Performance Management and

resource Optimization

6. Transport and Assignment

Problem
by

Muluken Tilahun
Lecturer , EiABC, AAU

BSc. IN CONSTRUCTION TECH. & MANAGEMENT, EiABC, MARCH

[Link] and Assignment Problems

• The Transportation Model

• Solution of a Transportation Problem
• The Assignment Model
• Solution of the Assignment Model
Transportation and Assignment Problems
Overview

Part of a larger class of linear programming problems

known as network flow models.

 Possess special mathematical features that enabled

development of very efficient, unique solution methods.

-Methods are variations of traditional simplex procedure.

 Transportation Model Example Problem
Definition and Data

Problem: How many tons of aggregate to transport from each quarry to

each site on a monthly basis in order to minimize the total cost of
transportation ?
-Data: Quarry Supply Site Demand
Quarry 1; 150 Site A: 200
Quarry 2: 175 Site B: 100
Quarry 3 275 Site C 300
Total 600
Transport tonsfrom quarry to
Cost Total 600
Project tons
site
Sources/Destination Site A Site B Site C
Quarry 1 6 8 10
Quarry 2 7 11 11
Quarry 3 4 5 12
 Transportation Model Example
Model Formulation

Minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A +

5x3B + 12x3C
where xij = tons of Agrregate from
subject to x1A + x1B + x1C = 150
each grain elevator, i, i = 1, 2, 3, to
x2A + x2B + x2C = 175 each mill j, j = A,B,C

x3A + x3B+ x3C = 275Transport Cost from quarry to Project

site
x1A + x2A + x3A = 200
Sources/Destination Site A Site B Site C
Quarry 1 6 8 10
x1B + x2B + x3B = 100 Quarry 2 7 11 11
Quarry 3 4 5 12
x1C + x2C + x3C = 300
xij  0
 Solution of the Transportation Model
Tableau Format
 Transportation problems are solved manually within a tableau format.
 Each cell in a transportation tableau is analogous to a decision variable
that indicates the amount allocated from a source to a destination.
 The supply and demand values along the outside rim of a tableau are
called rim values.

The Transportation
Tableau
 Solution of the Transportation Model
Solution Methods

 Transportation models do not start at the origin where all

decision values are zero; they must instead be given an initial
feasible solution.
 Initial feasible solution determination methods include:
northwest corner method
minimum cell cost method
 Vogel’s Approximation Method
 Methods for solving the transportation problem itself include:
 stepping-stone method or modified distribution
method.
The Northwest Corner Method
In the northwest corner method the largest possible allocation is made to the cell
in the upper left-hand corner of the tableau , followed by allocations to adjacent
feasible cells.

The Initial NW Corner

Solution

The initial solution is complete when all rim requirements are satisfied.
- Transportation cost is computed by evaluating the objective function:
Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A + 5x3B +
12x3C
= 6(150) + 8(0) + 10(0) + 7(50) + 11(100) + 11(25) + 4(0) + 5(0)
+ !2(275)
 The Northwest Corner Method
Summary of Steps

1. Allocate as much as possible to the cell in the upper left-

hand corner, subject to the supply and demand conditions.

2. Allocate as much as possible to the next adjacent feasible

cell.

3. Repeat step 2 until all rim requirements are met.

 1. Formulating Transportation Problems

E.g.2 : Suppose a power company which your are appointed to

manage has three electric power plants that supply the electric
needs of four cities.
The associated supply of each plant and demand of each city
is given in Table 1.
The cost of sending 1 million kwh of electricity from a plant
to a city depends on the distance the electricity must travel.
 Transportation tableau

• A transportation problem is specified by the supply, the

demand, and the shipping costs.
• So the relevant data can be summarized in a transportation
tableau.
• The transportation tableau implicitly expresses the supply
and demand constraints and the shipping cost between each
demand and supply point.
Table 1. Shipping costs, Supply, and
Demand
Transportation
Tableau
From To
City 1 City 2 City 3 City 4 Supply (Mi
kwh)
Plant 1 $8 $6 $10 $9 35
Plant 2 $9 $12 $13 $7 50
Plant 3 $14 $9 $16 $5 40
Demand 45 20 30 30
(Mi kwh)
 Solution

