Transportation
Problem (For
Capacity Allocation)
In Excel
Transportation problems are
Definition used to find the minimum cost
of transportation of goods from
m source to n destination.
F Customers N Customers P Customers Y Customers Supply
J Plant 18 16 10 14 600
S Plant 14 13 15 18 700
T Plant 11 14 15 22 500
Demand 250 500 500 550
Example
Linear Programming Formulation
Minimization, C = 18X11 +16X12 +10X13 +14X14+14X21 +13X22
+15X23 +18X24 +11X31+14X32 +15X33 +22X34
Subject to
18X11 +16X12 +10X13 +14X14 <=600
14X21 +13X22 +15X23 +18X24 <=700
11X31+14X32 +15X33 +22X34 <=500
18X11 +14X21 +11X31 = 250
16X12 +13X22+14X32 = 500
10X13 +15X23 +15X33 = 500
14X14+18X24+22X34 = 550
Sensitivity
analysis
Sensitivity
analysis
Unbalanced Transportation Problems
Sensitivity Analysis
• Reduced Cost:
• The reduced cost value for each decision variable tells
you how much your objective function value will change
for a one unit increase in that decision variable.
• Allowable increase and Allowable decrease:
• The allowable increase and allowable decrease values tell
you how much the objective coefficient of a decision
variable can change before the recommended solution
(decision variables) will change
• Shadow Price
• The shadow price for each constraint variable tells you
how much your objective function value will change for a
one unit increase In that constraint.
• Allowable increase and allowable decrease
• Theallowable increase and allowable decrease values tell
you how much the right-hand side constraint can change
before the shadow price becomes unreliable (or changes).