CHAPTER 1 ASSIGNMENT PROBLEM

Introduction: An assignment problem is a particular case of transportation problem

where the objective is to assign a number of resources to an equal number of
activities so as to minimize total cost or maximize total profit of allocation. The
problem of assignment arises because available resources such as men, machines,
etc., have varying degree of efficiency for performing different activities. Therefore,
cost, profit or time of performing the different activities is different. Thus, the problem
is: How should the assignments be made so as to optimize the given objective.
Some of the problems where the assignment technique may be useful are:
Assignment of workers to machines, salesmen to different sales areas, clerks to
various checkout counters, Classes to rooms. Vehicles to routes, Contracts to
bidders, etc.
Solution methods of assignment problem: An assignment problem can be solved
by the following four methods: (i) Enumeration method (ii) Simplex method (iii)
Transportation method (iv) Hungarian method.
(i) Enumeration method: In this method, a list of all possible among the given
resources (men, machines, etc) and activities (jobs, sales areas, etc) are
prepared. Then an alignment involving the minimum cost (or maximum
profit), time or distance is selected. If two or more assignments have the
same minimum cost (or maximum profit), time or distance, the problem
has ,multiple optional solutions. In general, if an assignment problem
involves n workers/jobs, then there are in total n! possible assignments.
For example, for an n = 5 workers/jobs problem, we have to evaluate a
total of 5! Or 120 assignments. However, when n is large, the method is
unsuitable for manual calculations. Hence, this method is suitable only for
small n.
(ii) Simplex method: Since each assignment problem can be formulated as a 0
or 1 integer linear programming problem, such a problem can alsobe
solved by simplex method. As can be seen in the general mathematical
formulation of the assignment problem, there are n x n decision variables
and n + n or 2n equalities. In particular, for a problem involving 5
workers/jobs, there will be 25 decision variables and 10 equalities. It is,
again, difficult to solve manually.
(iii)Transportation method: Since an assignment problem is a special case of
the transportation problem, it can also be solved by transportation
methods discussed in Chapter 9. However, every basic feasible solution of
a general assignment problem having a square payoff matrix of order n
should have m + n – 1 = n + n – 1 = 2n – 1 assignments. But due to the
special structure of this problem, any solution cannot have more than n
assignments. Thus, the assignment problem is inherently degenerate. In
order to remove degeneracy, (n – 1) number of dummy allocations (deltas
or epsilons) will be required in order to proceed with the algorithm solving
a transportation problem. Thus, the problem of degeneracy at each

Notes Prepared by : SATISH SIR Page 1

 solution makes the transportation method computationally inefficient for
solving an assignment problem.
(iv) Hungarian method: The Hungarian method (developed by Hungarian
mathematician D. Konig) of assignment provides us with an efficient
method of finding the optimal solution without having to make a direct
comparison of every solution. It works on the principle of reducing the
given cost matrix to a matrix of opportunity costs. Opportunity costs show
the relative penalties associated with assigning a resource to an activity as
opposed to making the best or least cost assignment. If we can reduce the
cost matrix to the extent of having at least one zero in each row and
column, it will be possible to make optimal assignments (opportunity costs
are all zero).

The Hungarian method (minimization case) can be summarized in the

following steps:
Step 1 Develop the Cost Table from the Given Problem: If the number of
rows are equal to the number of columns, then as required a dummy row or
dummy column must be added. The cost element in dummy cells are always
zero.
Step 2 Find the Opportunity Cost Table: (a) Identify the smallest element in
each row of the given cost table and then subtract it from each element of that
row, and (b) In the reduced matrix obtains from 2(a), identify the smallest element
in each column and then subtract it from each element of that column. Each row
and column now have at least one zero element.
Step 3 Make Assignments in the Opportunity Cost Matrix: The procedure
of making assignments is as follows:
(a) First round for Making Assignments
• Identify rows successively from top to bottom until a row with exactly one
zero element is found. Make an assignment to this single zero by making
a square (ͷ) around it end and crossed off (x) all other zeros in the
corresponding column.
• Identify columns successively from left to right hand with exactly one zero
element that has not been assigned. Make assignment to this single zero
by making a square (ͷ) around it and crossed off (x) all other zero
elements in the corresponding row.
(b) Second Round for Making Asignments
• If a row and/or column has two or more unmarked zeros and one cannot
be chosen by inspection, then choose the zero cell arbitrarily for
assignment.
• Repeat steps (a) and (b) successively until one of the following situations
arise.

