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SEMINAR

ON
LEAST COST METHOD
AND
NORTH WEST CORNER METHOD

Presented by:
Nuwash Kerketta
BCA 6th semester
Roll No. 03
Sub- Operation Research
LEAST COST METHOD

Definition:
The Least Cost Method is another method used to
obtain the initial feasible solution for the
transportation problem. Here, the allocation begins
with the cell which has the minimum cost. The
lower cost cells are chosen over the higher-cost cell
with the objective to have the least cost of
transportation.
 The Least Cost Method is considered to produce more
optimal results than the North-west Corner because it
considers the shipping cost while making the allocation,
whereas the North-West corner method only considers
the availability and supply requirement and allocation
begin with the extreme left corner, irrespective of the
shipping cost.
Steps

1. Identify the cell with the lowest cost


2. Allocate as many units as possible to that
call without exceeding supply or demand;
then cross out the row or column (or both)
that is exhausted
3. Find the cell with the lowest cost from the
remaining cells
4. Repeat steps 2 and 3 until all unit have been
allocated
Let’s understand the concept of Least Cost
method through a problem given below:

S1 S2 S3 S4 Supply
F1
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand
6 10 15 4 35
S1 S2 S3 S4 Supply
F1
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand
6 10 15 4 35
S1 S2 S3 S4 Supply
F1
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand 1
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand 1
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand 1
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand 1
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand 1
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3
4 3 6 2 5
Demand 1
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 1 15
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 1 15
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 1 15
8 9 2 7 16

F3 4 1
4 3 6 2 5
Demand 1 0 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 1 15
8 9 2 7 16

F3 11 4 1 00
4 3 6 2 5
Demand 99 110 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 1 15
8 9 2 7 16

F3 11 4 1 00
4 3 6 2 5
Demand 99 110 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 1 15
8 9 2 7 16

F3 11 4 1 00
4 3 6 2 5
Demand 99 110 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 6 1 15 9
8 9 2 7 16

F3 11 4 1 00
4 3 6 2 5
Demand 0 99 110 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 6 9 1 15 9 0
8 9 2 7 16

F3 11 4 1 00
4 3 6 2 5
Demand 0 9 90 110 0
6 10 15 4 35
S1 S2 S3 S4 Supply
F1 14 0
6 4 1 5 14

F2 6 9 1 15 9 0
8 9 2 7 16

F3 11 4 1 00
4 3 6 2 5
Demand 0 9 90 110 0
Total cost:
6 10 15 4 35
= 141 68  99  12  13  42

= 156
North West Corner
Method
North-West Corner Method

 Definition: The North-West Corner Method


is adopted to compute the initial feasible
solution of the transportation problem. The
name North-west corner is given to this
method because the basic variables are
selected from the extreme left corner.
Steps in North West Corner Rule
 Select the upper left-hand corner cell of the transportation table and
allocate as many units as possible equal to the minimum between
available supply and demand, i.e., min(s1, d1).
 Adjust the supply and demand numbers in the respective rows and
columns.
 If the demand for the first cell is satisfied, then move horizontally to
the next cell in the second column.
 If the supply for the first row is exhausted, then move down to the
first cell in the second row.
 If for any cell, supply equals demand, then the next allocation can be
made in cell either in the next row or column.
 Continue the process until all supply and demand values are
exhausted.
Let’s understand the concept of North west corner method
through a problem given below:

S1 S2 S3 S4 Supply
F1 14
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 10 15 4
S1 S2 S3 S4 Supply
F1 14
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 10 15 4
S1 S2 S3 S4 Supply
F1 6 14 8
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 15 4
S1 S2 S3 S4 Supply
F1 6 14 8
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 15 4
S1 S2 S3 S4 Supply
F1 6 14 8
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 15 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 15 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 16
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 15 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 16 14
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 0 15 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 16 14
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 0 15 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 16 14
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 0 15 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 14 16 14 0
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 0 15 1 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 14 16 14 0
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 0 15 1 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 14 16 14 0
8 9 2 7
F3 5
4 3 6 2
Demand 35
6 0 10 2 0 15 1 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 14 16 14 0
8 9 2 7
F3 1 5 4
4 3 6 2
Demand 35
6 0 10 2 0 15 1 0 4
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 14 16 14 0
8 9 2 7
F3 1 4 5 4 0
4 3 6 2
Demand 35
6 0 10 2 0 15 1 0 4 0
S1 S2 S3 S4 Supply
F1 6 8 14 8 0
6 4 1 5

F2 2 14 16 14 0
8 9 2 7
F3 1 4 5 4 0
4 3 6 2
Demand 35
6 0 10 2 0 15 1 0 4 0
Total cost = 6684291421642

= 128
References:

 https://businessjargons.com/least-cost-meth
od.html
 https://businessjargons.com/north-west-corne
r-rule.html

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