Transportation Models

1. TransportationModels • Transportation problem is about distribution of goods and services from several supply locations to several demand locations. • The objective in the transportation problems is to minimize total distribution costs (to meet the demand with the minimum cost).

2. Initial Solution • To find a distribution plan, set up a transportation matrix. • A Transportation matrix consists of; • supply and demand centers, • the distribution costs per unit from each supply center to each demand center, • the demand of demand centers, • the capacity of supply centers. • Total demand and total supply might be equal to each other or total supply might be greater or less than total demand.

3. The Methodology To Find An Initial Solution (VAM: Vogel’s Approximate Model) • Find the penalty of not distributing to the cheapest place and not meeting the demand form the cheapest place. • Select the highest penalty. • Find the cell with the least cost in the corresponding column or row. • Assign to this cell the minimum of remaining row supply or remaining column demand. • Repeat this process until all supplies and demands are reduced to zero.