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Step 4 Optimality Criterion:
(a) if all zero elements in the matrix are either marked with square (ͷ) or cross off (x)
and there is exactly one assignment in each row and column, then it is an optimal
solution. The total cost associated with this solution is obtained by adding original
cost figures in the occupied cells. (b) If a zero element in a row or column was
chosen arbitrarily for assignment in step 4(a), there exists an alternative optimal
solution. (c) If there is no assignment in a row (or column), then it implies that the
total number of assignments are less than the number of rows/columns in a square
matrix. In such a situation proceed to step 5.

Step 5 Revise the Opportunity Cost Matrix: Draw a set of horizontal and vertical
lines to cover all the zeros in the revised cost matrix obtained from step 3, by using
the following procedure: (a)For each row in which no assignment was made, mark a
tick () (b) Examine the marked rows. If any zero element occurs in those rows,
mark a tick () to the respective columns containing those zeros. (c) Examine
marked columns. If any assigned zero element occurs in those columns, tick () the
respective rows containing those assigned zeros. (d) Repeat this process until no
more rows or columns can be marked.(e) Draw a straight line through each marked
column and each unmarked row. If the number of lines drawn (or total assignments)
is equal to the number of rows (or columns), the current solution is the optimal
solution, otherwise go to step 6.

Step 6 Develop the New Revised Opportunity Cost Matrix: (a) From among the
cells not covered by any line, choose the smallest element. Call this value k. (b)
Subtract k from every element in the cell not covered by a line. (c) Add k to every
element in the covered by the two lines, i.e. intersection of two lines. (d) Elements in
cells covered by one line remain unchanged.
Step 7 Repeat Steps: Repeat steps 3 to 6 until an optimal solution is obtained.

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 FLOWCHART OF STEPS IN THE HUNGARIAN METHOD.

Arrange data in a matrix

form

Is it Yes Convert it into a minimization

maximization problem, by subtracting all
problem? the values in the matrix from
the largest value in the

No

Is it balanced No
problem? Add dummy row(s) and

Yes
Find the opportunity cost
(a) Identify smallest number in each row and subtract it from every number in that
row
(b) In the reduced matrix, repeat the same process column wise.

• Make assignments row wise having only one zero and eliminate row and column
once the assignment is made.
• Repeat same process columnwise.

Is the number of
Revise the opportunity cost table N assignments
(a) Draw minimum possible lines or equal the
columns and/or rows such that all zeros number of rows
are covered. or columns?
(b) Choose the smallest number not
covered by lines. Subtract it from itself
and every other uncovered number. Yes
(c) Add this number at the intersection of
Optimal solution

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VARIATIONS OF THE ASSIGNMENT PROBLEM
Multiple Optimal Solutions: While making an assignment in the reduced
assignment matrix, it is possible to have two or more ways to strike off a certain
number of zeros. Such a situation indicates multiple optimal solutions with the same
optimal value of objective function. In such cases the more suitable solution may be
considered by the decision-marker.
Maximization Case in Assignment Problem: There may arise situations when the
assignment calls for maximization of profit, revenue, etc., as the objective function.
Such problems may be solved by converting the given maximization problem into a
minimization problem in either of the following two ways: (i) Put a negative sign
before each of the payoff elements in the assignment table so as to convert the
profit values into cost values. Or (ii) Locate the largest payoff element in the
assignment table and then subtract all the elements of the table from the largest
element.The transformed assignment problem so obtained can be solved by using
the Hungarian method.
Unbalanced Assignment Problem: The Hungarian method of assignment
discussed above requires that the number of columns and rows in the assignment
matrix be equal. However, when the given cost matrix is not a square matrix, the
assignment problem is called an unbalanced problem. In such cases a dummy
row(s) or column(s) are added in the matrix (with zeros as the cost elements) to
make it a square matrix. For example, when the given cost matrix is of order 4 x 3, a
dummy column would be added with zero cost element in that column. After making
the given cost matrix a square matrix, the Hungarian method may be used to solve
the problem.
Restrictions on Assignments: Sometimes it may happen that a particular
resource (say a man or machine) cannot be assigned to perform a particular activity
(say territory or job). In such cases, the cost of performing that particular activity by a
particular resource is considered to be very large (written as M or  ) so as to
prohibit the entry of this pair of resource activity into the final solution.
Travelling Salesman Problem: The travelling salesman problem may be solved as
an assignment problem with two additional conditions on the choice of assignment.
That is, how should a travelling salesman travel starting from his home city (the city
from where he started), visiting each city only once and returning to his home city so
that the total distance (cost or time) is minimum. For example, given n cities and
distances dij (cost cij or time tij) from city I to city j, the salesman starts from city 1,
then any permutations of 2,3, …, n represents the number of possible ways for his
tour. Thus, there are (n – 1)! Possible ways of his tour.

