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Transportation Model - Introduction

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What is the Transportation Model?

Click here to know about Methods to solve Transportation Model Problem provided below here in notes ↓

  • Transportation Model is a special case of LPP(Linear Programming Problem) in which the main objective is to transport a product from various sources to various destinations at total minimum cost.

  • In Transportation Models, the sources and destinations are known, the supply and demand at each source and destinations are also known.

  • It is designed to find the best arrangement for transportation such that the transportation cost is minimum.

For example:

  • Consider three companies (Company1, Company2 and Company3) which produce mobile phones and are located in different regions.

  • Similarly, consider three cities (namely CityA, CityB & CityC) where the mobile phones are transported.

  • The companies where mobile phones are available are known as sources and the cities where mobile phones are transported are called destinations.

  • Let,
      Company1 produces a1 units,
      Company2 produces a2 units,
      Company3 produces a3 units.

  • Let,
      demand in CityA is b1 units,
      demand in CityB is b2 units,
      demand in CityC is b3 units.

  • The cost of transportation from each source to destination is given in table

cost-of-transportation-transportation-model

  • The transportation of mobile phones should be done in such a way that the total transportation cost is minimum.

Types of transportation problems:

  • There are two types of transportation problems:

   i) Balanced transportation problem: The sum of supply and sum of demand are same.

Σ Supply=Σ Demand\Sigma \text { Supply} = \Sigma \text { Demand}

    ii) Unbalanced transportation problem: The sum of supply and sum of demand are different.

Σ SupplyΣ Demand\Sigma \text { Supply} \ne \Sigma \text { Demand}

Methods to solve Transportation Model

  1. North-West corner method
  2. Least cost method
  3. Vogel's Approximation Method (VAM)

Industrial applications of Transportation Model

  1. Minimize the transportation cost from source to destination.
  2. Determine lowest cost location for new industries, offices, warehouse, etc.
  3. Determine the number of products to be manufactured according to demand.
  4. Courier Services: Helps in taking proper decisions to find the best route for transportation.