x33 16 x34 18 10

5 5

Demand 5 15 15 15
ITERATION
 Doing Step 1 to 3, we have the following solution:
Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

15 -10 10

2 x21 12 x22 7 x23 9 x24 20 25

Silo
0 +10 15 10 -10

3 x31 4 x32 14 x33 16 x34 18 10

5 5

Demand 5 15 15 15
ITERATION
 The new transportation tableau
Mill Supply

1 2 3 4

1 x11 10 x12 2 x13 20 x14 11 15

5 10

2 x21 12 x22 7 x23 9 x24 20 25

Silo
10 15

3 x31 4 x32 14 x33 16 x34 18 10

5 5

Demand 5 15 15 15
OPTIMALITY TEST
 basic variables satisfies cij = ui + vj
Transportation
Basic variable ui vj
cost
x12 c12 = 2 u1 = 0 v2 = 2
x14 c14 = 11 u1 = 0 v4 = 11
x22 c22 = 7 u2 = 5 v2 = 2
x23 c23 = 9 u2 = 5 v3 = 4
x31 c31 = 4 u3 = 7 v1 = -3
x34 c34 = 18 u3 = 7 v4 = 11
OPTIMALITY TEST
 A BF solution is optimal if and only if cij – ui – vj ≥ 0 for every (i, j)
such that xij is nonbasic. After computing for cij – ui – vj, we now
conclude that the starting basic solution is optimal.

Nonbasic Transportation
ui vj cij – ui – vj
variable cost
x11 c11 = 10 u1 = 0 v1 = -3 13
x13 c13 = 20 u1 = 0 v3 = 4 16
x21 c21 = 12 u2 = 5 v1 = -3 10
x24 c24 = 20 u2 = 5 v4 = 11 4
x32 c32 = 14 u3 = 7 v2 = 2 5
x33 c33 = 16 u3 = 7 v3 = 4 5
OPTIMAL SOLUTION

Number of
From SILO To MILL
Truckloads
1 2 5
1 4 10
2 1 10
2 3 15
3 1 5
3 4 5
Optimal Cost = $435
EXAMPLE 1
Factory
W1 W2 W3
Capacity
F1 20 18 25 24
F2 12 11 33 6
F3 17 17 40 11

Warehouse
15 10 10
Requirement
EXAMPLE 2
Plant
W1 W2 W3 W4
Capacity
P1 75 50 50 150 250
P2 90 120 140 75 200

Warehouse
125 110 110 165
Demand
EXAMPLE 3
Plant
W1 W2 W3
Capacity
P1 11 13 16 65
P2 10 7 9 120
P3 16 11 12 100
Warehouse
110 95 80
Demand
EXAMPLE 4
ABC Company supplies clothing materials to customers in three main
cities in the country. The company stores their products in two
warehouses: Warehouse A and Warehouse B. Demand forecasts for the
coming Christmas season are: Manila, 400 units; Davao, 200 units;
and Cebu, 300 units. Contracts to provide the following quantities have
been written: Warehouse A, 500 units; and Warehouse B, 400 units.
The distribution costs per unit (in thousands of pesos) are as follows:

TO
FROM
Manila Davao Cebu
Warehouse A 10 20 15
Warehouse B 12 15 18
QUESTIONS:
1. What is the initial cost of the problem using Northwest corner
method?
2. The initial solution is not yet optimal because cost can still
decrease by ______ per unit?
3. In the first tableau, the leaving variable is ______?
4. In the second tableau, how many units from Warehouse A should
be shipped to Cebu?
5. In the second tableau, how many units from Warehouse B should
be shipped to Davao?
6. What is the total cost of the second tableau?
7. In the third tableau, how many units from Warehouse B should be
shipped to Manila?
8. In the third tableau, how many units from Warehouse B should be
shipped to Cebu?
9. What is the total cost of the third tableau?
Assignment Problem
 The assignment problem arises in a variety of decision-making
situations; typical assignment problems involve assigning jobs
to machines, agents to tasks, sales personnel to sales
territories, contracts to bidders, and so on.

 “The best person for the job” is an apt description of the

assignment model.

