Render 10

130
TEACHING SUGGESTIONS
Teaching Suggestion 10.1: Transportation Models in the Chapter.
This is a long chapter, in part, because of the four transportation
algorithms that are discussed. If time is an issue in your course, se-
lect one of the two initial solution methods and one of the two
nal solution methods to cover in class. The easiest, but not most
efcient, are the northwest corner and stepping-stone rules.
Teaching Suggestion 10.2: Using the Northwest Corner Rule.
This approach is easily understood by students and is appealing to
teach for that very reason. Make sure the students understand the
weakness of the algorithm (that is, it ignores costs totally). Ask
them to come up with their own approaches that could improve on
this. Invariably, a good student will present an approach that
comes very close to VAM. Name the students approach after him
(or her) and tell him he could have been famous if he had devised
it 50 years earlier.
Teaching Suggestion 10.3: Using the Stepping-Stone Method.
Students usually pick up the concept of a closed path and learn to
trace the pluses and minuses fairly quickly. But they run into prob-
lems when they have to cross over an empty cell. Stress that the cities
in the tableau are just in random order, so crossing an unoccupied
box is ne. The big test is Table 10.5. Once students comprehend
this tracing, they are usually ready to move on. Remind students that
there is only one closed path that can be traced for each unused cell.
Teaching Suggestion 10.4: Dummy Rows and Columns.
Another confusing issue to students is whether to add a dummy
row (source) or dummy column (destination) in a transportation
problem. A slow and careful explanation is valuable so that stu-
dents can reach an intuitive understanding as to the correct choice.
Also note that the software adds these dummies automatically.
Teaching Suggestion 10.5: Handling Degeneracy in
Transportation Problems.
Just as a warning, be aware that students are often confused by the
concept of where to place the zero so that the closed paths can be
traced. Carefully explain why you chose or didnt choose a certain
cell. The choice of cell can affect the number of iterations that fol-
low.
Teaching Suggestion 10.6: Facility Location Problems.
These are an important application of the transportation model and
make it easy to compare how a new city will t into an existing
shipping network. It is an application that has intuitive appeal.
Both QM for Windows and Excel QM software are easy to run on
these problems.
Teaching Suggestion 10.7: Sensitivity Analysis on the
Assignment Problem.
This algorithm is easy to use and understand. Tell about solving a
large stafng problem, then discuss the cost implications if one
worker is not available or insists on doing a particular task. It is
easy, with the software, to recompute the answers and conduct a
sensitivity analysis. This is the basis of Problem 10-37.
Teaching Suggestion 10.8: Maximizing Assignment Problems.
This section is needed if students are to solve maximization prob-
lems by hand, but QM for Windows and Excel QM software
negate the need by handling both types of problems. The section
can be skipped if the software is being used.
Teaching Suggestion 10.9: Problem 10-37.
In assigning this challenging aggregate planning problem, you
may wish to rst provide some background information on how to
structure the plan. Remind students that back ordering is not per-
mitted, so very large costs must be inserted in many cells. Note
that Problem 10-23 (Mehta Company) is a warm-up exercise for
this data set problem.
ALTERNATIVE EXAMPLES
Alternative Example 10.1: Let us presume that a product is
made at two of our factories which we wish to ship to three of our
warehouses. We produce 18 at factory A and 22 at factory B; we
want 10 in warehouse 1, 20 in warehouse 2, and 10 in warehouse
3. Per unit transportation costs are A to 1, $4; A to 2, $2; A to 3,
$3; B to 1, $3; B to 2, $2; B to 3, $1. The corresponding trans-
portation table is
10
C H A P T E R
Transportation and Assignment Models
TO
Warehouses
FROM
1 2 3
Total
4 2 3
Factory A 18
3 2 1
Factory B 22
Total 10 20 10 40
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 130
REVISED
CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 131
The northwest corner approach follows:
Let us determine the total cost of transportation with this initial
northwest corner solution. For each lled cell, simply multiply the
number of units being shipped by the unit shipping cost and then
add those transhipment costs. Thus, in the order in which the cells
were lled, we have 10($4) 8($2) 12($2) 10($1) $90.
Using stepping-stone or MODI, we can nd the optimal
solution:
SOLUTION:
Cost 18($2) 10($3) 2($2) 10($1) $80.
Alternative Example 10.2: There is often an imbalance be-
tween the amounts produced and the amounts desired in the ware-
houses. In Alternative Example 10.1, there were 40 units produced
and forty units demanded for warehousing. Let us presume that an
additional 4 units are desired at each warehouse, increasing the
total demand to 14 24 14 52. The supply shortage of 12
units prevents a solution of this problem until we create a dummy
factory that produces a fake 12 units. The cost to ship a false unit
from a dummy factory or to a dummy warehouse is zero. After the
nal optimal solution is computed, the false units and dummy fa-
cilities are ignored. Our new example with a dummy factory and a
northwest corner initial solution would look like this:
Alternative Example 10.3: Here is a production application of
the transportation problem. Set up the following problem in a
transportation format and solve for the minimum-cost plan:
See the bottom of the next page for the solution.
Alternative Example 10.4: As an example of an assignment
problem, let us assume that Susan is a sorority pledge coordinator
with four jobs and only three pledges. Susan decides that the as-
signment problem is appropriate except that she will attempt to
minimize total time instead of money (since the pledges arent
paid). Susan also realizes that she will have to create a ctitious
fourth pledge and she knows that whatever job gets assigned to
that pledge will not be done (this semester, anyhow). She creates
estimates for the respective times and places them in the following
table:
Zingo is, of course, a ctitious pledge, so her times are all zero.
(a) The rst step in this algorithm is to develop the opportu-
nity cost table. This is done by subtracting the smallest num-
ber in each row from every other value in that row, then,
using these newly created gures, by subtracting the smallest
number in each column from every other value in that col-
umn. Whenever these smallest values are zero, the subtrac-
tion results in no change. Susans resulting matrix is
No change was produced when dealing with the columns
since the smallest values were always the zeros from row four.
(b) The next step is to draw lines through all of the zeros.
The lines are to be straight and either horizontal or vertical.
Furthermore, you are to use as few lines as possible. If it re-
quires four of these lines (four because it is a 4 4 matrix),
an optimal assignment is already possible. If it requires fewer
than four lines, another step is required before optimal as-
signments may be made. In our example, draw a line through:
row four, column three, either column one or row three. One
version of the matrix is
TO
Warehouses
FROM
1 2 3
Total
4 2 3
Factory A 10 8 18
3 2 1
Factory B 12 10 22
Total 10 20 10 40
TO
Warehouses
FROM
1 2 3
Total
4 2 3
Factory A 18 18
3 2 1
Factory B 10 2 10 22
Total 10 20 10 40
TO
Warehouses
FROM
1 2 3
Total
4 2 3
Factory A 14 4 18
3 2 1
Factory B 20 2 22
Dummy 0 0 0
Factory C 12 12
Total 14 24 14 52
PERIOD
Feb. Mar. Apr.
Demand 55 70 75
Capacity
Regular 50 50 50
Overtime 5 5 5
Subcontract 12 12 10
Beginning inventory 10
Costs
Regular time $60 per unit
Overtime 80 per unit
Subcontract 90 per unit
Inventory carrying cost $1 per unit per month
Job 1 Job 2 Job 3 Job 4
Barb 4 9 3 8
Cindy 7 8 2 6
Donna 3 4 5 7
Zingo 0 0 0 0
Barb 1 6 0 5
Cindy 5 6 0 4
Donna 0 1 2 4
Zingo 0 0 0 0
REVISED
132 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS
(c) Since the number of lines required was less than the
number of assignees, a third step is required (as is normally
the case). Looking at the version of the matrix with the lines
through it, determine the smallest number. Subtract this
smallest number from every number not covered by a line
and add it to every number at the intersection of two lines.
