DISTRIBUTION MODELS
T RANSPORTATION M ODELS , T RANSSHIPMENT M ODELS AND A SSIGNMENT M ODELS
CRYSTAL JADE M. AGUILAR
[Link]@[Link]
BATANGAS STATE UNIVERSITY - THE NATIONAL ENGINEERING UNIVERSITY
October 20, 2024
I NTRODUCTION
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION A special type of a Linear Programming Problem in the area of physical distribution of
P ROBLEMS
T HE N ORTHWEST C ORNER goods and services coming from serveral supply locations that are to be delivered at
M ETHOD
T HE M INIMUM C OST OR L EAST demand centers is called the distribution model or distribution problem.
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD T YPES OF D ISTRIBUTION M ODELS
T HE S TEPPING S TONE M ETHOD
1 Transportation Model
2 Transshipment Model
3 Assignment Model
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T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD 1 T HE T RANSPORTATION M ODEL
T HE M INIMUM C OST
C OST M ETHOD
OR L EAST
Modelling a Transportation Problem
T HE VOGEL’ S A PPROXIMATION
M ETHOD
Solving Transportation Problems
T HE S TEPPING S TONE M ETHOD The Northwest Corner Method
The Minimum Cost or Least Cost Method
The Vogel’s Approximation Method
The Stepping Stone Method
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
D EFINITION
M ETHOD
T HE M INIMUM C OST OR L EAST The transportation model is formulated for a class of problems with the following unique
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION characteristics:
M ETHOD
T HE S TEPPING S TONE M ETHOD 1 A product is transported from a number of sources to a number of destinations at the
minimum possible cost; and
2 each source is able to supply a fixed number of units of the product, and each destination
has a fixed demand for the product.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL C HARACTERISTICS AND A SSUMPTIONS IN THE T RANSPORTATION P ROBLEM
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
The main objective of the transportation model is to determine the cheapest routes from
P ROBLEMS
the suppliers to the destinations. This exhibits the following characteristics and
T HE N ORTHWEST C ORNER
M ETHOD assumptions:
T HE M INIMUM C OST OR L EAST
C OST M ETHOD 1 SUPPLY OR SOURCES - certain sources have limited available quantity of one commodity.
T HE VOGEL’ S A PPROXIMATION
M ETHOD 2 DEMAND - the demand comes from several destinations, such as warehouses, distribution centers,
T HE S TEPPING S TONE M ETHOD
shops, etc.
3 QUANTITIES - the quantities available at each source and the demands of each destinations are
constant.
4 SHIPPING COST - is based on per unit cost of the commodity from the source to each destination.
It is usually based on the distance between two points.
5 It is assumed that there will be no shipments between source or between destinations as they will
require special adjustments to the transportation model.
6 Demand and supply quantities are presented in whole numbers.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
C OST M ETHOD D EFINITION
T HE VOGEL’ S A PPROXIMATION
M ETHOD
T HE S TEPPING S TONE M ETHOD
A transportation model in which supply exactly equals demand is referred to as balanced
transportation model.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL E XAMPLE
M ODELLING A T RANSPORTATION
P ROBLEM Wheat is harvested in the Midwest and stored in grain elevators in three different cities -
S OLVING T RANSPORTATION
P ROBLEMS Kansas City, Omaha, and Des Moines. These grain elevators supply three flour mills,
T HE N ORTHWEST C ORNER
M ETHOD located in Chicago, St. Louis, and Cincinnati. Grain is shipped to the mills in railroad cars,
T HE M INIMUM C OST
C OST M ETHOD
OR L EAST
each car capable of holding 1 ton of wheat.
T HE VOGEL’ S A PPROXIMATION
M ETHOD
T HE S TEPPING S TONE M ETHOD
Each grain elevator is able to supply the following number of tons (i.e., railroad cars) of
wheat to the mills on a monthly basis:
Grain Elevator Supply
1. Kansas City 150
2. Omaha 175
3. Des Moines 275
Total 600 tons
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS E XAMPLE
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
Each mill demands the following number of tons of wheat per month:
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD
Mill Demand
T HE S TEPPING S TONE M ETHOD
A. Chicago 200
B. Saint Louis 100
3. Cincinnati 300
Total 600 tons
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM E XAMPLE
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
The cost of transporting 1 ton of wheat from each grain elevator (source) to each mill
M ETHOD
T HE M INIMUM C OST OR L EAST
(destination) differs, according to the distance and rail system. These costs are shown in
C OST M ETHOD the following table:
T HE VOGEL’ S A PPROXIMATION
M ETHOD
T HE S TEPPING S TONE M ETHOD Grain Elevator A. Chicago B. St. Louis C. Cincinnati
1. Kansas City $6 $8 $10
2. Omaha 7 11 11
3. Des Moines 4 5 12
The problem is to determine how many tons of wheat to transport from each grain elevator
to each mill on a monthly basis to minimize the total cost of transportation.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
A diagram of the different transportation routes, with supply and demand, is given in
M ODEL Figure 1.
