Q1.

Potatoes are grown and harvested on farms in the Midwest and then shipped to distribution centers in Kansas C
and Des Moines where they are cleaned and sorted. These distribution centers supply three manufacturing plants ope
Frodo-Lane Foods Company, located in Chicago, St Louis and Cincinnati. where they make potato chips. Potatoes a
manufacturing plants by railroad or truck. Each distribution center is able to supply the following tons of potatoes to
monthly basis:

Distribution
Supply
Center

Kansas City 150

Omaha 175
Des Moines 275

Total 600 tons

Each plant demands the following tons of potatoes per month.

Plant Demand
Chicago 200
St. Louis 100
Cincinnati 300
Total 600 tons

The cost of transporting 1 ton of potatoes from each distribution

center(source) to each plant (destination) differs according to the
distance and method of transport. These costs are shown next.

Plant
Distribution Centers Chicago St.Louis Cincinnati
Kansas City 6 8 10
Omaha 7 11 11
Des Moines 4 5 12

The problem is to determine how many tons of potatoes to transport from each
distribution center to each plant on a monthly basis to minimize the
transportation cost.
 The problem is to determine how many tons of potatoes to transport from each
distribution center to each plant on a monthly basis to minimize the
transportation cost.

Sol:

Here total supply = total demand. It is a balanced transportation problem.

Distribution Centers Chicago St.Louis Cincinnati Supply

Kansas City 6 8 10 150
Omaha 7 11 11 175
Des Moines 4 5 12 275
Demand 200 100 300 600

Distribution Centers Chicago St.Louis Cincinnati LHS

Kansas City 25 0 125 150
Omaha 0 0 175 175
Des Moines 175 100 0 275
LHS 200 100 300
Relation Equal Equal Equal
Demand 200 100 300

Total Cost 4525

 ibution centers in Kansas City, Omaha
ee manufacturing plants operated by the
ake potato chips. Potatoes are shipped to
llowing tons of potatoes to the plant on a

Cincinnati
Relation Supply
Equal 150
Equal 175
Equal 275
Q2 A manufacturer of washing machines in the process of locating regional warehouses
in four geographical locations in south India to serve the markets. The markets are
geographically and organizationally split into five segments. Based on the forecasting
estimates by the marketing department, it has been found that the average monthly
demand for the washing machine is 2000, 1500, 1200,2800 and 2500 in each of the
market segments. Based on this forecast and other costs including the fixed and variable
cost of setting up warehouses, it has decided to build four warehouses with a capacity to
handle monthly requirements to the extent of 2900,2300,3700 and 1100 units
respectively. Due to the geographical spread of the warehouses and the markets, the
transportation cost per unit is different between these pairs of warehouses and market
segments. Figure presents the cost of transporting one unit. Identify the most cost-
effective way of serving the markets from these warehouses.

Market Market Market Market Market

1 2 3 4 5
Wareho
100 70 50 30 40
use A
Wareho
30 95 40 125 50
use B
Wareho
75 20 65 40 30
use C
Wareho
20 40 95 85 80
use D

Market Market Market Market Market

Supply
1 2 3 4 5
Wareho
100 70 50 30 40 2900
use A
Wareho
30 95 40 125 50 2300
use B
Wareho
75 20 65 40 30 3700
use C
Wareho
20 40 95 85 80 1100
use D
Demand 2000 1500 1200 2800 2500 10000
 Market Market Market Market Market
LHS Relation Supply
1 2 3 4 5
Wareho
0 0 0 2800 100 2900
use A 2900 equals
Wareho
900 0 1200 0 200 2300
use B 2300 equals
Wareho
0 1500 0 0 2200 3700
use C 3700 equals
Wareho
1100 0 0 0 0 1100
use D 1100 equals
LHS 2000 1500 1200 2800 2500
Relation equals equals equals equals equals
Demand 2000 1500 1200 2800 2500

Total
Cost 291000
 Market Market Market Market Market
Supply
1 2 3 4 5
Wareho
100 70 50 30 40 2900
use A
Wareho
30 95 40 125 50 2300
use B
Wareho
75 20 65 40 30 3700
use C
Wareho
20 40 95 85 80 1100
use D
Demand 2000 1500 1200 2800 2500 10000

Market Market Market Market Market

LHS
1 2 3 4 5
Wareho
0 0 0 2800 100
use A 2900
Wareho
900 0 1200 0 200
use B 2300
Wareho
0 1500 0 0 2200
use C 3700
Wareho
1100 0 0 0 0
use D 1100
LHS 2000 1500 1200 2800 2500
Relation equal equal equal equal equal
Demand 2000 1500 1200 2800 2500
TC
291000
Relation Supply

2900
equal

2300
equal

3700
equal

1100
equal
 Q3 Solve the following Transportation problem.

To
D1 D2 D3 D4 D5 D6 Supply
S1 50 50 45 29 44 20 721
From S2 29 26 47 45 37 23 620
S3 44 31 50 26 28 30 450
S4 46 21 49 25 41 40 587
S5 48 47 43 40 39 30 690
Demand 560 580 459 700 668 416

D1 D2 D3 D4 D5 D6 LHS Relation
S1 0 0 0 305 0 416 721 Equals
S2 560 60 0 0 0 0 620 Equals
S3 0 0 0 328 122 0 450 Equals
S4 0 520 0 67 0 0 587 Equals
S5 0 0 144 0 546 0 690 Equals
LHS 560 580 144 700 668 416
Relation <= <= <= <= <= <=
Demand 560 580 459 700 668 416

Deficit/Slack
0 0 315 0 0 0

Total Cost 86990

Supply 3068
Demand 3383
Diff 315

Supply
721
620
450
587
690
 Q4 In the first question with respect to potato shipment, if the supply capacity at Des Moines has
been increased to 375 tons. What is the impact on the transportation problem.