Repeat the lining out process, with the following result:
Which is still not an optimum solution.
(d) Since all of the zeros can be lined out with three lines,
this is still not optimal. Hence, we repeat the step of nding
the smallest uncovered number and both subtracting that
quantity from uncovered numbers and adding it to those
numbers at line intersections. The resultant matrix, after
being lined again, is
Since this matrix requires four lines to cover all zeros, we
have now reached an optimal solution stage.
(e) Although there is more than one sequence in which to
make the assignments, in our example the assignments must
be: Cindy, job 3; Barb, job 1; Donna, job 2; Zingo, job 4.
Since Zingo is a dummy row, the job labeled job 4 does not
get completed. The total time is 10.
Barb 1 6 0 5
Cindy 5 6 0 4
Donna 0 1 2 4
Zingo 0 0 0 0
Barb 0 5 0 4
Cindy 4 5 0 3
Donna 0 1 3 4
Zingo 0 0 1 0
Barb 0 4 0 3
Cindy 4 4 0 2
Donna 0 0 3 3
Zingo 1 0 2 0
Table for Alternative
Example 10-3:
Transportation Solution
Demand for:
Total
Unused Capacity
Capacity Available
Supply from: Feb. Mar. Apr. (Dummy) (Supply)
Beginning 0 1 2 0
inventory 10 10
60 61 62 0
Regular time 45 5 50
80 81 82 0
Overtime 5 5
90 91 92 0
Subcontract 3 9 12
999 60 61 0
Regular time 50 50
999 80 81 0
Overtime 5 5
999 90 91 0
Subcontract 2 10 12
999 999 60 0
Regular time 50 50
999 999 80 0
Overtime 5 5
999 999 90 0
Subcontract 10 10
Demand 55 70 75 9 209
A
p
r
i
l
M
a
r
c
h
F
e
b
r
u
a
r
y
P
e
r
i
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d
REVISED
SOLUTIONS TO DISCUSSION QUESTIONS
AND PROBLEMS
10-1. The transportation model is an example of decision mak-
ing under certainty where a decision maker knows beforehand
exactly what state of nature will occur (see Chapter 2). In trans-
portation problems, this means that the costs of each shipping
route, the demand at each destination, and the supply at each
source are all known with certainty.
10-2. Vogels approximation method gives a good initial solu-
tion because it makes each allocation on the basis of the opportu-
nity cost, or penalty, that would be incurred if that allocation is not
chosen (see Section 10.6). The northwest corner rule does not take
into account the shipping costs associated with each route alterna-
tive as does VAM. Nevertheless, the northwest corner rule could
provide as low-cost an initial solutionbut only if, by chance, it
turned out that the lowest-cost routes happened to be on the ini-
tially assigned squares.
10-3. A balanced transportation problem is one in which total
demand (from all destinations) is exactly equal to total supply
(from all sources). If a problem is unbalanced, it is necessary to
establish either a dummy source (if demand is greater than supply)
or a dummy destination (if demand is less than supply). Refer to
Section 10.7.
10-4. This would cause two lled cells to become empty simul-
taneously. This means that the solution in the next table will be de-
generate. Placing a 0 in one of these two cells and treating this as a
lled cell can resolve this difculty.
10-5. The total cost will decrease $2 for each unit that is placed
in this empty cell. Since the maximum that can be placed in this
cell is 80 units, the total cost will decrease by 2(80) $160. This
means the total cost for the solution in the next table will be
$900 $160 $740. In general, when moving from one trans-
portation table to the next, the total cost will decrease by the im-
provement index for the cell to be lled times the minimum num-
ber of units in any of the negative cells in the steppingstone path.
10-6. When m n 1 squares (where m number of rows
and n number of columns) are not occupied, the solution is de-
generate. Not enough squares are occupied to allow us to draw a
closed path for all unused squares. Hence we would not be able to
evaluate all of the unused routes. To handle this problem, we se-
lect one empty square, place a zero in it, pretend as if it is occu-
pied, and proceed as in a normal, nondegenerate case. (To bring
the number of allocations to m n 1, it may be necessary to
place a zero in more than one empty square.)
10-7. The enumeration method is not a practical means of solv-
ing 5 5 or 7 7 problems because of the number of possible as-
signments to be considered. In the 5 5 case, 5! ( 5 4 3
2 1) 120 alternatives need to be evaluated. In the 7 7 case,
there are 7! 5,040 alternatives.
10-8. The assignment problem is a special case of the trans-
portation problem and hence can be solved with the approach
shown earlier in this chapter. This is illustrated for the Fix-It Shop
problem. Notice that the column and row requirements will always
be equal to 1.
The northwest corner initial assignment above yields a degenerate
solution (only three squares are lled instead of the required ve).
This will always be a problem when applying the transportation
method to assignment problems. The problem will be degenerate
because there will be only one assignment in a given row or
column.
10-9. It is not necessary to rework the assignment solution.
Changing each entry in the cost table will not result in different
total opportunity cost tables. The optimal cost will, however, be
increased by $25 from $492 to $517 because of the extra $5
charge for each of the ve workers.
10-10. To exclude any unwanted or unacceptable assignment
from occurring, it is necessary only to place a very high articial
cost in the row and column representing that particular assign-
ment. If, for example, all of the relocation costs for Simmonss
rm were in the range $1,000 to $3,000, an articial cost of
$20,000 could be placed on the unwanted assignment. Conversely,
if we were dealing with a maximization problem, a very low rating
would be given to the unacceptable assignment.
10-11. a. Initial solution to modify Executive Furniture Corpo-
ration problem using the northwest corner rule:
Total cost of this initial solution
200($5) 100($4) 100($4) 50($3)
250($5)
1,000 400 400 150 1,250
$3,200
b. To see if this initial solution is optimal, we compute im-
provement indices for each unused square, namely, DC,
EA, FA, and FB:
TO Albu- Factory
FROM querque Boston Cleveland Capacity
5 4 3
Des Moines 200 100 300
8 4 3
Evansville 100 50 150
Fort 9 7 5
Lauderdale 250 250
Warehouse
Requirements 200 200 300 700
TO Project Project Project Personnel
FROM 1 2 3 Available
$11 $14 $6
Adams 1 1
8 10 11
Brown 1 1
9 12 7
Cooper 1 1
Project Needs 1 1 1 3
REVISED
DC index path DC to EC to EB to DB
$3 3 4 4 $0
EA index path EA to EB to DB to DA
$8 4 4 5 $3
FA index path FA to FC to EC to EB to DB to DA
$9 5 3 4 4 5 $2
FB index path FB to FC to EC to EB
$7 5 3 4 $1
This solution is optimal, so further steppingstone computations
are not necessary.
c. The improvement index for square DC is zero. This im-
plies the presence of multiple optimal solutions. Practically
speaking, management could close the EC shipping route and
send 50 units on the DC route instead. The table below illus-
trates the overall changes in this alternative optimal solution.
We eliminate the Albuquerque column from consideration be-
cause all 200 units in this column have been allocated. We nd
new opportunity costs based on the remaining rows and columns.
In the next iteration of this process, the opportunity costs are the
same as in the original table.
Total cost of alternative optimal solution
200($5) 50($4) 50($3) 150($4) 250($5)
$3,200
10-12. Using VAM, we nd the opportunity costs by compar-
ing the lowest cost cell in each row (and column) with the second
lowest cost cell in that row (or column). The results are given in
the table below. We avoid the high opportunity cost by putting as
many units as possible in the lowest cost cell for the row or col-
umn with the highest opportunity cost.
When the Ft. Lauderdale row is eliminated from further considera-
tion, we have the opportunity costs shown below. We assign
50 units from Des Moines to Cleveland. Then the only remaining
column is Boston, so the assignments are made where possible.
Evaluating the empty cells indicates that this is the optimal solution
with a cost of $3,200.