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD
T HE S TEPPING S TONE M ETHOD
F IGURE 1: Network for transportation routes for wheat shipments
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1 T HE T RANSPORTATION M ODEL
Modelling a Transportation Problem
Solving Transportation Problems
The Northwest Corner Method
The Minimum Cost or Least Cost Method
The Vogel’s Approximation Method
The Stepping Stone Method
T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
S OLUTION
P ROBLEMS
T HE N ORTHWEST C ORNER
DECISION VARIABLES:
M ETHOD
T HE M INIMUM C OST OR L EAST
x1A = tons of wheat grain elevator from Kansas City to mill in Chicago
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
x1B = tons of wheat grain elevator from Kansas City to mill in St. Louis
M ETHOD
x1C = tons of wheat grain elevator from Kansas City to mill in Cincinnati
T HE S TEPPING S TONE M ETHOD
x2A = tons of wheat grain elevator from Omaha to mill in Chicago
x2B = tons of wheat grain elevator from Omaha to mill in St. Louis
x2C = tons of wheat grain elevator from Omaha to mill in Cincinnati
x3A = tons of wheat grain elevator from Des Moines to mill in Chicago
x3B = tons of wheat grain elevator from Des Moines to mill in St. Louis
x3C = tons of wheat grain elevator from Des Moines to mill in Cincinnati
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION S OLUTION
M ODEL
M ODELLING
P ROBLEM
A T RANSPORTATION The linear programming model for this problem is formulated as follows:
S OLVING T RANSPORTATION
P ROBLEMS minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A + 5x3B + 12x3C
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST
C OST M ETHOD
OR L EAST x1A + x1B + X1C = 150
T HE VOGEL’ S A PPROXIMATION
M ETHOD x2A + x2B + X2C = 175
T HE S TEPPING S TONE M ETHOD
x3A + x3B + X3C = 275
x1A + x2A + X3A = 200
x1B + x2B + X3B = 100
x1C + x2C + X3C = 300
xij ≥ 0
where xij represent the number of tons of wheat transported from each grain elevator,
i = 1, 2, 3, to each mill j = A, B, C.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION The structure of the transportation problem is summarized in the following table:
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD
T HE S TEPPING S TONE M ETHOD
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD Realistically, however, supply exceeds the demand or demand exceeds the supply.
T HE M INIMUM C OST OR L EAST
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD
D EFINITION
T HE S TEPPING S TONE M ETHOD
A transportation model in which the supply is greater than to demand or demand is greater
than to supply is referred to unbalanced transportation model
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
S OLUTION
M ODEL
M ODELLING A T RANSPORTATION
In our wheat transportation example, if the demand at Cincinnati is increased from 300
P ROBLEM
S OLVING T RANSPORTATION
tons to 350 tons, a situation is created in which total demand is 650 tons and total supply
P ROBLEMS
is 600 tons. This will result in the following change in our linear programming model of this
T HE N ORTHWEST C ORNER
M ETHOD problem:
T HE M INIMUM C OST OR L EAST
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION minimize Z = $6x1A + 8x1B + 10x1C + 7x2A + 11x2B + 11x2C + 4x3A + 5x3B + 12x3C
M ETHOD
T HE S TEPPING S TONE M ETHOD
x1A + x1B + X1C = 150
x2A + x2B + X2C = 175
x3A + x3B + X3C = 275
x1A + x2A + X3A ≤ 200
x1B + x2B + X3B ≤ 100
x1C + x2C + X3C ≤ 350
xij ≥ 0
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION The structure of the transportation problem is summarized in the following table:
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD
T HE S TEPPING S TONE M ETHOD
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD T RANSPORTATION A LGORITHM
T HE M INIMUM C OST OR L EAST
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION 1 STEP 1. Arrange the problem in the transportation table.
M ETHOD
T HE S TEPPING S TONE M ETHOD 2 STEP 2. Obtain initial feasible solution.
