A mean cost approximation for transportation problems with stochastic demand

Abstract

Abstract Among the many tools of the operations researcher is the transportation algorithm which has been used to solve a variety of problems ranging from shipping plans to plant location. An important variation of the basic transportation problem is the transportation problem with stochastic demand or stochastic supply. This paper presents a simple approximation technique which may be used as a starting solution for algorithms that determine exact solutions. The paper indicates that the approximation technique offered here is superior to a starting solution obtained by substituting expected demand for the random variables.