10-13. a. Hardrocks initial solution using the northwest corner
rule is shown below.
Cost 40($10) 30($4) 20($5) 30($8) 30($6)
$1,040
Using the stepping-stone method, the following improvement in-
dices are computed:
plant 1project C $11 $4 $5 $8 $4
(closed path: 1-C to 1-B to 2-B to 2-C)
plant 2project A $12 $5 $4 $10 $1
(closed path: 2-A to 2-B to 1-B to 1-A)
plant 3project A $9 $6 $8 $5 $4 $10 $0
(closed path: 3-A to 3-C to 2-C to 2-B to 1-B to 1-A)
plant 3project B $7 $6 $8 $5 $4
(closed path: 3-B to 3-C to 2-C to 2-B)
Since all indices are greater than or equal to zero, this initial solu-
tion provides the optimal transportation schedule, namely, 40 units
TO Albu- Factory
5 4 3
Des Moines 200 50 50 300
8 4 3
Fort 9 7 5
Lauderdale 250 250
Warehouse
TO Albu- Factory
5 4 3
8 4 3
Evansville 150 1
Fort 9 7 5
Lauderdale 250 2
Warehouse
Requirements 200 200 300
TO Albu- Factory
5 4 3
8 4 3
Evansville 150 1
Fort 9 7 5
Lauderdale 250 250 2
Warehouse
TO Albu- Factory
5 4 3
Des Moines 200 50 50 300 1
8 4 3
Fort 9 7 5
Lauderdale 250 250 -
Warehouse
TO Plant
FROM A B C Capacity
10 4 11
1 40 30 70
12 5 8
2 20 30 50
9 7 6
3 30 30
Project
3 0 0
0 0
0 0
REVISED
TO
FROM A B C Dummy Capacity
10 4 11 0
1 40 30 70
12 5 8 0
2 20 30 50
9 7 6 0
3 30 30 60
Requirements 40 50 60 30 180
from 1 to A, 30 units from 1 to B, 20 units from 2 to B, 30 units
from 2 to C, and 30 units from 3 to C.
b. There is an alternative optimal solution to this problem.
This fact is seen by the index for plant 3project A being
equal to zero. The other optimal solution, should you wish for
students to pursue it, is as follows:
plant 1project A 20 units
plant 1project B 50 units
plant 2project C 50 units
plant 3project A 20 units
plant 3project C 10 units
Total cost remains unchanged at $1,040.
10-14. Hardrocks problem now requires the addition of a
dummy project (destination) because supply exceeds demand. The
northwest corner initial solution is as follows:
Cost of initial solution 40($10) 30($4) 20($5)
30($8) 30($6) 30($0)
$1,040
This is the same initial assignment and cost as that found in Prob-
lem 10-13. This coincidence occurs because the change in plant
capacity is at the lower right-hand corner of the table and is unaf-
fected by the northwest corner rule.
The second table involves bringing the plant 2dummy route
into the solution as follows:
Cost of this iteration $980.
Testing the unused routes:
plant 1project C index $11 8 5 4 $4
plant 1dummy index $0 0 6 8 5 4 $1
plant 2project A index $12 5 4 10 $1
plant 2dummy index $0 0 6 8 $2
plant 3project A index $9 6 8 5 4 10 $0
plant 3project B index $7 6 8 5 $4
TO
10 4 11 0
1 40 30 70
12 5 8 0
2 20 0 30 50
9 7 6 0
3 60 60
best
improvement
index
REVISED
Because two squares became zero by opening the plant 2dummy
route, the current solution is degenerate (fewer than 3 rows 4
columns 1 square are occupied). We will need to place an arti-
cial zero in an unused square (such as plant 2project C) to be able
to trace all of the closed paths and evaluate where this solution is
optimal.
We now trace the closed paths for the six unused squares (we
assume that the plant 2project C square has a zero in it). The in-
dices are:
plant 1project C $11 8 5 4 $4
plant 1dummy $0 0 5 4 $1
plant 2project A $12 5 4 10 $1
plant 3project A $9 6 8 5 4 10 $0
plant 3project B $7 6 8 5 $4
plant 3dummy $0 0 8 6 $2
Since all indices are zero or positive, an optimal solution has been
reached. Again, note that the plant 3project A route has an im-
provement index of $0, implying that an alternative optimal solu-
tion exists. The alternative optimal solution, whose total cost is
also $980, is shown in the following table.
10-15. a. Using the northwest corner rule for the Saussy Lum-
ber Company data, the following initial solution is
reached:
TO
10 4 11 0
1 20 50 70
12 5 8 0
2 20 30 50
9 7 6 0
3 20 40 60
TO Customer Customer Customer
FROM 1 2 3 Capacity
3 3 2
Pineville 25 25
4 2 3
Oak Ridge 5 30 5 40
3 2 3
Mapletown 30 30
Demand 30 30 35 95
Initial cost 25($3) 5($4) 30($2) 5($3) 30($3)
$260
b. Applying the stepping-stone method, the improvement
indices are computed:
The improved solution is shown in the following table. Its
cost is $255.
Pinevillecustomer 2 $3 2 4 3 $2
Pinevillecustomer 3 $2 3 4 3 $0
Mapletowncustomer 1 $3 3 3 4
$1
Mapletowncustomer 2 $2 3 3 2 $0
best
improve-
ment
index
FROM 1 2 3 Capacity
3 3 2
Pineville 25 25
4 2 3
Oak Ridge 30 10 40
3 2 3
Mapletown 5 25 30
Demand 30 30 35 95
REVISED
K
1
3 K
2
1 K
3
2
FROM 1 2 3 Capacity
3 3 2
R
1
0 Pineville 0 25 25
4 2 3
R
2
1 Oak Ridge 30 10 40
3 2 3
R
3
0 Mapletown 30 30
Demand 30 30 35 95
R
1
0
R
1
K
1
C
11
0 K
1
3 or K
1
3
R
2
K
1
C
21
R
2
3 4 or R
2
1
R
2
K
2
C
22
1 K
2
2 or K
2
1
R
2
K
3
C
23
1 K
3
3 or K
3
2
R
3
K
3
C
33
R
3
2 3 or R
3
1
Improvement indices are as follows:
Pinevillecustomer 2 I
12
C
12
R
1
K
2
3 0 1 2
13
C
13
R
1
K
3
2 0 2 0
Mapletowncustomer 1 I
31
C
31
R
3
K
1
3 1 3 1
32
C
32
R
3
K
2
2 1 1 0
The nal solution is also evaluated using MODI below and to the
right.
Calculations of the R
i
s, K
j
s, and improvement indices are
R
1
K
1
C
11
0 K
1
3 or K
1
3
R
3
K
1
C
31
R
3
3 3 or R
3
0
R
1
K
3
C
13
0 K
3
2 or K
3
2
R
2
K
3
C
23
R
2
2 3 or R
2
1
R
2
K
2
C
22
1 K
2
2 or K
2
1
Improvement indices:
12
C
12
R
1
K
2
3 0 1 2
Oak Ridgecustomer 1 I
21
C
21
R
2
K
1
4 1 3 0
32
C
32
R
3
K
2
2 0 1 1
33
C
33
R
3
K
3
3 0 2 1
Final solution with R
i
and K
j
values:
K
1
K
2
K
3
FROM 1 2 3 Capacity
3 3 2
R
1
Pineville 25 25
4 2 3
R
2
Oak Ridge 5 30 5 40
3 2 3
R
3
Mapletown 30 30
Demand 30 30 35 95
Checking improvement indices again, we nd that this improved
solution is still not optimal. The improvement index for the
Pinevillecustomer 3 route $2 3 3 3 $1. Hence
another shift is necessary. The third iteration is shown in the fol-
lowing table:
The cost of this solution is $230. Since two squares went to zero
simultaneously in this last table, the solution has become degener-
ate. However, an examination of improvement indices reveals that
this current solution is optimal.
