Group Assignment II

 Form a group consists of 3 to 5 members and solve the following problem

• A company has three production facilities-S1, S2, S3 with a production capacity of 7, 9 and 10
units(in ‘00s’) per week of production respectively.

• These units are to be shipped to four warehouses D1, D2, D3, D4 with requirements of 5, 7, 8 &
14 units(in ’00s’) per week. The transportation cost (in birr) per unit between factories to
warehouses are given below

Warehouses

Supply  D1 D2 D3 D4

S1 19 30 50 10

S2 70 30 40 60

S3 40 8 70 20

Answers

1. Find the IBFS using:

a) NWCM

Supply  D1 D2 D3 D4 S

S1 5 2
19 30
50 10 7
S2 5 4
30 40
70 60 9

S3 4 6
70 20
40 8 10

S4 6
0 0 0 0
8
D 5 7 8 14 34
34
NO of occupied cell = M+N-1

M+N=8  M+N-1=7 NO of Allocation cell

Total transportation cost by using NWCM = 865 birr

b) Least cost method

Supply  D1 D2 D3 D4 S
 S1 7
10
19 30 50 7
S2 8 1
40 60
70 30 9

S3 4 6
8 20
40 70 10

S4 5 3
0 0
0 0 8
D 5 7 8 14 34
34
NO of occupied cell = M+N-1

M+N=8  M+N-1=7 NO of Allocation cell

Total transportation cost by using Least cost method = 602 birr

c) Vogle’s approximation method

Supply  D1 D2 D3 D4 S

S1 5 2
19 10
30 50 7
S2 7 2
30 60
70 40 9

S3 10
20
40 8 70 10

S4 8
0
0 0 0 8
D 5 7 8 14 34
34
NO of occupied cell = M+N-1; In this case the no of occupied cell ≤ M+N-1 it is a
degenerate transportation problem

Total transportation cost by using VAM method = 645 birr

2. Find the optimum solution using

a) Using stepping stone method

Supply  D1 D2 D3 D4 S

S1 1 6
19 10
30 50 7
S2 5 4
30 40
70 60 9

S3 2 8
20
8
40 70 10

S4 4 4
0 0
0 0 8
D 5 7 8 14 34
34
Total transportation cost by using stepping stone method = 565 birr

c) Modified distribution (MODI) method = 548 birr