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PROBLEMS BASED ON MINIMIZATION
1. An automobile dealer wishes to put five repairmen to five jobs. The repairmen have
somewhat different kinds of skills and they exhibit different levels of efficiency from one
job to another. The dealer has estimated the number of man-hours that would be
required for each job-man combination. This is given as follows. Find optimum
assignment to reduce man-hours.
Man/Job A B C D E
1 11 17 8 16 20
2 9 7 12 6 15
3 13 16 15 12 16
4 21 24 17 28 26
5 14 10 12 11 15

2. ABC Company is engaged in manufacturing 5 brands of packed snacks. It is having five

manufacturing setups, each capable of manufacturing any of its brands, one at a time.
The costs to make a brand on these setups are as under:
Brand/ S1 S2 S3 S4 S5
Setups
B1 4 6 7 5 11
B2 7 3 6 9 5
B3 8 5 4 6 9
B4 9 12 7 11 10
B5 7 5 9 8 11
Find the optimum assignment of products on these setups to reduce overall costs.

3. A suitor’s firm employs typists for piece-meal work on hourly basis. There are five typists
& their charges & speeds are given in matrix. Any fractional working hour is to be
rounded of to nearest high. Find the least cost for following work.
Typist Rate per No of pages Jobs No.
hour(Rs) typed per pages
hour
A 5 12 P 200
B 6 14 Q 176
C 3 8 R 150
D 4 10 S 300
E 4 11 T 180

4. Middleman management consultants have six consultants available to be assigned to do

6 jobs for clients. However, because of technical deficiencies in particular area,
consultant B cannot do Job3, D can’t do Job4, and F can’t go for job6. The cost incurred
are as follows. Find a solution for minimizing cost.
Consultant/ 1 2 3 4 5 6
Job
A 7 7 3 6 10 11
B 8 9 -- 5 8 10
C 9 10 11 13 13 8
D 6 6 8 -- 12 13
E 5 5 9 10 10 12
F 8 4 10 12 9 --

5. W Company has taken the 3rd floor of a building for rents with view to locate zonal a
office. There are five main rooms are to be assigned to five managers as per their
preferences. Preferences of mangers are recorded as under:

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 M1 M2 M3 M4 M5
302 302 303 302 301
303 304 301 305 302
304 305 304 304 304
301 305 303
302
Assign the rooms to the managers such that overall managerial preferences are
minimize.
6. The personnel manager of ABC Company wants to assign Mr. X, Mr. Y, & Mr. Z to
regional office. But it has also an opening in Madras office and would send one of them
there. It will cost Rs.2000, Rs.1600. Rs.3000 to relocate Mr. X, Mr. Y, & Mr. Z;
respectively. Is it advisable to sent any manager to Madras office? If yes then which
manager should be sent?
Office / Delhi Mumbai Kolkatta
Manager
X 1600 2200 2400
Y 1000 3200 2600
Z 1000 2000 4600
7. To stimulate interest and provide an atmosphere for intellectual, discussion, a finance
faculty in a management school decides to hold special seminars on four topics as
Leasing, Portfolio Management, Mutual Fund & Equity research. These seminars should
be held one per afternoon. However the scheduling these seminars have to be done
carefully so that the number of student unable to attend is kept to minimum. A careful
study indicates that the number of students who cannot attend the seminar on specific
day is as:
Day/Seminar Leasing Portfolio Mutual Equity
Mgt. Fund Research
Monday 50 40 60 20
Tuesday 40 30 40 30
Wednesday 60 20 30 20
Thursday 30 30 20 30
Friday 10 20 10 30
Decide a schedule of seminar in such a way that the attendance in the seminar is
maximized?
8. A city corporation has decided to carry out road repairs on four main place of city. The
government has agreed on special grant of 50lakhs if the work is completed at earliest
and with least cost. Tenders are invited from different contractors. In order to expedite
work, one road will be awarded to only one contractor. Cost of repairs (Rs. in lakhs ) is
given below: assign the contract o bidders in such a way that cost is minimized.
Contractors/Road R1 R2 R3 R4
A 9 14 19 15
B 7 17 20 19
C 9 18 21 18
D 10 12 18 19
E 10 15 21 16

