Transportation problem is a special type of linear programming problem used to optimize (minimize) the transportation cost of a given commodity from a number of sources or origins to a number of destinations while satisfying the supply and demand limits. In this problem, each source has a limited supply, while each destination has a demand to be satisfied. The cost of shipping from a source to a destination is directly proportional to the number of units shipped. The transportation problem is an extension of linear programming technique because the transportation costs are formulated as a linear function to the supply capacity and demand. There are two types of transportation problems: balanced and unbalanced.

• Balanced Transportation Problem: In this case, the total supply is equal to the total demand.
• Unbalanced Transportation Problem: In this case, the supply and demand are not equal, and a dummy row or a dummy column is added to make it a balanced problem.

The transportation problem can be solved using different methods, including the NorthWest Corner Cell Method, Least Call Cell Method, and Vogel’s Approximation Method (VAM) .