 The situation can be illustrated by the assignment of workers

with varying degrees of skill to jobs. A job that happens to
match a worker’s skill costs less than one in which the
operator is not as skillful.
Assignment Problem
 A distinguishing feature of the assignment problem is that one
agent is assigned to one and only one task. Specifically, we
look for the set of assignments that will optimize a stated
objective, such as minimize cost, minimize time, or
maximize profits.

 The assignment problem is a special case of the transportation

problem in which all supply and demand values equal 1, and the
amount shipped over each arc is either 0 or 1.
EXAMPLE
 Consider the case of Fowle Marketing Research, which has just
received requests for market research studies from three
newclients. The company faces the task of assigning a project leader
(agent) to each client (task). Currently, three individuals have no
other commitments and are available for the project leader
assignments. Fowle’s management realizes, however, that the time
required to complete each study will depend on the experience and
ability of the project leader assigned. The three projects have
approximately the same priority, and management wants to assign
project leaders to minimize the total number of days required to
complete all three projects. If a project leader is to be assigned to
one client only, what assignments should be made?
EXAMPLE
 To answer the assignment question, Fowle’s management must first
consider all possible project leader–client assignments and then
estimate the corresponding project completion times. With three
project leaders and three clients, nine assignment alternatives are
possible. The alternatives and the estimated project completion
times in days are summarized below:

Client
Project Leader
1 2 3
Terry 10 15 9
Carle 9 18 5
McClymonds 6 14 3
EXAMPLE
Project Leaders Clients
(Origins) (destination)

1 1 10 Client 1
Terry 15 1
9

9
2 18 Client
1 Carle 2 1
5

6
14
3 Client
McClymonds 3 3
1 1

Supplies Demands
Linear Programming Model
 To show the general linear programming model for an
assignment problem with m agents and n tasks, we use the
following notation:

xij = 1 if agent i is assigned to task j; 0 otherwise

cij = cost of assigning agent i to task j

where i = 1,2,…,m and j = 1,2,…,n

Linear Programming Model
 The linear programming model is as follows:
Other Problem Variations
 Total number of agents (supply) not equal to the total
number of tasks (demand)
If the number of agents exceeds the number of tasks, the extra
agents simply remain unassigned in the linear programming solution.
If the number of tasks exceeds the number of agents, the linear
programming model will not have a feasible solution. In this situation,
a simple modification is to add enough dummy agents to equalize
the number of agents and the number of tasks.
Other Problem Variations
 A maximization objective function
If the assignment alternatives are evaluated in terms of revenue or
profit rather than time or cost, the linear programming formulation
can be solved as a maximization rather than a minimization problem.

 Unacceptable assignments
If one or more assignments are unacceptable, the corresponding
decision variable can be removed from the linear programming
formulation. This situation could happen, for example, if an agent did
not have the experience necessary for one or more of the tasks.
SOLVING ASSIGNMENT MODELS
THE ASSIGNMENT MODEL
 The general assignment model with n workers and n
jobs is as follows:

Jobs

1 2 … n

1 c11 c12 … c1n 1

2 c21 c22 … C2n 1

Worker
…
…

…
n cn1 cn2 … cnn 1

1 1 … 1
THE ASSIGNMENT MODEL
 The element cij represents the cost of assigning
worker i to job j where i, j = 1,2,…,n.

 There is no loss of generality in assuming that the

number of workers always equals the number of
jobs, because we can always add fictitious workers
or fictitious jobs to satisfy this assumption.
HUNGARIAN METHOD
 STEP 1
If the problem is
Minimization
For the original cost matrix, identify each row’s minimum,
and subtract it from all the entries of the row.

Maximization
For the original cost matrix, identify each row’s maximum,
and subtract all the entries of the row from this value.
HUNGARIAN METHOD
 STEP 2
For the matrix resulting from step 1, identify each
column’s minimum, and subtract it from all the entries of
the column.