10-16. Solving the Saussy Lumber Company problem with
MODI, we begin with the same initial solution as found in Prob-
lem 10-15:
FROM 1 2 3 Capacity
3 3 2
Pineville 0 25 25
4 2 3
Oak Ridge 30 10 40
3 2 3
Mapletown 30 0 30
Demand 30 30 35 95
best
improvement
index
REVISED
K
1
50 K
2
30 K
3
40 K
4
90
TO Coal Coal
FROM Valley Coaltown Junction Coalsburg Supply
50 30 60 70
R
1
0 Morgantown 30 5 35
20 80 10 90
R
2
50 Youngstown 40 20 60
100 40 80 30
R
3
120 Pittsburgh 5 20 25
Demand 30 45 25 20 120
10-17. Krampf Lines Railway Companys initial northwest cor-
ner solution is shown below.
To test for improvement with MODI, we set up an equation for
each occupied square:
R
1
0
R
1
K
1
50 0 K
1
50 or K
1
50
R
1
K
2
30 0 K
2
30 or K
2
30
R
2
K
2
80 R
2
30 80 or R
2
50
R
2
K
3
10 50 K
3
10 or K
3
40
R
3
K
3
80 R
3
40 80 or R
3
120
R
3
K
4
30 120 K
4
30 or K
4
90
index
13
C
13
R
1
K
3
60 0 (40)
100
index
14
C
14
R
1
K
4
70 0 (90)
160
index
21
C
21
R
2
K
1
20 50 50
80
index
24
C
24
R
2
K
4
90 50 (90)
130
index
31
C
31
R
3
K
1
100 120 50
70
index
32
C
32
R
3
K
2
40 120 30
110
Second Krampf solutioncost 5,500 miles:
best
improvement
index
K
1
50 K
2
30 K
3
40 K
4
20
TO Coal Coal
50 30 60 70
R
1
0 Morgantown 30 5 35
20 80 10 90
R
2
50 Youngstown 35 25 60
100 40 80 30
R
3
10 Pittsburgh 5 20 25
Demand 30 45 25 20 120
Initial solutions total cost
30(50 miles) 5(30 miles) 40(80 miles) 20(10 miles) 5(80 miles) 20(30 miles)
6,050 car-miles
REVISED
TO Factory
FROM Dallas Atlanta Denver Dummy Capacity
8 12 10
Houston 800 50 850
10 14 9
Phoenix 250 200 200 650
11 8 12
Memphis 300 300
Warehouse 800 600 200 200
Requirements
R
1
0
R
1
K
1
50 K
1
50
R
1
K
2
30 K
2
30
R
2
K
2
80 R
2
50
R
2
K
3
10 K
3
40
R
3
K
2
40 R
3
10
R
3
K
4
30 K
4
20
index
13
C
13
R
1
K
3
60 0 (40)
100
index
14
C
14
R
1
K
4
70 0 20
50
index
21
C
21
R
2
K
1
20 50 50
80
index
24
C
24
R
2
K
4
90 50 20
20
index
31
C
31
R
3
K
1
100 10 50
40
index
33
C
33
R
3
K
3
80 10 (40)
110
Third and optimal Krampf solution 3,100 miles:
10-18. A dummy destination (column) is added. Using VAM,
the initial solution is the optimal solution.
In the optimal solution we ship 800 from Houston to Dallas, 50
from Houston to Atlanta, 250 from Phoenix to Atlanta, 200 from
Phoenix to Denver, and 300 from Memphis to Atlanta. The total
cost is $14,700.
10-19. If Vogels Approximation is used, the initial solution is
the optimal solution. This is to ship 120 from Reno to Phoenix, 20
from Denver to Phoenix, 160 from Pittsburgh to Cleveland, and
180 from Denver to Chicago. The total cost is $5,700.
10-20. The problem is unbalanced and a dummy destination
must be added. The optimal solution is to ship 120 from Reno to
Phoenix, 20 from Denver to Phoenix, 160 from Pittsburgh to
TO Coal Coal
50 30 60 70
Morgantown 35 35
20 80 10 90
Youngstown 30 5 25 60
100 40 80 30
Pittsburgh 5 20 25
Demand 30 45 25 20 120
best
improvement
index
Cleveland, and 130 from Denver to Chicago. There will be 30
units left in Denver that are not needed. The total cost is $5,310.
10-21. a. VAM steps are as follows:
1. Assign 30 units to CW (the W column has the
greatest difference, 7) and place Xs in all other
row C squares.
2. Assign 20 units to BX.
3. Assign 10 units to BW.
4. Assign 20 units to AZ.
5. Assign 35 units to AY and 15 units to BY.
REVISED
TO Excess
FROM W X Y Z Supply
12 4 9 5
A X X 35 20 55 4
8 1 6 6
B 10 20 15 X 45 0
1 12 4 7
C 30 X X X 30
Power Demand 40 20 50 20 130
Total VAM cost 35(9) 20(5) 10(8) 20(1)
15(6) 30(1)
635
b. MODI technique to test for optimality:
K
1
11 K
2
4 K
3
9 K
4
5
TO Excess
FROM W X Y Z Supply
12 4 9 5
R
1
0 A 35 20 55
8 1 6 6
R
2
3 B 10 20 15 45
1 12 4 7
R
3
10 C 30 30
Power Demand 40 20 50 20 130
R
1
0
R
1
K
3
9 K
3
9
R
1
K
4
5 K
4
5
R
2
K
3
6 R
2
3
R
2
K
1
8 K
1
11
R
2
K
2
1 K
2
4
R
3
K
1
1 R
3
10
index
11
C
11
R
1
K
1
12 0 11 1
index
12
C
12
R
1
K
2
4 0 4 0
index
24
C
24
R
2
K
4
6 (3) 5 4
index
32
C
32
R
3
K
2
12 (10) 4 18
index
33
C
33
R
3
K
3
4 (10) 9 5
index
34
C
34
R
3
K
4
7 (10) 5 12
Since all improvement indices are zero or positive, this solution
is optimal. An alternative optimal solution, however, is AX 20,
AY 15, AZ 20, BW 10, BY 35, CW 30, cost
$635.
10-22. The initial solution using the northwest corner rule shows
that degeneracy exists. The number of rows plus the number of
columns minus 1 4 3 1 6. But the number of occupied
squares is only 5. Refer to the numbers not circled. To solve the
problem a zero will have to be placed in a square (such as 2C).
This will enable all unused paths to be closed.
REVISED
TO Hospital Hospital Hospital Hospital
FROM 1 2 3 4 Supply
8 9 11 16
Bank 1 50 50
12 7 5 8
Bank 2 10 70 80
14 10 6 7
Bank 3 30 40 50 120
Demand 90 70 40 50 250
10-23. Using VAM to nd an initial solution, we make the fol-
lowing assignment:
Cost of VAM 50($8) 70($7) 10($5)
assignment 40($14) 30($6) 50($7)
$2,030
Application of the MODI or stepping-stone methods will
yield the following solution in one more iteration. The optimal
cost is $2,020.
TO Hospital Hospital Hospital Hospital
FROM 1 2 3 4 Supply
8 9 11 16
Bank 1 50 X X X 50 1
12 7 5 8
Bank 2 X 70 10 X 80
14 10 6 7
Bank 3 40 X 30 50 120 1
Demand 90 70 40 50 250
The optimal solution to Problem 10-22, through the use of
our computer program, is circled. Cost $1,036.
TO
FROM A B C Supply
72 8 9 4
1 26 15 31 72
38 5 6 8
2 38 38
7 9 6
3 46 34 12 46
5 3 7
4 19 19 19
Demand 110 34 31 175
REVISED
TO Drury Max.
FROM Hill St. Banks St. Park Ave. Lane Avail.