1. Decision Variable:
Since we have to determine how much electricity is sent
from each plant to each city;

Xij = Amount of electricity produced at plant i and sent to

city j

X14 = Amount of electricity produced at plant 1 and sent to

 2. Objective function

Since we want to minimize the total cost of shipping from

plants to cities;
Minimize Z = 8X11+6X12+10X13+9X14
+9X21+12X22+13X23+7X24
+14X31+9X32+16X33+5X34
 3. Supply Constraints

Since each supply point has a limited production capacity:

X11+X12+X13+X14 <= 35
X21+X22+X23+X24 <= 50
X31+X32+X33+X34 <= 40
 4. Demand Constraints

Since each city has a limited Demand, we do have

demand constraint functions:
X11+X21+X31 >= 45
X12+X22+X32 >= 20
X13+X23+X33 >= 30
X14+X24+X34 >= 30
 5. Sign Constraints
Since a negative amount of electricity cannot be shipped all
Xij’s must be nonnegative;

Xij >= 0 (I = 1,2,3; j = 1,2,3,4)

 LP Formulation of Power Co’s Problem
Min Z = 8X11+6X12+10X13+9X14+9X21+12X22+13X23+7X24
+14X31+9X32+16X33+5X34

S.t.: X11+X12+X13+X14 <= 35 (Supply Constraints)

X21+X22+X23+X24 <= 50
X31+X32+X33+X34 <= 40
X11+X21+X31 >= 45 (Demand Constraints)
X12+X22+X32 >= 20
X13+X23+X33 >= 30
X14+X24+X34 >= 30
General Description of a Transportation Problem

1. A set of m supply points from which a good is

shipped. Supply point i can supply at most si units.
2. A set of n demand points to which the good is
shipped. Demand point j must receive at least di
units of the shipped good.
3. Each unit produced at supply point i and shipped to
demand point j incurs a variable cost of cij.
Xij = number of units shipped from supply point
i to demand point j

i m j n
min  cijXij
i 1 j 1
j n
s.t. Xij  si (i  1,2,..., m)
j 1
i m

X
i 1
ij  dj ( j  1,2,..., n)

Xij  0(i  1,2,..., m; j  1,2,..., n)

 Balanced Transportation Problem

If total supply equals to total demand, the problem

is said to be a balanced transportation problem:

i m j n
 s i   dj
i 1 j 1
 Northwest Corner Method

To find the BFS by the NWC method:

• Begin in the upper left (northwest) corner of the
transportation tableau and set x11 as large as possible

(here the limitations for setting x 11 to a larger number,

will be the demand of demand point 1 and the supply of
supply point 1.
Accordingly, we can set x11=3 (meaning demand of demand point 1
is satisfied by supply point 1).

3 5 2 3

3 2

X 5 2 3
After we check the east and south cells, we saw that we can go east
(meaning supply point 1 still has capacity to fulfill some demand).

3 2 X

X 3 2 3

3 2 X

3 3

X X 2 3
After applying the same procedure, we saw that we can go south
this time (meaning demand point 2 needs more supply by
supply point 2).

3 2 X

3 2 1

X X X 3

3 2 X

3 2 1 X

X X X 2
Finally, we will have the following bfs, which is:
x11=3, x12=2, x22=3, x23=2, x24=1, x34=2

3 2 X

3 2 1 X

2 X

X X X X
 2. Minimum Cost Method
• The Northwest Corner Method does not utilize shipping
costs.
• It can yield an initial bfs easily but the total shipping cost
may be very high.
• The minimum cost method uses shipping costs in order to
come up with a bfs that has a lower cost.
• To begin the minimum cost method, first we find the
decision variable with the smallest shipping cost (Xij).
• Then assign Xij its largest possible value, which is the
minimum of si and dj
•After that, as in the Northwest Corner Method, we
should cross out row i and column j and reduce the
supply or demand of the non-crossed-out row or column
by the value of Xij.

•Then we will choose the cell with the minimum cost of

shipping from the cells that do not lie in a crossed-out
row or column and we will repeat the procedure.
An example for Minimum Cost Method
Step 1: Select the cell with minimum cost.