 STEP 3
Identify the optimal solution as the feasible assignment
associated with the zero elements of the matrix obtained
in step 2.
HUNGARIAN METHOD
 If no feasible assignment (with all zero entries) can be
secured

(i) Draw the minimum number of horizontal and vertical

lines in the last reduced matrix that will cover all the
zero entries
(ii) Select the smallest uncovered entry, subtract it from
every uncovered entry, then add it to every entry at
the intersection of two lines.
(iii) If no feasible assignment can be found among the
resulting zero entries, repeat the steps (i) and (ii).
Otherwise, go to step 3 to determine the optimal
assignment.
EXAMPLE 1
Joe Klyne’s three children, John, Karen and Terri, want to
earn some money to take care of personal expenses
during a school trip to the local zoo. Mr. Klyne has chosen
three chores for his children: mowing the lawn, painting
the garage door, and washing the family cars. To avoid
anticipated sibling competition. He asks them to submit
(secret) bids for what they feel is fair pay for each of the
three chores. The understanding is that all three children
will abide by their father’s decision as to who gets which
chore. Based on the information on the next slide, how
should Mr. Klyne assign the chores?
EXAMPLE 1

Chores

Mow Paint Wash

John $15 $10 $9 1

Children Karen $9 $15 $10 1

Terri $10 $12 $8 1

1 1 1
EXAMPLE 1
 STEP 1
For the original cost matrix, identify each row’s minimum, and subtract
it from all the entries of the row.

Row
Mow Paint Wash
Minimum
John $15 $10 $9 p1 = 9

Karen $9 $15 $10 p2 = 9

Terri $10 $12 $8 p3 = 8

EXAMPLE 1
 STEP 2
For the matrix resulting from step 1, identify each column’s minimum,
and subtract it from all the entries of the column.

Mow Paint Wash

John 6 1 0

Karen 0 6 1

Terri 2 4 0
Column
q1 = 0 q2 = 1 q3 = 0
Minimum
EXAMPLE 1
 STEP 3
Identify the optimal solution as the feasible assignment associated
with the zero elements of the matrix obtained in step 2.

Mow Paint Wash

John 6 0 0

Karen 0 5 1

Terri 2 3 0
EXAMPLE 1
 The cells with encircled zero entries provide the
optimum solution.

John gets to paint the garage door

Karen gets to mow the lawn
Terri gets to wash the family cars
TOTAL COST = 9 + 10 + 8 = $27
EXAMPLE 2
Chore
Row
Minimum
1 2 3 4

1 $1 $4 $6 $3 p1 = 1

2 $9 $7 $10 $9 p2 = 7
Child
3 $4 $5 $11 $7 p3 = 4

4 $8 $7 $8 $5 p4 = 5
EXAMPLE 2
Chore

1 2 3 4

1 0 3 5 2

2 2 0 3 2
Child
3 0 1 7 3

4 3 2 3 0
Column Minimum q = 0 q2 = 0 q3 = 3 q3 = 0
1
EXAMPLE 2
Chore

1 2 3 4

1 0 3 2 2

2 2 0 0 2
Child
3 0 1 4 3

4 3 2 0 0

 No feasible assignment
EXAMPLE 2
Chore

1 2 3 4

1 0 3 2 2

2 2 0 0 2
Child
3 0 1 4 3

4 3 2 0 0
EXAMPLE 2
Chore

1 2 3 4

1 0 2 1 1

2 3 0 0 2
Child
3 0 0 3 2

4 4 2 0 0
EXAMPLE 3
You work as a sales manager for a toy manufacturer, and you
currently have three salespeople on the road meeting buyers.
Your salespeople are in Austin, TX; Boston, MA; and Chicago, IL.
You want them to fly to three other cities: Denver, CO;
Edmonton, Alberta; and Fargo, ND. The table below shows the
cost of airplane tickets in dollars between these cities.

From/To Denver Edmonton Fargo

Austin 250 400 350
Boston 400 600 350
Chicago 200 400 250

Where should you send each of your salespeople in order to

minimize airfare?
EXAMPLE 4
A construction company has four large bulldozers located at four
different garages. The bulldozers are to be moved to four
different construction sites. The distances in miles between the
bulldozers and the construction sites are given below.

Bulldozer/Site A B C D
1 90 75 75 80
2 35 85 55 65
3 125 95 90 105
4 45 110 95 115

How should the bulldozers be moved to the construction sites in

order to minimize the total distance traveled?
EXAMPLE 5
 YellowTaxi needs to assign 4 jobs to 4 workers. The cost of
performing a job is a function of the skills of the workers. The
table below summarizes the cost of the assignments. Worker 1
cannot do job 3 and worker 3 cannot do job 4. Determine the
optimal assignment using the Hungarian method.

Worker/Job A B C D

1 50 50 - 20

2 70 40 20 30

3 90 30 50 -

4 70 20 60 70