8% 8% 10% 11%
First Homestead $40,000 $40,000 $ 80,000
9% 10% 12% 10%
Commonwealth $60,000 $40,000 $100,000
9% 11% 10% 9%
Washington Federal $90,000 $30,000 $120,000
Loan Needed $60,000 $40,000 $130,000 $70,000 $300,000
10-24. The optimal solution to the Hall Real Estate decision is
shown in the table below.
The total interest cost would be $28,300, or an average rate of
9.43%. An alternative optimal solution exists. It is
First HomesteadHill Street 30,000
First HomesteadBanks Street 40,000
First HomesteadPark Avenue 10,000
CommonwealthHill Street 30,000
CommonwealthDrury Lane 70,000
Washington FederalPark Avenue 120,000
10-25. Mehtas production smoothing problem is a good exer-
cise in the formulation of transportation problems and applying
them to real-world issues. The problem may be set up as in the
table on the top of the next page. All squares with Xs represent
nonfeasible (backorder) solutions. In applying a computer pro-
gram to solve such a problem, a very large cost (say about $5,000)
would be assigned to each of these squares. This would assure that
they would not appear in the nal solution. The dummy destina-
tion (month) is added to balance the problem.
The initial solution has a cost of $65,700.
The costs for the beginning inventory in months 1, 2, 3, and 4
could be 0, 10, 20, and 30 respectively if the carrying cost for the
beginning inventory has already been considered. The solution is
the same but the cost would be $65,300.
10-26. To determine which new plant will yield the lowest cost
for Ashley in combination with the existing plants, we need to
solve two transportation problems. We begin by setting up a trans-
portation table that represents the opening of the third plant in
New Orleans (see the table). The northwest corner method is used
to provide an initial solution. The total cost of this rst solution is
seen to be $23,600. You should note that the cost of each individ-
ual plant to distribution center route is found by adding the
distribution costs to the respective unit production costs. Thus
the total production plus shipping cost of one auto top carrier
from Atlanta to Los Angeles is $14 ($8 for shipping plus $6 for
production).
Table for Problem 10-26
Total cost (600 units $14) (200 units $9)
(700 units $12) (500 units $10)
$8,400 $1,800 $8,400 $5,000
$23,600
Is this initial solution optimal? We once again employ the step-
ping-stone method to test it and to compute improvement indices
for unused routes.
Improvement index for Atlanta to New York route:
$11 (Atlanta to New York)
$14 (Atlanta to Los Angeles)
$9 (Tulsa to Los Angeles)
$12 (Tulsa to New York)
$6
TO Production
FROM Los Angeles New York Capacity
$14 $11
Atlanta 600 600
$9 $12
Tulsa 200 700 900
$9 $10
New Orleans 500 500
Demand 800 1,200 2,000
REVISED
10-26 (continued)
Improvement index for New Orleans to Los Angeles route:
$9 (New Orleans to Los Angeles)
$10 (New Orleans to New York)
$12 (Tulsa to New York)
$9 (Tulsa to Los Angeles)
$2
Since the rm can save $6 for every unit it ships from Atlanta to
New York, it will want to improve the initial solution and send as
many as possible (600 in this case) on this currently unused route.
You may want to conrm that the total cost is now $20,000, a
savings of $3,600 over the initial solution.
Again, we must test the two unused routes to see if their im-
provement indices are negative numbers.
index for Atlanta to Los Angeles
$14 $11 $12 $9 $6
index for New Orleans to Los Angeles
$9 $10 $12 $9 $2
Since both indices are greater than zero, we have reached an opti-
mal solution. If Ashley selects to open the New Orleans plant, the
rms total distribution system cost will be $20,000. If the Houston
plant site is chosen, the initial solution is as follows:
Total cost of initial solution
$8,400 $1,800 $8,400 $4,500
$23,100
Improvement index for Atlanta to New York
$11 $14 $9 $12
$6
Table for Problem 10-25
Destination (Month)
Sources 1 2 3 4 Dummy Capacity
10 20 30 40 0
Beginning inventory 40 40
100 110 120 130 0
Regular prod. (month 1) 80 20 100
130 140 150 160 0
Overtime (month 1) 50 50
100 110 120 0
Regular prod. (month 2) 90 10 100
130 140 150 0
100 110 0
Regular prod. (month 3) 100 100
130 140 0
100 0
Regular prod. (month 4) 100 100
130 0
150 150 150 150 0
Outside purchases 30 420 450
Demand 120 160 240 100 470 1,090
TO Production
$14 $11
Atlanta 600 600
$9 $12
Tulsa 800 100 900
$9 $10
New Orleans 500 500
Demand 800 1,200 2,000
TO Production
$14 $11
Atlanta 600 600
$9 $12
Tulsa 200 700 900
$7 $9
Houston 500 500
Demand 800 1,200 2,000
REVISED
Improvement index for Houston to Los Angeles
$7 $9 $12 $9
$1
The improved solution by opening Atlanta to New York
route is shown below.
Total cost of improved solution $19,500.
Improvement indices for Atlanta to New York and Houston
to Los Angeles routes are both positive at this point. Hence an op-
timal solution has been reached. Upon comparing total costs for
the Houston option ($19,500) to those for the New Orleans option
($20,000), we would recommend to Ashley that all factors being
equal, the Houston site should be selected.
10-27. Considering Fontainebleau, we have
Optimal cost $1,530,000.
Considering Dublin, we have the following initial northwest corner
solution:
TO Production
$14 $11
Atlanta 600 600
$9 $12
Tulsa 800 100 900
$7 $9
Houston 500 500
Demand 800 1,200 2,000
South Pacic
Canada America Rim Europe Capacity
60 70 75 75
Waterloo 4,000 4,000 8,000
55 55 40 70
Pusan 2,000 2,000
60 50 65 70
Bogota 5,000 5,000
75 80 90 60
Fontainebleau 4,000 5,000 9,000
Market Demand 4,000 5,000 10,000 5,000 24,000
South Pacic
60 70 75 75
Waterloo 4,000 4,000 8,000
55 55 40 70
Pusan 1,000 1,000 2,000
60 50 65 70
Bogota 5,000 5,000
70 75 85 65
Dublin 4,000 5,000 9,000
Market Demand 4,000 5,000 10,000 5,000 24,000
REVISED
Optimal cost $1,535,000.
There is no difference in the routing of shipments, but the
Fontainebleau location is $5,000 less expensive than the Dublin
location. As a practical matter, changes in exchange rates, subjec-
tive factors, or evaluation of future intangibles may overwhelm
such a small difference in cost.
10-28. Considering East St. Louis, we have:
Initial solutionnorthwest corner rule:
Final solution
Optimal solution:
South Pacic
60 70 75 75
Waterloo 4,000 4,000 8,000
55 55 40 70
Pusan 2,000 2,000
60 50 65 70
Bogota 5,000 5,000
70 75 85 65
Dublin 4,000 5,000 9,000
Market Demand 4,000 5,000 10,000 5,000 24,000
Decatur Minn. Cdale E. St. L. Demand
20 17 21 29
Blue Earth 250 250
25 27 20 30
Ciro 50 150 200
22 25 22 30
Des Moines 50 150 150 350
Capacity 300 200 150 150 800
20 17 21 29
Blue Earth 50 200 250
25 27 20 30
Ciro 150 50 200
22 25 22 30
Capacity 300 200 150 150 800
Decatur Minn. Cdale St. Louis Demand
20 17 21 27
Blue Earth 250 250
25 27 20 28
Ciro 50 150 200
22 25 22 31
Des Moines 50 150 150 350
Capacity 300 200 150 150 800
Optimal cost using East St. Louis: $17,400.
Considering St. Louis, we have:
REVISED
Optimal solution:
Optimal cost using St. Louis: $17,250.