3 STEP 3. Is the solution optimal? If yes the we obtain the final solution, and if not
determine a new solution.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ETHODS IN O BTAINING I NITIAL S OLUTION
M ODELLING A T RANSPORTATION
P ROBLEM 1 NORTHWEST CORNER METHOD - the most simple and logical method of finding the
S OLVING T RANSPORTATION
P ROBLEMS initial solution. The Procedure begins by allocating units to the upper left hand corner
T HE N ORTHWEST C ORNER
M ETHOD and ends in the lower right corner of the transportation problem
T HE M INIMUM C OST OR L EAST
C OST M ETHOD 2 MINIMUM COST METHOD - a systematic procedure that is easy to use and yields an
T HE VOGEL’ S A PPROXIMATION
M ETHOD initial solution that is close to the optimal solution in small problems. In this method, the
T HE S TEPPING S TONE M ETHOD
allocation is made to the cell with the most possible lowest cost (or the right highest profit
in a maximization case)
3 VOGEL’S APPROXIMATION METHOD (VAM) - is an algorithm that obtains the initial
feasible solution by determining “penalty cause" of not using the lowest cost route. This
method results in an optimal solution or near optimal as an inital solution.
4 STEPPING STONE METHOD - is a method erived from the analogy of crossing a pond
using stepping stones. That is, the entire transportation table is assumed to be a pond an
the occupied cells are the stones needed to make a certain movement within the pond.
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THE NORTHWEST CORNER METHOD
T HE N ORTHWEST C ORNER M ETHOD
T HE T RANSPORTATION
The procedure for constructing an initial solution using the Northwest Corner rule is as
M ODEL follows:
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
N ORTHWEST C ORNER M ETHOD S TEPS
T HE N ORTHWEST C ORNER
M ETHOD 1 Start in the upper - left hand corner cell (northwest corner) of the main body of the table
T HE M INIMUM C OST OR L EAST
C OST M ETHOD by putting the largest value that satisfy the supply constraint and demand constraint.
T HE VOGEL’ S A PPROXIMATION
M ETHOD 2 Once the supply constraint is satisfied, go the the Step 3. If not, move on cell to the right
T HE S TEPPING S TONE M ETHOD
in the same row. Place in that cell the largest value that does not exceed both supply and
demand constraints. In doing so, you have to consider all cell values that were previously
entered either in the row or column. Repeat this procedure if the supply constraint is not
yet exhausted.
3 Once the entire supply in a particular row has been used up, move down to the next cell
located in the same column. Place in that cell the largest value that does not exceed the
row or the column that corresponds to the demand. Again, all values, previously entered
must be considered.
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T HE N ORTHWEST C ORNER M ETHOD
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
N ORTHWEST C ORNER M ETHOD S TEPS (Continuation)
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
M ETHOD 4 Return to Steps 2 and 3 until all rows and columns are used up.
T HE S TEPPING S TONE M ETHOD
5 Compute the value of the objective function by multiplying the value in the cell by the
objective function coefficient “boxed-in values." Then, sum all the cells.
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THE MINIMUM COST METHOD
T HE M INIMUM C OST OR L EAST C OST M ETHOD
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS M INIMUM C OST M ETHOD S TEPS
T HE N ORTHWEST C ORNER
M ETHOD
T HE M INIMUM C OST OR L EAST
1 Select the cell having minimum unit cost cij and allocate as much as possible.
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION
2 Second step,
M ETHOD
T HE S TEPPING S TONE M ETHOD
1 Subtract this minimum value from supply sj and demand dj .
2 If the supply si is ), then cross that row and if the demand dj is ) then cross that column.
3 If the minimum cost cell is not unique, then select the cell where the maximum allocation can be
possible
3 Repeat this steps for all uncrossed rows and columns until all supply and demand values
are 0.
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THE VOGEL’S APPROXIMATION METHOD
T HE VOGEL’ S A PPROXIMATION M ETHOD
Here are the steps involved in Vogel’s Approximation Method for finding a feasible solution
T HE T RANSPORTATION to a transportation problem.
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM VOGEL’ S A PPROXIMATION M ETHOD S TEPS
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER 1 Identify the two lowest costs in each row and column of the cost matrix. Write the
M ETHOD
T HE M INIMUM C OST OR L EAST absolute difference between these two costs. These differences are referred to as
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION penalties.
M ETHOD
T HE S TEPPING S TONE M ETHOD 2 Find the row or column with the highest penalty. Assign the minimum of supply and
demand to the corresponding cell. If there are multiple rows or columns with the same
maximum penalty, you can choose any one of them.
