Page 135 - DCOM303_DMGT504_OPERATION_RESEARCH

Operations Research

Notes Self Assessment

Fill in the blanks:
4. ………………………. is an extension of the transportation problem in which the commodity
can be transported to a particular destination through one or more intermediate or
transshipment nodes.
5. A very ……………cost is applied to prohibited routes.
6. The objective of the transshipment problem is to determine how many units should be
shipped over each node so that all the demand requirements are met with the minimum
…………………..
6.7 Summary

 An optimal solution is one where there is no other set of transportation routes that would
reduce the total transportation cost, for which we have to evaluate each unoccupied cell
(which represents unused routes) in terms of opportunity cost.
 Optimality can be tested by two ways namely:

 Stepping Stone Method
 Modified Distribution Method
 Stepping Stones is method for computing optimum solution of a transportation problem.
 The transshipment problem is an extension of the transportation problem in which the
commodity can be transported to a particular destination through one or more intermediate
or transshipment nodes.

6.8 Keywords

MODI Method: The modified distribution method, also known as MODI method or (u – v)
method provides a minimum cost solution to the transportation problem.
Optimal Solution: A feasible solution is said to be optimal if it minimizes the total transportation
cost.
Stepping Stone Method: In the stepping stone method, we have to draw as many closed paths as
equal to the unoccupied cells for their evaluation. To the contrary, in MODI method, only closed
path for the unoccupied cell with highest opportunity cost is drawn.
Transshipment: When it is possible to ship both into and out of the same node.

6.9 Review Questions

1. What are the conditions for forming a closed loop?

2. How are the maximization problems solved using transportation model?
3. How is optimality tested in solving transportation problems?
4. In what ways is a transshipment problem different from a transportation problem?

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