Name: Desiree V.

Manaytay Subject: Management Science

Course & Section: BSA – 1B

STEPPING STONE METHOD UNBALANCED TRANSPORTATION PROBLEM

(NORTH - WEST CORNER CELL METHOD)

PROBLEM 1:

Izzy plastic Processing Company has three processing plants in three

locations. It received orders from three customers. Plant 1 has 700 cartons,
Plant 2 has 500 cartons, and Plant 3 has 300 cartons. Customer A needs 400
cartons, customer B needs 500 cartons, and customer C needs 600 cartons.
The costs of transportation per carton of the product from the plants to the
customers are presented as follows;

CUSTOMER A CUSTOMER B CUSTOMER C

Plant A P5.00 P2.00 P5.50
Plant B P4.00 P2.50 P3.00
Plant C P4.50 P3.50 P3.00

Table 1.

TO: CUSTOMER A CUSTOMER B CUSTOMER C TOTAL

SUPPLY
FROM:
PLANT 1 P5.00 P2.00 P5.50 700

450 250
PLANT 2 P4.00 P2.50 P3.00 500

350 150
PLANT 3 P4.50 P3.50 P3.00 300

300
DUMMY PLANT 150 150
TOTAL 1,650
DEMAND
450 600 600 1,650
A1 (450 × P5.00) = 2,250

B1 (250 × P2.00) = 500

B2 (350 × P2.50) = 875

C2 (150 × P3.00) = 450

C3 (300 × P3.00) = 900

TOTAL COST 4,975

Table is not degenerate. Hence, vacant cells are tested for further
improvement.

VACANT CELLS PATH AND IMPROVEMENT INDEX

A2 + 4 – 5.00 + 2.00 – 2.50 = -1.5
A3 + 4.50 – 3.00 + 3.00 – 2.50 + 2.00 – 5.00 = -1
B3 + 3.50 – 3.00 + 3.00 – 2.50 = 1
C1 + 5.50 – 3.00 + 2.50 – 2.00 + 3.00 = 3

Table 2. Improved Table

TO: CUSTOMER A CUSTOMER B CUSTOMER C TOTAL
SUPPLY
FROM:
PLANT 1 P5.00 P2.00 P5.50 700

100 600
PLANT 2 P4.00 P2.50 P3.00 500

350 150
PLANT 3 P4.50 P3.50 P3.00 300

300
DUMMY PLANT 150 150
TOTAL 1,650
DEMAND
450 600 600 1,650
A1 (100 × 5.00) = 500
A2 (350 × 4.00) = 1,400
B1 (600 × 2.00) = 1,200
C2 (150 × 3.00) = 450
C3 (300 × 3.00) = 900
TOTAL COST 4,450

TEST FOR IMPROVEMENT OF VACANT CELLS

VACANT CELLS PATH AND IMPROVEMENT INDEX

A3 + 4.50 – 3.00 + 3.00 – 4.00 = 0.5
B2 + 2.50 – 2.00 + 5.00 – 4.00 = 1.5
B3 + 3.50 - 2.00 + 5.00 - 4.00 = 2.5
C1 + 5.50 -2.00 + 5.00 – 4.00 + 3.00 – 3.00 = 4.50

The test for vacant cells produced a positive value for the improvements
indices. Hence, the optimal solution has been reached.

RECOMMENDATION:

Based on the table 2. Izzy Plastic Processing Company should distribute the
number of cartons to the three customers as follows:

FROM NUMBER OF CARTONS TO TRANSPORTATION

COST
PLANT 1 100 CUSTOMER A 100 × 5.00 = 500
600 CUSTOMER B 600 × 2.00 = 1,200
PLANT 2 350 CUSTOMER A 350 × 4.00 = 1,400
150 CUSTOMER C 150 × 3.00 = 450
PLANT 3 300 CUSTOMER C 300 × 3.00 = 900
TOTAL TRANSPORTATION COST 4,450