9. 5 workers are available to work on 5 machines and respective cost associated with each
work-machine assignment is below. A sixth machine is available to replace one of the
existing machines and the costs are given below
Workers/ M1 M2 M3 M4 M5 M6
Machines
W1 1200 300 600 -- 500 900
W2 400 1100 -- 500 -- 300

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 W3 800 200 1000 900 700 500
W4 -- 700 800 600 1200 1000
W5 500 800 900 400 600 --
a. Determine the allocation of workers to the old machines to minimize cost.
b. Determine whether new machine can be accepted or not.
c. Determine the saving if any, in cost.

10. Five swimmers are eligible to complete in a relay team which is consist of four swimmers
swimming four different styles. The time taken for five swimmers to cover 100meters in
different style is given in minutes: second.
Anand –back stroke 1:09, breast stroke 1:15 and never completed in rest two.
Bhaskar – free style 1.01, breast stroke 1.16 and butterfly 1.20.
Chandu swims Back stroke -1.10, butterfly- 1.12, freestyle-1:05, and breast stroke -1:20.
Damu swims only butterfly -1.11while Easwar swims back stroke 1:20, breast stroke
1:16, freestyle 1:06, and butterfly 1:10.
which swimmer should be assigned which style? Who should not be in race?

PROBLEMS BASED ON MAXIMIZATION

11. The market research of DNA requires some household data from four different cities.
The team has to perform this job in two days –next Saturday & Sunday. It plans to spend
half–a-day in each city. The relevant data are as follows:
Day Time Probability of a household contact
City
1 City2 City3 City4
Saturday Morning 0.32 0.82 0.16 0.64
Saturday Evening 0.6 0.56 0.95 0.8
Sunday Morning 0.7 0.35 0.4 0.62
Sunday Evening 0.1 0.72 0.72 0.9
Number of Households
expected to interview 150 100 200 200
How should it plan the visit to maximize the No. of person to be interviewed?

12. An organization producing 4 different products viz. A, B, C and D having 4 operators as

P, Q, R, & S who are capable of producing any product, works effectively for 7 hours a
day. The time require to produce each product (in minutes) is given along with profit per
unit. Find out the assignment of operator to products which all maximize the profit.
Operator/Product A B C E
P 6 10 14 12
Q 7 5 3 4
R 6 7 10 10
S 20 10 15 15
Profit/ unit (Rs.) 3 2 4 1

13. A manufacturing Company has four Zones A, B,C, D and four sales engineers P, Q, R &
S respectively for assignment. Since the zones are not equally rich in sales potential,
therefore it is estimated that a particular engineer operating in a particular zone will bring
the following sales:
A:4,20,000 B: 3,36,000 C: 2,94,000 D: 4,62,000.
The engineers are having different sales ability. Working under the same conditions,
their yearly sales proportional to 14,9,11 & 8 respectively. Find optimum assignment &
maximum sales.

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 CHAPTER 2 TRANSPORTATION PROBLEM
PRACTICAL PROBLEMS
1. A company has 3 factories at locations A, B & C which supplies 3 warehouses located at
D, E & F. Monthly factory capacities are 10, 80, & 15 units respectively. Monthly
demands are 75, 20 & 50 units respectively. Shipping costs are given below.

Factory/Warehouse D E F
A 5 1 7
B 6 4 6
C 3 2 5
The penalty cost for not satisfying demand at the warehouses D, E & F are Rs. 5, 3 & 2 per
unit respectively. Determine the optimal distribution for the company.

2.
Warehouses/
Stores S1 S2 S3 S4 S5 SS
W1 9 12 10 10 6 150
W2 5 18 12 11 2 30
W3 10 M 7 3 20 120
W4 5 6 2 M 8 130
DD 80 60 20 210 80
A company has four warehouses and five stores. Cost of shipping and other details are
given in the above matrix. How should the company arrange to transport the units so that
cost is minimized?

3. A manufacture must produce a product in sufficient quantity to meet contractual sales

next four months. The production capacity and unit cost of production vary from month to
month. The product produced in month may be held for sale in later months, at an
estimated storage cost of Re. 1 per unit of product per month. No storage cost is
incurred for goods sold in same month. There is no opening inventory and none is
desired at the end of four months. The necessary details are given in the following table.
Contracted Max. Unit cost of
Month sale Production production
1 20 40 14
2 30 50 16
3 50 30 15
4 40 50 17
How much should the manufacturer produce each month to minimize total cost?

