The Ordinary Transportation Problem allows to model the situations wherernthe amount of goods leaving the supply points is equal to the amount deliv-rnered to the destinations.rnIn this project, the model of Transportation Problem with lossy arcs, thernsituations where the amount of goods leaving the supply points is not equalrnto the amount delivered to the destinations (this is the case, when fragile orrnperishable goods are transported or the complaints may occur) is presented.rnEach problem of this type can be transformed to the form of a GeneralizedrnMinimum Cost Flow Problem with linear objective function.rnThe presented solution method uses the ideas applied in the Method of Solv-rning a Generalized Minimum Cost Flow problem.rnKeywords:rnTransportation Problem with Lossy Arcs, Generalized Transportation Prob-rnlem, Generalized Minimum Cost Flow Problem and Generalized NetworkrnSimplex Algorithm.