Distribution
Chicago St.Louis Cincinnati Supply
Centers
Kansas City 6 8 10 150 Supply 700
Omaha 7 11 11 175 Demand 600
Des Moines 4 5 12 375 Diff 100
Demand 200 100 300

Distribution
Chicago St.Louis Cincinnati LHS Relation Supply Excess
Centers
Kansas City 0 0 150 150 <= 150 0
Omaha 0 0 150 150 <= 175 25
Des Moines 200 100 0 300 <= 375 75
LHS 200 100 300
Relation equal equal equal
Demand 200 100 300

Total Cost 4450

at Des Moines has
problem.
Q 1 A manufacturer of certain household goods caters primarily to south Indian market. At present,
the manufacturer has located six stock points in the major south Indian cities of Hyderabad,
Mysore, Chennai, Kochi, Pune and Vizag to cater to the demand. There are four warehouses from
which the components are distributed. In order to save on the cost of operations, the warehouses are
typically located away from these cities in different locations. The unit cost of transporting the
items from each of these warehouses to the cities (Rs/tonne), the capacity of the warehouses and the
demand at the city stock points per unit time (in tonnes) are all summarized in Figure. Identify the
least cost schedule for deciding which warehouse will send the item to the cities.

Hyderab
Mysore Madras Kochi Pune Vizag Supply
ad
Warehou
60 70 10 30 90 90 1900
se A
Warehou
70 25 40 55 80 100 1800
se B
Warehou
50 80 45 75 85 30 3300
se C
Warehou
80 40 50 45 90 60 1300
se D
Demand 1750 750 2000 1800 1200 800 8300

A)   Identify the least cost schedule for deciding which warehouse will send the item to the cities.

Hyderab
Mysore Madras Kochi Pune Vizag Supply
ad
Warehou
60 70 10 30 90 90 1900
se A
Warehou
70 25 40 55 80 100 1800
se B
Warehou
50 80 45 75 85 30 3300
se C
Warehou
80 40 50 45 90 60 1300
se D
Demand 1750 750 2000 1800 1200 800 8300

Hyderab
Mysore Madras Kochi Pune Vizag LHS
ad
Warehou
0 0 1900 0 0 0
se A 1900
Warehou
0 750 100 500 450 0
se B 1800
Warehou
1750 0 0 0 750 800
se C 3300
Warehou
0 0 0 1300 0 0
se D 1300
LHS 1750 750 2000 1800 1200 800
Relation Equals Equals Equals Equals Equals Equals
Demand 1750 750 2000 1800 1200 800

Total
Cost 339000

A)   The company has decided to shut down its Kochi operations and to serve the
requirements of Kochi from Mysore. Will the decision change? What will the cost impact
of this decision be?

Hyderab
Mysore Madras Pune Vizag Supply
ad
Warehou
60 70 10 90 90 1900
se A
Warehou
70 25 40 80 100 1800
se B
Warehou
50 80 45 85 30 3300
se C
Warehou
80 40 50 90 60 1300
se D
Demand 1750 2550 2000 1200 800 8300

HyderabadMysore Madras Pune Vizag LHS Relation

Warehouse 0 0 1900 0 0 1900 =
Warehouse 0 1800 0 0 0 1800 =
Warehouse 1750 0 0 750 800 3300 =
Warehouse 0 750 100 450 0 1300 =
LHS 1750 2550 2000 1200 800
Relation = = = = =
Demand 1750 2550 2000 1200 800
TC 314750

A)   Suppose the company has received a proposal for setting up another warehouse (Warehouse
with a capacity of 900 units. The location of the warehouse in such that the unit costs of
transporting to the six cities are as follows: Hyderabad-45,Mysore-75,Chennai-30,Kochi-65,Pun
90 and Vizag-80.The company would like to know how the allocation will change if the warehou
is made operational and the likely cost impact on the operation of the system.

Hyderab
Mysore Madras Kochi Pune Vizag Supply
ad
Warehou
60 70 10 30 90 90 1900
se A
Warehou
70 25 40 55 80 100 1800
se B
Warehou
50 80 45 75 85 30 3300
se C
Warehou
80 40 50 45 90 60 1300
se D
Warehou
45 75 30 65 90 80 900
se E
Demand 1750 750 2000 1800 1200 800

Hyderab
Mysore Madras Kochi Pune Vizag LHS
ad
Warehou
0 0 1400 500 0 0
se A 1900
Warehou
0 750 0 0 1050 0
se B 1800
Warehou
1450 0 0 0 150 800
se C 2400
Warehou
0 0 0 1300 0 0
se D 1300
Warehou
300 0 600 0 0 0
se E 900
LHS 1750 750 2000 1800 1200 800
Relation = = = = = =
Demand 1750 750 2000 1800 1200 800

TC 331000
n market. At present,
es of Hyderabad,
ur warehouses from
, the warehouses are
of transporting the
e warehouses and the
Figure. Identify the
o the cities.

nd the item to the cities.

Equals Supply
 1900
Equals

1800
Equals

3300
Equals

1300
Equals

and to serve the

will the cost impact

Demand 8300

Supply 8300
Diff 0

Supply
1900
1800
3300
1300
her warehouse (Warehouse E)
uch that the unit costs of
5,Chennai-30,Kochi-65,Pune-
n will change if the warehouse
ation of the system.

Relation Supply

1900
<=

1800
<=

3300
<=

1300
<=

900
<=