OPERATIONAL RESEARCH

Question 1. [Source: Final Paper OCT 2010]

TRANSPORTATION PROBLEM METHOD IN LPP

Consider a transportation problem with three warehouses and four markets. The warehouse capacities are a1=3, a2=7 and a3=5. The market demands are b1=4, b2=3, b3=4 and b4 = 4. The unit cost of shipping is given by the following table: Warehouse W1 W2 W3 Demand (units) M1 2 10 7 4 Shipping Cost (RM/unit) Market M2 M3 2 2 8 5 6 6 3 4 Supply (Unit) M4 1 4 8 4 3 7 5 [15]

Determine the optimal distribution for company to minimize the shipping cost. Solution:
MARKET M1 W1 WAREHOUSE W2 W3 [DEMAND] 2 10 7 4 (5) 1. Choose the biggest = 5 2. (4,3) --> allocate 3 at cell [1,1] 3. Eliminate Row 1 MARKET M1 W1 WAREHOUSE W2 W3 [DEMAND] 2 10 7 1 (3) M2 2 8 6 3 (2) M3 2 5 6 4 (1) M4 1 4 8 4 (4) [SUPPLY] 3 7 5 [12] (1) (1) M2 2 8 6 3 (4) M3 2 5 6 4 (3) M4 1 4 8 4 (3 [SUPPLY] 3 7 5 [15] (1) (1) (1)

OPERATIONAL RESEARCH
1. Choose the biggest = 4 2. (4,5) --> allocate 4 at cell [4,2] 3. Eliminate Column 4

TRANSPORTATION PROBLEM METHOD IN LPP

MARKET M1 W1 WAREHOUSE W2 W3 [DEMAND] 2 10 7 1 (3) M2 2 8 6 3 (2) M3 2 5 6 4 (1) M4 1 4 8 4 [SUPPLY] 3 3 5 [8] (3) (1)

1. Choose the biggest = 3 (with Demand = 1) 2. (1,3) --> allocate 1 at cell [1,3] 3. Eliminate Column 1 MARKET M1 W1 WAREHOUSE W2 W3 [DEMAND] 2 10 7 1 M2 2 8 6 3 (2) 1. Choose the biggest = 3 2. (3,3) --> allocate 3 at cell [2,3] 3. Eliminate Column 2 MARKET M1 W1 WAREHOUSE W2 W3 [DEMAND] 2 10 7 1 M2 2 8 6 3 M3 2 5 6 4 (1) 1. Choose the biggest = 6 2. (1,4) --> allocate 1 at cell [3,3] 3. Eliminate Row 3 MARKET M4 1 4 8 4 [SUPPLY] 3 3 1 [4] (5) (6) M3 2 5 6 4 (1) M4 1 4 8 4 [SUPPLY] 3 3 4 [7] (3) (0)

OPERATIONAL RESEARCH
M1 W1 WAREHOUSE W2 W3 [DEMAND] 2 10 7 1 M2 2 8 6 3

TRANSPORTATION PROBLEM METHOD IN LPP

M3 2 5 6 3 M4 1 4 8 4 [SUPPLY] 3 3 1 [0]

1. Allocate 3 at cell [3,2] 2. Eliminate Row 2 MARKET M1 W1 WAREHOUSE W2 W3 Transportation Cost 2 10 7 1 3 2 8 6 3 M2 2 5 6 M3 1 3 4 1 8 4 M4

= RM [(2*3)+(5*3)+(4*4)+(7*1)+(6*3)+(6*1)] = RM 68.00

Apply Modification Distribution Checking - MODI (1st Iteration) a. Satisfy (m+n-1) = (4+3)-1 = 6 b. Allocation in indepth position V1 U1 U2 U3 7 6 2 5 6 4 V2 V3 V4

Let U1 = 0; U1+V1= 2 U2+V3= 5 U2+V4= 4 U3+V1= 7 U3+V2= 6 U3+V3= 6 2 0 4 5 6 1 5 1

V1= 2 U2= 4 V4= 0 U3= 5 V2= 1 V3= 1 1 1 0 5 0

OPERATIONAL RESEARCH

TRANSPORTATION PROBLEM METHOD IN LPP

10-6=4 -

2-1=1 8-5=3 -

2-1=1 -

1-0=1 8-5=3

There is no negative cost in the cell. The MODI checking is stopped. The allocation made earlier shows the minimal transportation cost.