4. A cement company produces its requirement of limestone from 3 quarries. Because of

the differences in extraction costs, transportation costs and price paid, the profits earned
by quarries differ. The capacity of quarries, the demand of the factories and the unit
profits are detailed below. Find optimal allocation to maximize the profit given as per
table.

Quarries/
Factories F1 F2 F3 F4 SS
Q1 21 16 23 14 1600
Q2 27 21 26 20 1500
Q3 21 19 24 16 1900
DD 800 900 1100 1600

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5. Apurva is evaluating few investment opportunities for next four yaers and seeking your
advise on optimum investment strategy.

Net return ( in Paise/ Rupee at the end

of 4th year )

Amount
Years Equity PMS MF FD Available
1 95 80 70 60 70
2 75 65 60 50 40
3 70 45 50 40 90
4 60 40 40 30 30
Max
Investment
(Rs. Lacs) 40 50 60 60

6. There are 3 canning factories around a state which need baskets of strawberries. Three
orchards supply these to the factories. Their costs for supplying these baskets are as
follows. How many baskets should be purchased by each factory from each orchard to
minimize the total cost?

Orchard/ Price/Basket
Factory X Y Z (in Rs) Annual Capacity
A 2 4 1 19 300
B 5 3 6 20 700
C 3 2 7 21 1350
4 40 30 30 60 40
Annual
Demand 300 600 1200

UNIVERSITY PROBLEMS

1. M/s ABC & Co. is interested in developing an advertising campaign that will reach to the
persons belonging to four different age groups. Advertising campaigns ca n be
conducted through media M1, M2 and M3. The following table gives the estimated cost in
paise per exposure for each age group according to the media employed. In addition,
maximum exposure levels possible in each of media, namely, M1, M2, and M3 are 40,30
and 20 mns., respectively. Also, the minimum desired exposures with in each age group
namely 16-20,21-25, 26-35 and 36 above are 30, 25, 15 and 10 mns. The objective is to
minimize the cost of obtaining the minimum exposure level of each group. (10)
Media Age - Groups

16 – 20 21 – 25 26 – 35 36 and above

M1 12 7 10 10

M2 10 9 12 10

M3 14 12 9 12

Formulate the above as a transportation problem, and find the optimal solution.
(ii) solve this problem if the policy is to provide at least 4 million exposures

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 through M1 in the age group and at least 8 million exposures through M1 in the
age group 21-25.

2. ‘YOUR OWN’ garment manufacturing firm of Mumbai wishes to develop amonthly

production schedule for the next three months, depending on sales commitments, the
company can either keep the production constant, and allowing the fluctuations in
inventory or maintained inventories at a constant level, with fluctuating production. The
fluctuating production necessitates, working overtime, the cost of which is estimated to
be double the normal production cost of Rs. 10 per unit. Fluctuating inventories result in
inventory carrying cost of Rs 4 per unit. If the company fails to fulfill its sales
commitment, it occurs a shortage cost of Rs. 5 per unit per months. The production
capacities for the next three months are shown in the following table:
Production Capacity Months

1 2 3

Regular 50 50 60

Overtime 30 00 50

Sales 60 120 40

Formulate it as a Transportation Problem to obtain an optional production schedule.

3. Peculiar Outsourcing Company Ltd. has production centres at Mumbai, Chennai, and
Kolkata. The Company has its distribution centres at Ahmedabad, Bhopal, Bangalore
and Goa. Production costs are equal and fixed at all three production centres, however
the variable cost are only the transportation costs. The monthly productions at Mumbai,
Chennai and Kolkata are 10,000 units, 12,000 units and 5,000 units respectively. The
monthly demand at company’s four distribution centres viz. Ahmedabad, Bhopal,
Bangalore and Goa are 12,000 units, 8,000 units, 4,000 units and 30,000 units
respectively. The transportation cost per unit from different production centres to different
distribution centres are given in the following table:
Production Centre Distribution centres

Ahmedabad Bhopal Bangalore Goa

Mumbai 6 4 14 12

Chennai 14 10 4 6

Kolkata 4 10 8 10

(a) Obtain a optimum transportation schedule so as to minimize the transportation

cost. (b) If the transportation cost from production centre Kolkata to distribution
centre Bangalore is changed from Rs. 8 per unit to Rs. 12 per unit, what will be the
effect on the transportation schedule? Will it change? If yes, state the reason. (c) If
the company wants to meet requirement of at least 2000 units at its Goa distribution