2 3 5 6
5

2 1 3 5
10

3 8 4 6
15

12 8 4 6
Step 2: Cross-out column 2

2 3 5 6
5

2 1 3 5
2
8

3 8 4 6
15

12 X 4 6
Step 3: Find the new cell with minimum shipping
cost and cross-out row 2

2 3 5 6
5

2 1 3 5
X
2 8
3 8 4 6
15

10 X 4 6
Step 4: Find the new cell with minimum shipping
cost and cross-out row 1

2 3 5 6
X
5
2 1 3 5
X
2 8
3 8 4 6
15

5 X 4 6
Step 5: Find the new cell with minimum shipping cost
and cross-out column 1

2 3 5 6
X
5
2 1 3 5
X
2 8
3 8 4 6
10
5

X X 4 6
Step 6: Find the new cell with minimum shipping cost and
cross-out column 3

2 3 5 6
X
5
2 1 3 5
X
2 8
3 8 4 6
6
5 4

X X X 6
Step 7: Finally assign 6 to last cell.
The bfs is found as: X11=5, X21=2, X22=8, X31=5, X33=4
and X34=6

2 3 5 6
X
5
2 1 3 5
X
2 8
3 8 4 6
X
5 4 6

X X X X
 The Minimum Cell Cost Method
(1 of 3)

In the minimum cell cost method as

much as possible is allocated to the cell
with the minimum cost followed by
allocation to the feasible cell with
minimum cost.

The Initial Minimum Cell Cost

Allocation

The Second Minimum Cell Cost Allocation

 The Minimum Cell Cost Method (2 of 3)
 The complete initial minimum cell cost solution; total cost = $4,550.

 The minimum cell cost method will provide a solution

with a lower cost than the northwest corner solution because
it considers cost in the allocation process.

The Initial Solution

The Minimum Cell Cost Method Summary of Steps
(3 of 3)

1. Allocate as much as possible to the feasible

cell with the minimum transportation cost,
and adjust the rim requirements.

2. Repeat step 1 until all rim requirements

have been met.
 Vogel’s Approximation Method (VAM)
(1 of 5)
Method is based on the concept of penalty cost or regret.

 A penalty cost is the difference between the minimum cell cost and the next largest
cell cost in a row (or column).

 In VAM the first step is to develop a penalty cost for each source and destination.

 Penalty cost is calculated by subtracting the minimum cell cost from the next higher
cell cost in each row and column.

The VAM Penalty Costs

 Vogel’s Approximation Method (VAM)
(2 of 5)

 VAM allocates as much as possible to the minimum cost cell in the

row or column with the largest penalty cost.

The Initial VAM

Allocation
Vogel’s Approximation Method (VAM)
(3 of 5)

 After each VAM cell allocation, all row and column penalty costs
are recomputed.

The Second VAM

Allocation
 Vogel’s Approximation Method (VAM)
(4 of 5)

 Recomputed penalty costs after the third allocation.

The Third VAM

Allocation
 Vogel’s Approximation Method (VAM)
(5 of 5)

 The initial VAM solution; total cost = $5,125

VAM and minimum cell cost methods both provide better initial solutions than doe
the northwest corner method.

The Initial VAM

Solution
 Vogel’s Approximation Method (VAM)
Summary of Steps

1. Determine the penalty cost for each row and column.

2. Select the row or column with the highest penalty cost.

3. Allocate as much as possible to the feasible cell with the lowest

transportation

cost in the row or column with the highest penalty cost.

4. Repeat steps 1, 2, and 3 until all rim requirements have been met.
Example 2 for Vogel’s Method
Step 1: Compute the penalties.

Supply Row Penalty

6 7 8
10 7-6=1

15 80 78
15 78-15=63

Demand 15 5 5

Column Penalty 15-6=9 80-7=73 78-8=70

Step 2: Identify the largest penalty and assign
the highest possible value to the variable.

Supply Row Penalty

6 7 8
5 8-6=2
5

15 80 78
15 78-15=63

Demand 15 X 5

Column Penalty 15-6=9 _ 78-8=70

Step 3: Identify the largest penalty and assign
the highest possible value to the variable.

Supply Row Penalty

6 7 8
0 _
5 5

15 80 78
15 _

Demand 15 X X

Column Penalty 15-6=9 _ _

Step 4: Identify the largest penalty and assign
the highest possible value to the variable.

Supply Row Penalty

6 7 8
X _
0 5 5

15 80 78
15 _

Demand 15 X X

Column Penalty _ _ _
Step 5: Finally the bfs is found as X11=0, X12=5,
X13=5, and X21=15

Supply Row Penalty

6 7 8
X _
0 5 5

15 80 78
X _
15

Demand X X X

Column Penalty _ _ _
 The Stepping-Stone Solution Method
(1 of 12)

 - Once an initial solution is derived, the problem must be solved using

either the stepping-stone method or the modified distribution method
(MODI).

 - The initial solution used as a starting point in this problem is the

minimum cell cost method solution because it had the minimum total cost of
the three methods used.

