Transportation Algorithm for Minimization Problem (MODI Method)
Step 1
Make the transportation table entering the origin capacities ai, the cost cij and destination requirement bj
Step 2
Determine an initial basic feasible solution by vogel's technique or by any of the known method.
Step 3
For all the basic variables xij, solve the system of equations ui + vj = cij, for all i, j for which cell (i, j) is in the basis, starting at first with some ui = 0, compute the values of ui and vj on the transportation table
Step 4
Calculate the cost differences dij = cij - ( ui + vj ) for all the non-basic cells
Step 5
Apply optimality test by testing the sign of each dij
Step 6
Assume the variable xrs enter the basis. Assign an unknown quantity ? to the cell (r, s). Then make a loop that begins and ends at the cell (r, s) and links some of the basic cells. The amount ? is added to and subtracted from the transition cells of the loop in such a way that the availabilities and necessities remain fulfilled.
Step 7
Allocate the largest possible value to the ? in such a manner that the value of at least one basic variable comes out to be zero and the other basic variables remain non-negative. The basic cell whose allotment has been made zero will leave the basis.
Step 8
Now, go back to step 3 and repeat the process until an optimal solution is achieved.
Worked Examples
Illustration 1
Determine an optimal solution
W1
W2
W3
W4
Availability
F1
19
30
50
10
7
F2
70
40
60
9
F3
8
20
18
Requirement
5
14
Answer
1. Put vogel's approximation method for determining the initial basic feasible solution
Penalty
5(19)
(30)
(50)
2(10)
X
(70)
7(40)
2(60)
(40)
8(8)
10(20)
Minimum transportation cost comes out to be 5 (19) + 2 (10) + 7 (40) + 2 (60) + 8 (8) + 10 (20) = Rs. 779
2. Test for Non-degeneracy
The initial fundamental feasible solution has m + n - 1 i.e. 3 + 4 - 1 = 6 allocations in independent positions. Therefore optimality test is fulfilled.
3. Computation of ui and vj : - ui + vj = cij
ui
u1= -10
u2 = 40
u3 = 0
vj
v1 = 29
v2 = 8
v3 = 0
v4 = 20
Allocate a 'u' value to zero. (Convenient rule is to choose the ui, which has the maximum number of allocations in its row)
Assume u3 = 0, then
u3 + v4= 20 which means 0 + v4 = 20, so v4 = 20
u2 + v4= 60 which means u2 + 20 = 60, so u2 = 40
u1 + v4= 10 which means u1 + 20 = 10, so u1 = -10
u2 + v3= 40 which means 40 + v3 = 40, so v3 = 0
u3 + v2= 8 which means 0 + v2 = 8, so v2 = 8
u1 + v1= 19 which means -10 + v1= 19, so v1 = 29
4. Computation of cost differences for non basic cells dij = cij - ( ui + vj )
cij
ui + vj
-2
-10
69
48
29
0
dij = cij - ( ui + vj )
32
1
-18
11
5. Doing Optimality test
dij < 0 i.e. d22 = -18
so x22 is entering the basis
6. Creation of loop and allotment of unknown quantity ?
We assign ? to the cell (2, 2). Reallocation is done by transferring the maximum possible amount ? in the marked cell. The value of ? is achieved by equating to zero to the corners of the closed loop. That is min (8-?, 2-?) = 0 which gives ? = 2. Hence x24 is outgoing as it turns out to be zero.
5 (19)
2 (10)
2 (30)
7 (40)
6 (8)
12 (20)
Minimum transportation cost comes out to be 5 (19) + 2 (10) + 2 (30) + 7 (40) + 6 (8) + 12 (20) = Rs. 743
7. Enhanced Solution
u2 = 22
v3 = 18
(60)
51
42
52
As dij > 0, an optimal solution is achieved with minimal cost of Rs.743
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