Solution of stochastic transportation problem involving multi-choice random parameter using Newton’s divided difference interpolation

Abstract

This paper presents the methodology of finding out the optimal solution of random multi-choice transportation problems. The problem states that the parameters supply and demand are multi-choice in which alternative choices are considered as the independent random variable, which follows the normal distribution with mean (μ) and variance (σ 2). The decision variable and cost coefficients are assumed to be deterministic. For the optimal choice of a multi-choice parameter, Newton’s Divided Difference Interpolating polynomial used, and the probabilistic constraints with their significance level transformed into deterministic form by applying chance-constrained techniques. To better understand the methodology, an illustration is presented.