Chapter 7: Transportation Quantitative Methods:

Production and operations management is a process of planning, organizing,

directing and controlling the activities of the production function. Adopting models for
examining how best to use existing capacity in short-term, break even analysis to
identify break even volumes, linear programming and computer simulation for
capacity utilization, decision tree analysis for long-term capacity problem of facility
expansion, also, forecasting and budgeting.

What are typical work activities of factory manager? Much of the work involves
full operational control over what happens at the plant/works including engineering,
output, personnel and often logistics and other commercial activity (sales and
marketing). Typical work activities of factory manager are: A) to review and
approve plans for the control of planned output, budget spending, material efficiency,
engineering effectiveness, and human resources; B) to supervise employees; C) to
establish strong working relations with other functional managers; D) to report
regularly to the production manager.
Transportation: A special class of linear programming problem is Transportation
Problem, where the objective is to minimize the cost of distributing a product from a
number of sources (e.g. factories) to a number of destinations (e.g. warehouses)
while satisfying both the supply limits and the demand requirement. Because of the
special structure of the Transportation Problem the Simplex Method of solving is
unsuitable for the Transportation Problem. Generally, the transportation model can
be extended to areas other than the direct transportation of a commodity, including
among others, inventory control, employment scheduling, and personnel
assignment.

The First Method

North West Corner Method:

Factories Demand Demand Demand Demand Supply

1 4) 5 6) 2) 4) 5 0
2 3) 5 0) 5 5) 15 6) 25 20 15 0
3 7) 8) 9) 10) 20 20 0
Demands 10 5 0 50 15 0 20 0

. ‫ يجب ان يتساوى كمية المعروض مع كمية الطلب‬:‫اوال‬

 ‫ايجاد الكلفة الكلية‬

= 20*10+ 15*5+ 5*0 + 5*3+ 5*4

$ 310

2- Least Cost Method

Factories Demand Demand Demand Demand Supply

1 4) 6) 2) 5 4) 50
2 3) 10 0) 5 5) 10 6) 25 20 10 0
3 7) 8) 9) 10) 20 20 0
Demands 10 0 5 0 15 10 0 20 0

Total cost: 2*5 + 0*5 + 3*10 + 5*10 + 10*20 =

: 10 + 0 +30+ 50+ 200 = 290$

Least Cost Method in case of unbalanced situation:

Factories Demand Demand Demand Demand Supply

1 10) 13) 22) 17) 200
2 14) 13) 19) 15) 350
3 9) 20) 23) 10) 150
Demands 100 140 300 250 700 -
790
= 90

.‫الن العرض اقل من الطلب نقوم بادراج صف وهمي‬

Factories Demand Demand Demand Demand Supply

1 10) 100 13)100 22) 17) 200 100 0
2 14) 13) 40 19) 60 15) 250 350 310 60
0
3 9) 20) 23) 150 10) 150 0
0) 0) 0) 90 0) 90 0
Demands 100 0 140 40 0 300 240 90 250 0
0

Total Cost = 10*100 +13*100+ 13*40+ 19*60 + 15*250+ 23*150+ 0*90 =

= 1000 + 1300+ 520+ 1140+ 3750+ 3450 = 11160 $.

3- Transportation problem vogel method.

Factories Demand Demand Demand Demand Supply

1 4) 6) 2) 4) 5 2
2 3) 0) 5 5) 6) 25 20 3
3 7) 8) 9) 10) 20 1
Demands 10 50 15 20
1 6 3 2
Factories Demand Demand Demand Supply
M1 M3 M4
1 4) 2) 5 4) 50 2
2 3) 5) 6) 20 2
3 7) 9) 10) 20 2
Demands 10 15 10 20
1 3 2

Factories Demand Demand Demand Supply

M1 M3 M4
2 3) 10 5) 6) 20 10 2
3 7) 9) 10) 20 2
Demands 10 0 10 20
4 4 4

Factories Demand Demand Supply

M3 M4
2 5) 10 6) 10 0
3 9) 10) 20
Demands 10 0 20

Factories Dm4 Supply

3 10) 20 20 0
Demand 20 0

Total cost = 0*5 + 2*5+ 3*10+ 10*5 + 20*10 =

0 +10+ 30+ 50+ 200 = 290$