The Minimum Cell

Cost Solution
 The Stepping-Stone Solution Method
(2 of 12)

The stepping-stone method determines if there is a cell

with no allocation that would reduce cost if used.

The Allocation of One Ton to Cell 1A

 The Stepping-Stone Solution Method
(3 of 12)

 Must subtract one ton from another allocation along that

row.

The Subtraction of One

Ton from Cell 1B
 The Stepping-Stone Solution Method
(4 of 12)

 A requirement of this solution method is that units can only be

added to and subtracted from cells that already have allocations, thus
one ton must be added to a cell as shown.

The Addition of One Ton to

Cell 3B and the Subtraction
of One Ton from Cell 3A
 The Stepping-Stone Solution Method
(5 of 12)

 An empty cell that will reduce cost is a potential entering variable.

 To evaluate the cost reduction potential of an empty cell, a closed path

connecting used cells to the empty cells is identified.

The Stepping-Stone
Path for Cell 2A
 The Stepping-Stone Solution Method
(6 of 12)

 The remaining stepping-stone

paths and resulting computations
for cells 2B and 3C.

The Stepping-Stone
Path for Cell 2B
The Stepping-
Stone Path for
Cell 3C
 The Stepping-Stone Solution Method
(7 of 12)

 After all empty cells are evaluated, the one with the greatest cost reduction
potential is the entering variable.

 A tie can be broken arbitrarily.

The Stepping-Stone
Path for Cell 1A
 The Stepping-Stone Solution Method
(8 of 12)

 When reallocating units to the entering variable (cell), the amount is the
minimum amount subtracted on the stepping-stone path.

 At each iteration one variable enters and one leaves (just as in the simplex
method).

The Second Iteration of the

Stepping-Stone Method
 The Stepping-Stone Solution Method
(9 of 12)

 Check to see if the solution

is optimal.

The Stepping-Stone
Path for Cell 2A

The Stepping-
Stone Path for
Cell 1B
 The Stepping-Stone Solution Method
(10 of 12)

 Continuing check for optimality.

The Stepping-Stone
Path for Cell 2B
The Stepping-Stone
Path for Cell 3C
 The Stepping-Stone Solution Method
(11 of 12)

 The stepping-stone process is repeated until none of the

empty cells will reduce costs (i.e., an optimal solution).
 In example, evaluation of four paths indicates no cost
reductions, therefore Table 19 solution is optimal.
 Solution and total minimum cost :
x1A = 25 tons, x2C = 175 tons, x3A = 175 tons, x1C = 125 tons, x3B
= 100 tons
Z = $6(25) + 8(0) + 10(125) + 7(0) + 11(0) + 11(175) + 4(175) +
5(100) + 12(0) = $4,525
 The Stepping-Stone Solution Method
(12 of 12)
 A multiple optimal solution occurs when an empty cell has a cost
change of zero and all other empty cells are positive.
 An alternate optimal solution is determined by allocating to the
empty cell with a zero cost change.
 Alternate optimal total minimum cost also equals $4,525.

The
Alternative
Optimal
Solution
 The Stepping-Stone Solution Method
Summary of Steps

1. Determine the stepping-stone paths and cost changes for

each empty cell in the tableau.

2. Allocate as much as possible to the empty cell with the

greatest net decrease in cost.

3. Repeat steps 1 and 2 until all empty cells have positive cost
changes that indicate an optimal solution.
 The Unbalanced Transportation Model
(1 of 2)

 When demand exceeds supply a dummy row is added to

the tableau.

An Unbalanced
Model (Demand .
Supply)
 The Unbalanced Transportation Model
(2 of 2)

 When supply exceeds demand, a dummy column is added to the

tableau.
 The dummy column (or dummy row) has no effect on the initial
solution methods or the optimal solution methods.

An Unbalanced Model
(Supply . Demand)
 The Assignment Model Characteristics

 Special form of linear programming model similar to the

transportation model.

 Supply at each source and demand at each destination limited to one

unit.

 In a balanced model supply equals demand.

 In an unbalanced model supply does not equal demand.