Therefore, St. Louis is $150 per week less expensive than East St.
Louis.
10-29. Considering East St. Louis, we have:
Optimal solution:
Optimal cost using East St. Louis: $60,900.
Considering St. Louis, we have:
20 17 21 27
25 27 20 28
Ciro 100 100 200
22 25 22 31
Capacity 300 200 150 150
70 77 91 69
Blue Earth 250 250
75 87 90 70
Ciro 50 150 200
72 85 92 70
Des Moines 50 150 150 350
Capacity 300 200 150 150
70 77 91 69
75 87 90 70
Ciro 150 50 200
72 85 92 70
Capacity 300 200 150 150
70 77 91 77
Blue Earth 250 250
75 87 90 78
Ciro 50 150 200
72 85 92 81
Des Moines 50 150 150 350
Capacity 300 200 150 150
REVISED
Optimal solution:
Optimal cost using St. Louis: $62,250.
Therefore, East St. Louis is $1,350 per week less expensive than
St. Louis.
10-30. Step 1row subtraction:
Column subtraction:
Step 2minimum straight lines to cover zeros:
Step 3subtract the smallest uncovered number from all the un-
covered numbersadd it to numbers at intersections of two lines:
Return to step 2cover all zeros:
Assignment can be made:
Job A12 to machine W
Job A15 to machine Z
Job B2 to machine Y
Job B9 to machine X
Time 10 12 12 16 50 hours
10-31. The initial table used for the assignment problem is:
Billy 400 90 60 120
Taylor 650 120 90 180
Mark 480 120 80 180
John 500 110 90 150
Solving this using the assignment module in QM for Windows,
the following assignments are made:
BillyJob 1; TaylorJob 2; MarkJob 3; JohnJob 4
The total time is 750 minutes.
10-32. For the prohibited route where no assignment may be
made, a very high cost (10,000 miles) used to prevent anything
from being assigned here. The initial assignment table is:
Kansas City Chicago Detroit Toronto
Seattle 1500 1730 1940 2070
Arlington 460 810 1020 1270
Oakland 1500 1850 2080 10000
Baltimore 960 610 400 330
The optimal solution found using the QM for Windows assign-
ment module is:
The Seattle crew will go to Detroit.
The Arlington crew will go to Kansas City.
The Oakland crew will go to Chicago.
The Baltimore crew will go to Toronto.
The total distance is 4,580 miles.
70 77 91 77
75 87 90 78
Ciro 100 100 200
72 85 92 81
Capacity 300 200 150 150
MACHINE
JOB W X Y Z
A12 0 4 6 3
A15 0 1 3 0
B2 0 3 3 2
B9 0 2 4 2
MACHINE
JOB W X Y Z
A12 0 2 3 2
A15 1 0 1 0
B2 0 1 0 1
B9 0 0 1 1
MACHINE
JOB W X Y Z
A12 0 3 3 3
A15 0 0 0 0
B2 0 2 0 2
B9 0 1 1 2
MACHINE
JOB W X Y Z
A12 0 3 3 3
A15 0 0 0 0
B2 0 2 0 2
B9 0 1 1 2
MACHINE
JOB W X Y Z
A12 0 2 3 2
A15 1 0 1 0
B2 0 1 0 1
B9 0 0 1 1
REVISED
10-33. If the total distance is maximized, we assign a very low
cost (miles) to the prohibited route to prevent this assignment. A
cost of 0 is used. The initial table is:
Kansas City Chicago Detroit Toronto
Seattle 1500 1730 1940 2070
Arlington 460 810 1020 1270
Oakland 1500 1850 2080 0
Baltimore 960 610 400 330
With the solution found using QM for Windows, the Seattle crew
will go to Chicago; the Arlington crew will go to Toronto; the
Oakland crew will go to Detroit; the Baltimore crew will go to
Kansas City; and the total distance is 6,040 miles. This maximum
distance is 1,460 miles more than the minimum distance (4,580).
10-34. Because this is a maximization problem, each number is
subtracted from 95. The problem is then solved using the mini-
mization algorithm.
10-35.
10-36. Each rating is subtracted from 27.1 because this is a max-
imization problem.
Assignment Rating
Andersonnance 95
Sweeneyeconomics 75
Williamsstatistics 85
McKinneymanagement 380
Total rating 335
Assignment Rating
Hawkins to cardiology 18
Condriac to urology 32
Bardot to orthopedics 24
Hoolihan to obstetrics 12
Total cost scale 86
Assignment Rating
12 P.M. on A 27.1
23 P.M. on C 17.1
34 P.M. on B 18.5
45 P.M. on independent 12.8
Overall rating 75.5
10-37.
Thus, the optimal solution does not change by adding a fourth
member. Davis is assigned to the dummy (nonexistent project).
This is because Davis is not the relatively least-cost assignment to
any of the rst three projects.
10-38. The following optimal assignments can be made:
10-39. Students should note the large numbers used to block in-
feasible production plans (see Printout 1 on the next
page).
a. The solution yields a cost of $2,591,200. The plan is
shown in Printout 2. There are multiple optimal solutions.
b. Yes, the solution now costs $2,640,500 with 275 per
month in regular time.
c. If overtime rises by $100 per unit to $1,400 per unit,
the cost increases, from part a, to $2,610,100. The pro-
duction plan remains the same as in Printout 2.
If overtime cost is $1,200 per unit, the total cost is
$2,572,100.
Assignment Rating
Adams to project 3 $ 6
Brown to project 2 10
Cooper to project 1 9
Davis to dummy $00
$25
Assignment Cost
Component C53 to plant 6 0.06
Component C81 to plant 3 0.04
Component D5 to plant 4 0.30
Component D44 to plant 5 0.10
Component E2 to plant 2 0.07
Component E35 to plant 8 0.06
Component G99 to plant 1 0.55
Total cost $1.18
REVISED
Printout 1 for Problem 10-39 (Computer Data Entry. The costs are in $1,000s.)
JAN FEB MARCH APR MAY JUNE JULY AUG Supply
REG 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 235
OT 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2. 20
SUB 1.5 1.6 1.7 1.8 1.9 2. 2.1 2.2 12
REG 10. 1. 1.1 1.2 1.3 1.4 1.5 1.6 255
OT 10. 1.3 1.4 1.5 1.6 1.7 1.8 1.9 24
SUB 10. 1.5 1.6 1.7 1.8 1.9 2. 2.1 15
REG 10. 10. 1. 1.1 1.2 1.3 1.4 1.5 290
OT 10. 10. 1.3 1.4 1.5 1.6 1.7 1.8 26
SUB 10. 10. 1.5 1.6 1.7 1.8 1.9 2. 15
REG 10. 10. 10. 1. 1.1 1.2 1.3 1.4 300
OT 10. 10. 10. 1.3 1.4 1.5 1.6 1.7 24
SUB 10. 10. 10. 1.5 1.6 1.7 1.8 1.9 17
REG 10. 10. 10. 10. 1. 1.1 1.2 1.3 300
OT 10. 10. 10. 10. 1.3 1.4 1.5 1.6 30
SUB 10. 10. 10. 10. 1.5 1.6 1.7 1.8 17
REG 10. 10. 10. 10. 10. 1. 1.1 1.2 290
OT 10. 10. 10. 10. 10. 1.3 1.4 1.5 28
SUB 10. 10. 10. 10. 10. 1.5 1.6 1.7 19
REG 10. 10. 10. 10. 10. 10. 1. 1.1 300
OT 10. 10. 10. 10. 10. 10. 1.3 1.4 30
SUB 10. 10. 10. 10. 10. 10. 1.5 1.6 19
REG 10. 10. 10. 10. 10. 10. 10. 1. 290
OT 10. 10. 10. 10. 10. 10. 10. 1.3 30
SUB 10. 10. 10. 10. 10. 10. 10. 1.5 20
Demand 255. 294. 321. 301. 330. 320. 345. 340.