3 If the assignment from the previous step satisfies the supply at the origin, delete the
corresponding row. If it satisfies the demand at the destination, delete the corresponding
column.
4 If the supply at each origin is 0 (meaning every supply is exhausted) and the demand at
each destination is 0 (meaning every demand is met), stop the procedure. Otherwise,
repeat the above steps starting from step 1.
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THE STEPPING STONE METHOD
T HE S TEPPING S TONE M ETHOD
T HE T RANSPORTATION
M ODEL S TEPPING S TONE M ETHOD S TEPS
M ODELLING A T RANSPORTATION
P ROBLEM
S OLVING T RANSPORTATION 1 Select an unused square to be evaluated.
P ROBLEMS
T HE N ORTHWEST C ORNER
M ETHOD
2 Beginning at this square, trace a closed path back to the original square via squares that
T HE M INIMUM C OST OR L EAST are currently being used (only horizontal or vertical moves allowed). You can only change
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION directions at occupied cells.
M ETHOD
T HE S TEPPING S TONE M ETHOD 3 Beginning with plus (+) sign at the unused square, place alternative minus (−) sign and
plus signs on each corner square of the closed path just traced.
4 Calculate an improvement index, Iij by adding together the unit costs in each square
containing a minus sign.
5 Repeat Steps 1 - 4 until an improvement index has been calculated for all unused
squares.
If all indicates computed are greater than or equal to zero, an optimal solution has been reach.
If not, it is possible to improve the current solution and decrease total shipping cost.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION 1. T RY THIS !
P ROBLEM
S OLVING T RANSPORTATION
P ROBLEMS
Mr. Daniel Kim is the owner of Cement Exchange, a cement compositions manufacturer
T HE N ORTHWEST C ORNER with three (3) plant locations. Cement - bonded composites are important construction
M ETHOD
T HE M INIMUM C OST OR L EAST materials that are made of hydrated cement paste that binds wood or fibers to make
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION precast for building components. Cement Exchange is currently a top manufacturer of
M ETHOD
T HE S TEPPING S TONE M ETHOD
cement composites and has been exclusive supplier to four (4) major distributors in Metro
Manila. The total monthly purchase to each of the four distributors are 1500, 2000, 2400,
and 3500 boxes. The four distributors may receive from any of the three manufacturing
plants. However, there are limitations to the production capacity to each plant:
PLANT 1 - 3000
PLANT 2 - 2700
PLANT 3 - 3700.
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION
M ODEL
M ODELLING A T RANSPORTATION
P ROBLEM C ONTINUATION ...
S OLVING T RANSPORTATION
P ROBLEMS
T HE N ORTHWEST C ORNER
Mr. Kim would like to reduce the logistics expenses by proper scheduling of shipments to
M ETHOD
T HE M INIMUM C OST OR L EAST
the four distributors. The company’s chief accountant submitted an estimate of the per
C OST M ETHOD
box/unit shipping cost (in peso) from each plant to each distributors, and these are given
T HE VOGEL’ S A PPROXIMATION
M ETHOD as follows:
T HE S TEPPING S TONE M ETHOD
Distributor
Plants 1 2 3 4
1 15 18 22 26
2 21 21 16 23
3 14 19 20 24
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T HE T RANSPORTATION M ODEL
T HE T RANSPORTATION 2. T RY T HIS !
M ODEL
M ODELLING
P ROBLEM
A T RANSPORTATION
The Java Coffee and Tea, Inc. operating in Batangas is going to establish three
S OLVING T RANSPORTATION
P ROBLEMS
subsidiaries producing coffee. They should be located in Batangas City, San Pascual and
T HE N ORTHWEST C ORNER
M ETHOD
Bauan. The main ingredient - coffee beans - will be supplied from two warehouses in San
T HE M INIMUM C OST OR L EAST Jose and Lipa City. The management of the corporation has estimaed the weekly
C OST M ETHOD
T HE VOGEL’ S A PPROXIMATION requirements of the companies. The warehouses’ capacities are limited. Coffee beans are
M ETHOD
T HE S TEPPING S TONE M ETHOD
transported once a week from suppliers to destinations by van and it is possible to
evaluate a unit shipping cost per ton. All the values are given in the following table:
Destination
Warehouse Batangas City San Pascual Bauan Supply (tons)
San Jose 330 250 350 70
Lipa City 300 240 250 80
150
Demand (tons) 45 60 35 140
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