QM-2 ASSIGNMENT

GROUP 1
Group No. Roll NO. Name
19pgp231 Yugendra Chaudhari
19pgp223 Utkarsh Gurjar
19pgp226 Vikas Shukla
GROUP 1
19pgp260 Deepraj Das
19pgp220 Teekendra Singh
19pgp285 Shashank Kumar

QUESTION:
A two-stage transportation problem with three factories (F1 to F3), two warehouses (W1 and W2) and
three retailers (R1 to R3). The maximum output that factories can produce are 100, 80 and 60 and the
minimum demands at the retailers are 90, 70 and 80. The warehouses have infinite capacity. The
transportation cost is given in Table 1.

Table 1: Data for a two-stage transportation problem

No. From-to Cost
1 F1 – W1 8
2 F1 – W2 7
3 F2 – W1 9
4 F2 – W2 5
5 F3 – W1 7
6 F3 – W2 4
7 W1 – R1 10
8 W1 – R2 5
9 W1 – R3 9
10 W2 – R1 8
11 W2 – R2 6
12 W2 – R3 3
Ques: How can we minimize the cost along with fulfilling the requirement?

Answer:
Objective:
Factories to warehouse transfer matrix:

  W1 W2
F1 X11 X12
F2 X21 X22
F3 X31 X32
Warehouse to Retailer transfer matrix:

  R1 R2 R3
W1 Y11 Y12 Y33
W2 Y21 Y22 Y23

Therefore, using the above two matrices, defining objective function to minimize the cost of
transport:
Min, Z = 8*X11 + 7*X12 + 9*X21 + 5*X22 + 7*X31 + 4*X32 + 10*Y11 + 5*Y12 +
9*Y13 + 8*Y21 + 6*Y22 + 3*Y23;

Constraints:
Max supply
  W1 W2 possible
F1 X11 X12 100
F2 X21 X22 80
F3 X31 X32 60

X11 + X12 <= 100;

X21 + X22 <= 80;
X31 + X32 <= 60;

  R1 R2 R3
W1 Y11 Y12 Y33
W2 Y21 Y22 Y23
Min Demand 90 70 80

Y11 + Y21 >= 90;

Y12 + Y22 >= 70;
Y13 + Y23 >= 80;

LINGO SOLVER:
Model:

Min = 8*X11 + 7*X12 + 9*X21 + 5*X22 + 7*X31 + 4*X32 + 10*Y11 + 5*Y12 + 9*Y13 +
8*Y21 + 6*Y22 + 3*Y23;
X11 + X12 <= 100;
X21 + X22 <= 80;
X31 + X32 <= 60;
Y11 + Y21 >= 90;
Y12 + Y22 >= 70;
Y13 + Y23 >= 80;

Y11 + Y12 + Y13 - X11 - X21 - X31 <= 0;

Y21 + Y22 + Y23 - X12 - X22 - X32 <= 0;

@GIN(X11);@GIN(X12);@GIN(X21);@GIN(X22);@GIN(X31);@GIN(X32);@GIN(Y11);@GIN(Y12
);@GIN(Y13);@GIN(Y21);@GIN(Y22);@GIN(Y23);

End

Result and Discussion:

Source Destination Quantity

Factory 1 Warehouse 1 70
Factory 1 Warehouse 2 30
Factory 2 Warehouse 2 80
Factory 3 Warehouse 3 60
Warehouse 1 Retailer 2 70
Warehouse 2 Retailer 1 90
Warehouse 2 Retailer 3 80