Transportation model

2. Transportation model • A specific type of linear programming using the simplex method • It is used for minimising transportation costs or maximise the profit in transportation • Problems can be solved using one transportation exercise or several exercises

3. assumptions • Total quantity of the item available at different sources is equal to the total requirement at different destinations. • Item can be transported conveniently from all sources to destinations. There are no other transaction costs apart from transportation • The unit transportation cost of the item from all sources to destinations is certainly and precisely known. • The transportation cost on a given route is directly proportional to the number of units shipped on that route. There are no economies of scale or bulk discounts • The objective is to minimize the total transportation cost for the organisation as a whole and not for individual supply and distribution centres.

4. process • Transportation matrix – ensuring that total supply is equal to total demand • If not, insert dummy supplier or dummy recipient • Solve the problem • North – West Corner rule • Least cost method • Vogel’s approximation method (VAM) • Finding the optimal solution

5. Transportation cost • Freight • Insurance • Customs

6. Example

7. Transportation matrix

8. Assignment model

9. Assignment model • Specific of the transportation model to assign tasks to people or jobs to machines • Objective: minimise assignment costs • Method of solving problems – Hungarian method

10. example Five groups of computer users must be trained for five new types of software. Because the users have different computer skill levels, the total cost of trainings depends on the assignments.

11. Balanced assignment matrix