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If you haven't watched my video on the Transportation problem (and aren't familiar with that kind of network optimization problem), I suggest you do that first. Here it is: • Linear Programming: Tr... .
It may also be helpful to watch the Assignment problem video before this one: • Linear Programming: As... .
The transshipment problem extends the transportation problem by adding nodes to the network that have both incoming and outgoing arcs. These are known as transshipment nodes. These nodes can be simple pass-through points (i.e. they neither supply nor consume goods), or they can have either a supply or demand of their own. In this video I cover all of these variations of the problem, and also explain what happens when supply and demand do not match.