REVISED
10-40. a. Here is the rst schedule using our software.
RT regular time; OT overtime; SUB subcontracting
b. The revised schedule is
Printout 2 for Problem 10-39 (Computer Solution to HAIFA. Multiple Optimal Solutions)
Optimal Solution: 96.0
1 2 3 4 5 6 7 8 9 10
1 0 0 0 0 1 0 0 0 0 0
2 0 0 0 0 0 1 0 0 0 0
3 0 0 0 1 0 0 0 0 0 0
4 0 0 1 0 0 0 0 0 0 0
5 1 0 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 1 0 0
7 0 0 0 0 0 0 0 0 0 1
8 0 0 0 0 0 0 1 0 0 0
9 0 0 0 0 0 0 0 0 1 0
10 0 1 0 0 0 0 0 0 0 0
Optimal Solution: 92.0
1 2 3 4 5 6 7 8 9 10
1 0 0 0 0 1 0 0 0 0 0
2 0 0 0 0 0 1 0 0 0 0
3 0 0 0 0 0 0 1 0 0 0
4 0 0 1 0 0 0 0 0 0 0
5 1 0 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 1 0 0
7 0 0 0 1 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0 0 1
9 0 0 0 0 0 0 0 0 1 0
10 0 1 0 0 0 0 0 0 0 0
Optimal cost JAN FEB MARCH APR MAY JUNE JULY AUG Dummy
$2,591,200
REG 235.
OT 20.
SUB 0. 0. 12.
REG 255.
OT 24.
SUB 15.
REG 290.
OT 26.
SUB 5. 10.
REG 300.
OT 1. 0. 23.
SUB 17.
REG 300.
OT 30.
SUB 17.
REG 290.
OT 28.
SUB 2. 17.
REG 300.
OT 30.
SUB 15. 0. 4.
REG 290.
OT 30.
SUB 20.
REVISED
c. Yes, there is a new schedule:
Optimum Solution: 93.0
1 2 3 4 5 6 7 8 9 10
1 0 0 0 0 1 0 0 0 0 0
2 0 0 0 0 0 1 0 0 0 0
3 0 0 0 0 0 0 1 0 0 0
4 0 0 1 0 0 0 0 0 0 0
5 0 0 0 1 0 0 0 0 0 0
6 0 0 0 0 0 0 0 1 0 0
7 1 0 0 0 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0 0 1
9 0 0 0 0 0 0 0 0 1 0
10 0 1 0 0 0 0 0 0 0 0
2 4 3
TO
FROM A B C Available
4 3 3
W 15 35 0
6 7 6
Y X 50 0
8 2 5
Z X 50 X 50 3
Demand 30 65 40 135
2 4 3
TO
4 3 3
W X 15 20 35 1
6 7 6
Y X 50 0
8 2 5
Z X 50 X 50 3
Demand 30 65 40 135
2 4 3
TO
4 3 3
W X 15 20 35 0
6 7 6
Y 30 X 20 50 0
8 2 5
Z X 50 X 50 3
Demand 30 65 40 135
2 1 2
TO Factory
FROM A B C Availability
4 3 3
W 35 0
6 7 6
Y 50 0
8 2 5
Z X 50 X 50 3
Store Demand 30 65 40 135
SOLUTIONS TO INTERNET HOMEWORK PROBLEMS
10-41. Jessie Cohen Clothing Groups rst VAM assignment
table:
In the initial assignment table above, we see that the Z row has the
greatest difference (3). We assign the minimum possible number
of units (50) to the least-cost route (ZB) in that row.
Second VAM assignment with Bs requirement satised:
This second VAM table (above) indicates that the greatest differ-
ence is now in the B column (4). We may assign up to 15 units to
the WB square without exceeding the demand at store B.
Third VAM assignment with Ws requirement satised:
The third VAM table involves assigning 20 units to the WC
route. This is done because column C has the highest difference
and square WC the lowest cost in that column.
Final assignment for Cohen Clothing Group:
The nal assignment (above) is made by completing the row and
column requirements. This means that 30 units must be assigned
to YA and 20 units to YC.
The total cost of this VAM assignment (15 units $3)
(20 units $3) (30 units $6) (20 units $6) (50
units $2) $505. A quick check using the stepping-stone index
method indicates that this VAM solution is optimal.
10-42.
OFFICE
MAN Omaha Miami Dallas
Jones 800 1,100 1,200
Smith 500 1,600 1,300
Wilson 500 1,000 2,300
Row subtraction
is done next.
OFFICE
Jones 0 300 400
Smith 0 1,100 800
Wilson 0 500 1,800
Column
subtraction
is done next.
REVISED
Optimal assignment:
Jones to Dallas
Smith to Omaha
Wilson to Miami
Cost $1,200 $500 $1,000
$2,700
10-43. Original problem:
Optimal assignment:
taxi at post 1 to customer C
taxi at post 2 to customer B
taxi at post 3 to customer A
taxi at post 4 to customer D
Total distance traveled 4 4 6 4 18 miles.
10-44. Original problem:
OFFICE
Jones 0 0 0
Smith 0 800 400
Wilson 0 200 1,400
Cover zeros
with lines next.
OFFICE
Jones 0 0 0
Smith 0 800 400
Wilson 0 200 1,400
Subtract
smallest
number next.
OFFICE
Jones 200 0 0
Smith 0 600 200
Wilson 0 0 1,200
Cover zeros
with lines next.
OFFICE
Jones 200 0 0
Smith 0 600 200
Wilson 0 0 1,200
CUSTOMER
SITE A B C D
1 7 3 4 8
2 5 4 6 5
3 6 7 9 6
4 8 6 7 4
Row
subtraction
is done
next.
CUSTOMER
SITE A B C D
1 4 0 1 5
2 1 0 2 1
3 0 1 3 0
4 4 2 3 0
Column
subtraction
is done next.
CUSTOMER
SITE A B C D
1 4 0 0 5
2 1 0 1 1
3 0 1 2 0
4 4 2 2 0
Cover zeros
with lines.
CUSTOMER
SITE A B C D
1 4 0 0 5
2 1 0 0 1
3 0 1 2 0
4 4 2 2 0
CASE
SQUAD A B C D E
1 14 7 3 7 27
2 20 7 12 6 30
3 10 3 4 5 21
4 8 12 7 12 21
5 13 25 24 26 8
Row sub-
traction
is
done
next.
CASE
SQUAD A B C D E
1 11 4 0 4 24
2 14 1 6 0 24
3 7 0 1 2 18
4 1 5 0 5 14
5 5 17 16 18 0
Column
subtrac-
tion is
done
next.
CASE
SQUAD A B C D E
1 10 4 0 4 24
2 13 1 6 0 24
3 6 0 1 2 18
4 0 5 0 5 14
5 4 17 16 18 0
Cover
zeros
with
lines.
REVISED
Optimal assignment:
squad 1 to case C
squad 2 to case D
squad 3 to case B
squad 4 to case A
squad 5 to case E
Total person-days projected using this assignment 3 6 3
8 8 28 days.
10-45.
10-46. The major difference between the MODI and stepping-
stone methods is in the procedure used to test for optimality. In the
stepping-stone method, we rst draw a closed path for each of the
empty squares to calculate its improvement index. Then, the most
favorable square (i.e., the one with the largest negative index) is
identied. In MODI, however, we rst identify the most favorable
square (by using row and column numbers) and then draw a closed
path (only for that path) to direct us in improving the solution.
10-47. A northeast corner rule would be directly analogous
to the northwest corner rule, but it would simply begin in the
upper right-hand corner instead of the upper left-hand corner. We
see in the table that this initial solution is degenerate because only
four squares (instead of the expected ve) are occupied. The de-
generacy condition, by the way, is just a peculiarity of the Execu-
tive Furniture Corporation data.
