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QMB TEST No.6 Transportation Problems (TIME = 50 MINUTES)

1. A company has 3 factories from which products are supplied to 3 warehouses. Capacities at factories
are 500, 600 & 800. Demands at warehouses are 400, 500 & 300 units.
Unit cost of transportation is as given below –

W1 W2 W3
F1 11 13 12
F2 8 11 7
F3 15 19 17

It is not possible to transport any quantity from F2 to W3 due to operational constraints.

1} Find IFS by VAM & test for optimality by Modified Distribution method.
2} Is the solution obtained in IFS optimal?
3} Is there an Alternate optimal solution?

(Ans: IFS Cost = Rs. 13,400)

2. M/s BMS Ltd. Have 3 factories & 5 warehouses. For the following conditions, they want to obtain an
optimal transportation schedule. Presently they are incurring a transportation cost of Rs. 12,000.
Supply - F1- 50, F2- 100, F3- 150
Demand - W1-100, W2-70, W3-50, W4-40, W5-40

Transportation cost per unit –

W1 W2 W3 W4 W5
F1 20 28 32 55 70
F2 48 36 40 44 25
F3 35 55 22 45 48

Due to scientific method of allocation of transportation, will there be any saving for the company in
cost?

(Ans: IFS cost = Rs. 11,120; Optimal cost = Rs. 9,240)

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