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 centre only from Mumbai, will the optimum solution obtained in the change? If so, find
the new optimum transportation schedule and its effect on total cost? (10)
4. Four warehouses with capacities of 85, 35, 50 and 45 tons were receiving the materials
from 3 factories with their supply capacity as 70, 55 and 90 tons on regular basis.
The transportation costs per ton from factories to warehouses are given in the following
table: (10)
Factory Warehouse

1 2 3 4

I 6 1 9 3

II 11 5 2 8

III 10 12 4 7

A feasible solution states from Factory I, 25 tons have to be transported to Warehouse 3 and
45 tons to Warehouse 4. Similarly 30 tons and 25 tons were transported from Factory II to
Warehouse I and Warehouse 3 respectively. However, from Factory III, 55 tons and 35 tons
were transported to warehouse 1 and warehouse 2 respectively. Is this transportation
schedule optimum? If not, modify it and obtain optimum solution and optimum cost.

5. The following table shows all necessary information on the availability of supply to each
warehouse, the requirement of each market and the unit transportation cost (in Rs.) from
each warehouse to each market: (10)
Warehouse Market Supply

P Q R S

A 6 3 5 4 22

B 5 9 2 7 15

C 5 7 8 6 8

Requirement 7 12 17 9

The shipping clerk has worked out the following schedule from experience: 12 units from A
to Q1 unitfrom A to R, 9units from A to S, 15 units from B to R, 7 units from C to Pand 1 unit
from C to R.
(i)Check and see if the clerk has the optimal schedule (ii) Find the optimal schedule and
minimum total transport cost.

6. The Purchase Manager, Mr. Taklu, of the State Road Transport Corporation must decide
on the amounts of fuel to buy from three possible vendors. The corporation refuels its
buses regularly at four depots within the area of its operations.. the three companies
have aid that they can furnish up to the following amounts of fuel during the coming
month: 2,75,000 litres by Oil Company I, 5,50,000 litres by Oil Company II and 6,60,000

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 litres by Oil Company III. The required amount of fuel is 1,10,000 litres by Depot I,
2.20,000 litres at Depot II, 3,30,000 litres at Depot III and 4,40,000 litres at Depot IV.
When the transportation costs are added to the bid prices per litre supplied, the
combined cost per litre for fuel from each vendor servicing a specific Depot is shown
below: (10)
Company I Company II Company III

Depot I 5.00 4.75 4.25

Depot II 5.00 5.50 6.75

Depot III 4.50 6.00 5.00

Depot IV 5.50 6.00 4.50

Determine the Optimum Transport Schedule.

7. UNIK’ Marketing Co. has three Regional Offices and four Distribution Centres. The
Company has decided to launch a new product simultaneously at all centres. His
distribution and transportation plans were leaked to its competitors that ‘UNIK’ will be
able to launch the new product only after twenty days. However, based on the following
Initial Feasible Solution, find transportation schedule which requires the Least
Transportation Time. (10)
Distribution Centres

DC1 DC2 DC3 DC4 Support Materials

(Ton) to be
Regional Office supplied

RO1 10 0 20 11

10 3 15

RO2 1 7 9 20

5 15 5 25

RO3 12 14 16 18

5 5

Requirement of 12 8 15 10
Materials (tons)

Note: Figures in bold indicate allocation of materials (in tons) from Regional Offices
to Distribution Centres, whereas upper left hand corner numbers indicate the Number
of days required to transport any volume (tons) of materials from RO’s to DC’s.

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company has 3 plants and 4 warehouses. The supply and demand in units and
corresponding transportation costs in Rs. per unit are given below. On the basis of past
experience, following dispatch schedule has been finalized.
Plants Warehouses Supply
(Transportation cost in Rs. per unit) Capacity
I II III IV (in Units)
A 10 8 7 12 5000
(5000)
B 12 13 6 6000
(4500) (1500)
C 8 10 12 14 9000
(7000) (500) (1500)
Demand in Units 20,000
7000 5500 4500 3000
Answer the following question with justification:
1) Is the above solution optimal? Find the optimal solution.
2) If the transport carrier offers 10% discount on route C to III, should the management
accept the offer? Analyze the optimal solution to find answer.

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