Although the transportation simplex appears to be very
efficient, there is a certain class of transportation
problems, called assignment problems, for which the
transportation simplex is often very inefficient. For that
reason there is an other method called The Hungarian
Method. The steps of The Hungarian Method are as listed
below:

Step1. Find a bfs. Find the minimum element in each row

of the mxm cost matrix. Construct a new matrix by
subtracting from each cost the minimum cost in its row.
For this new matrix, find the minimum cost in each
column. Construct a new matrix (reduced cost matrix) by
subtracting from each cost the minimum cost in its
Step2. Draw the minimum number of lines (horizontal
and/or vertical) that are needed to cover all zeros in the
reduced cost matrix. If m lines are required , an optimal
solution is available among the covered zeros in the
matrix. If fewer than m lines are required, proceed to step
3.

Step3. Find the smallest nonzero element (call its value

k) in the reduced cost matrix that is uncovered by the
lines drawn in step 2. Now subtract k from each
uncovered element of the reduced cost matrix and add k
to each element that is covered by two lines. Return to
step2.
 The Assignment Model Example Problem
Definition and Data

Problem: Assign four teams of officials to four games in a way

that will minimize total distance traveled by the officials. Supply
is always one team of officials, demand is for only one team of
officials at each game.
 The Assignment Model Example Problem Model
Formulation

Minimize Z = 210xAR + 90xAA + 180xAD + 160xAC + 100xBR + 70xBA + 130xBD + 200xBC +

175xCR + 105xCA + 140xCD + 170xCC + 80xDR + 65xDA + 105xDD +120xDC
subject to
xAR + xAA + xAD+ xAC = 1
xBR + xBA + xBD + xBC = 1
xCR + xCA+ xCD + xCC = 1
xDR + xDA + xDD + xDC = 1
xAR + xBR + xCR + xDR = 1
xAA + xBA + xCA + xDA = 1
xAD+ xBD + xCD + xDD = 1
xAC + xBC + xCC + xDC = 1
x 0
Solution of the Assignment Model
(1 of 7)

 An assignment problem is a special form of the transportation problem

where all supply and demand values equal one.
 Example: assigning four teams of officials to four games in a way that will
minimize distance traveled by the officials.

The Travel Distances to Each Game for Each Team of Officials

 Solution of the Assignment Model
(2 of 7)

 An opportunity cost table is developed by first subtracting the minimum

value in each row from all other row values (row reductions) and then
repeating this process for each column.

The Assignment Tableau with Row Reductions

 Solution of the Assignment Model
(3 of 7)

 The minimum value in each column is subtracted from all column values
(column reductions).
 Assignments can be made in the table wherever a zero is present.
An optimal solution results when each of the four teams can be assigned to a
different game.
 Table 36 does not contain an optimal solution

The Tableau with Column Reductions

 Solution of the Assignment Model
(4 of 7)

 An optimal solution occurs when the number of independent unique

assignments equals the number of rows and columns.
 If the number of unique assignments is less than the number of rows (or
columns) a line test must be used.

The Opportunity Cost Table with the Line Test

 Solution of the Assignment Model
(5 of 7)
 In a line test all zeros are crossed out by horizontal and vertical lines; the
minimum uncrossed value is subtracted from all other uncrossed values and
added to values where two lines cross.

The Second Iteration

 Solution of the Assignment Model
(6 of 7)
- At least four lines are required to cross out all zeros in table 38.
- This indicates an optimal solution has been reached.
- Assignments and distances:
Assignment Distance Assignment Distance
Team A  Atlanta 90 Team A  Clemson 160
Team B  Raleigh 100 Team B  Atlanta 70
Team C  Durham 140 Team C  Durham 140
Team D  Clemson 120 Team D  Raleigh 80
Total 450 miles Total 450 miles
- If in initial assignment team A went to Clemson, result is the same; resulting
assignments represent multiple optimal solutions.
 Solution of the Assignment Model
(7 of 7)

 When supply exceeds demand, a dummy column is added to the tableau.

 When demand exceeds supply, a dummy row is added to the tableau.
 The addition of a dummy row or column does not affect the solution method.
 A prohibited assignment is given a large relative cost of M so that it will never
be selected.

An Unbalanced Assignment Tableau with a Dummy Column

 Solution of the Assignment Model Summary of
Solution Steps

1. Perform row reductions.

2. Perform column reductions.
3 In the completed opportunity cost table, cross out all zeros using the
minimum number of horizontal and/or vertical lines.
4. If fewer than m lines are required, subtract the minimum uncrossed
value from all other uncrossed values, and add the same value to all cells
where two lines intersect.
5. Leave all other values unchanged and repeat step 3.
6. If m lines are required, the tableau contains the optimal solution. If
fewer than m lines are required, repeat step 4.
Thank You