SOLUTION TO ANDREWCARTER, INC., CASE
This case presents some of the basic concepts of aggregate plan-
ning by the transportation method. The case involves solving a
rather complex set of transportation problems. Four different con-
gurations of operating plants have to be tested. The solutions, al-
though requiring relatively few iterations to optimality, involve
degeneracy if solved manually. The costs are:
The lowest weekly total cost, operating plants 1 and 3 with 2
closed, is $217,430. This is $3,300 per week ($171,600 per year)
or 1.5% less than the next most economical solution, operating all
three plants. Closing a plant without expanding the capacity of the
remaining plants means unemployment. The optimum solution,
using plants 1 and 3, indicates overtime production of 4,000 units
at plant 1 and 0 overtime at plant 3. The all-plant optima have no
use of overtime and include substantial idle regular time capacity:
11,000 units (55%) in plant 2 and either 5,000 units in plant 1
(19% of capacity) or 5,000 in plant 3 (20% of capacity). The idled
capacity versus unemployment question is an interesting, non-
quantitative aspect of the case and could lead to a discussion of the
forecasts for the housing market and thus the plants product.
The optimum producing and shipping pattern is
There are three alternative optimal producing and shipping pat-
terns, where R.T. regular time, O.T. overtime, and W
warehouse.
Getting the solution manually should not be attempted using
the northwest corner rule. It will take eight tableaux to do the all
plants conguration, with degeneracy appearing in the seventh
tableau; the 1 and 2 conguration takes ve tableaux; and so on.
It is strongly suggested that software be used.
SOLUTION TO OLD OREGON WOOD STORE CASE
1. The assignment algorithm can be utilized to yield the fastest
time to complete a table with each person assigned one task.
Total Total
Variable Fixed Total
Conguration Cost Cost Cost
All plants operating $179,730 $41,000 $220,730
1 and 2 operating, 3 closed 188,930 33,500 222,430
From To (Amount)
Plant 1 (R.T.) W2 (13,000); W4 (14,000)
Plant 3 (R.T.) W1 (5,000); W3 (11,000);
W4 (1,000); W5 (8,000)
Plant 3 (O.T.) W1 (4,000)
CASE
SQUAD A B C D E
1 10 4 0 4 24
2 13 1 6 0 24
3 6 0 1 2 18
4 0 5 0 5 14
5 4 17 16 18 0
Assignment Rating
C53 at plant 1 10 cents
C81 at plant 3 4 cents
D5 at plant 4 30 cents
D44 at plant 2 14 cents
Total manufacturing cost 58 cents
TO Albu- Factory
5 4 3
Des Moines 100 100
8 4 3
Fort 9 7 5
Lauderdale 300 300
Warehouse
Time
Person Job (Minutes)
Tom Preparation 100
Cathy Assembly 70
George Finishing 60
Leon Packaging 210
Total time 240
REVISED
2. If Randy is used, the assignment problem becomes unbal-
anced and a dummy job must be added. The optimum assignment
would be
This is a savings of 10 minutes with Cathy becoming the backup.
3. If Cathy is given the preparation task, the solution of the as-
signment with the remaining three workers assigned to the remain-
ing three tasks is
If Cathy is assigned to the nishing task, the optimum assign-
ment is
4. One possibility would be to combine the packaging operation
with nishing. Then, George could build an entire table by himself
(in 230 minutes) and Tom could do preparation (100 minutes),
Randy the assembly (80 minutes), and Leon the nishing and
packaging (90 minutes). This crew could build 4.8 tables in a 480-
minute workday, while George himself could build 2.09 tablesa
total of almost 7 tables per day.
To utilize all ve workers, George and Tom could each build
entire tables, 2.09 and 1.75 per day, respectively. Letting Randy
do preparation (110 minutes), Cathy the assembly (70 minutes),
and Leon the nishing and packaging (90 minutes) allows an addi-
tional 4.36 tables per day for a total of 8.2 per day.
Nine tables per day could be achieved by having Tom pre-
pare and assemble 3 tables, George prepare and nish 3 tables,
Cathy assemble 6 tables, Leon nish 6 tables, and Randy prepare
3 tables and package all 9. George, Cathy, and Randy would each
have 60 minutes per day unutilized and could build 0.6 table hav-
ing George do preparation (80 minutes), Cathy assembly and
packaging (95 minutes), and Randy the nishing (100 minutes).
INTERNET CASE STUDY
Northwest General Hospital
SOLUTION TO CUSTOM VANS, INC. CASE
To determine whether the shipping pattern can be improved and
where the two new plants should be located, the total costs for the
entire transportation system for each combination of plants, as
well as the existing shipping pattern costs, will have to be deter-
mined. In the headings identifying the combination being dis-
cussed, Gary and Fort Wayne will be omitted since they appear in
every possible combination.
Total costs and optimal solutions for each combination are
given on succeeding pages. A summary of the total costs and the
respective systems is listed below:
DetroitMadison $10,200
MadisonRockford $10,550
DetroitRockford $11,400
Since the total cost is lowest in the GaryFort Wayne
DetroitMadison combination ($10,200), the new plants should be
located in Detroit and Madison. This system is also an improve-
ment over the existing pattern, which costs $9,000, on a cost-per-
unit basis.
Status quo: $9,000/450 units $20/unit
Proposed: $10,200/750 units $13.60/unit
Thus the two new plants would denitely be advantageous,
both in satisfying demand and in minimizing transportation costs.
Time
George Preparation 80
Tom Assembly 60
Leon Finishing 80
Randy Packaging 210
Total time 230
Time
Cathy Preparation 120
Tom Assembly 60
George Finishing 60
Leon Packaging 210
Total time 250
Time
George Preparation 80
Tom Assembly 60
Cathy Finishing 100
Leon Packaging 210
Total time 250
Optimal Solution
Source Destination Number of Trays
From: Station 5A To: Wing 5 60
5A 6 80
5A 3 60
3G 1 80
3G 3 90
3G 4 55
1S 4 155
1S 2 120
Optimal Cost: 4,825 minutes
REVISED
SHOP
PLANT Chicago Milwaukee Minneapolis Detroit Capacity R
i
10 20 40 25
Gary 200 100 300
20 30 50 15
Fort Wayne 50 100 150
0 0 0 0
Dummy 100 50 50 100 300
Demand 300 100 150 200 750
K
j
Total costs 200(10) 50(30) 100(40) 100(15)
$9,000
The costs for the additional plants are shown below.
Cost Table for Custom Vans, Inc.
SHOP
PLANT Chicago Milwaukee Minneapolis Detroit Capacity
Gary 10 20 40 25 300
Existing
Fort Wayne 20 30 50 15 150
Detroit* 26 36 56 1 150
Proposed Madison** 7 2 22 37 150
Rockford 5 10 30 35 150
Forecast Demand 300 100 150 200
*Since a plant at Detroit could purchase a gallon of berglass for $2 less than any other plant, and one Shower-Ric takes 2 gallons
of berglass, a systems approach to transportation warrants that $2(2), $4, be deducted from each price quoted in the case for ship-
ments from Detroit.
**Since a plant at Madison could hire labor for $1 less per hour than the other plants, and one Shower-Ric takes 3 labor hours to
build, $1(3) or $3 should be deducted from each price quoted for shipments from Madison.
The total cost is 300($10) 100($0) 150($0) 150($15)
50($0) $5,250. This is also the optimal solution with no addi-
tional plants. The cost of the existing shipping pattern is $9,000
and is shown below. Thus the existing shipping pattern can be
improved.
Existing Shipping Pattern
10 20 40 15
SHOP
PLANT Chicago Milwaukee Minneapolis Detroit Capacity
Gary 300 X X X 300
Fort Wayne X X X 150 150
Dummy X 100 150 50 300
750
Demand 300 100 150 200
750
The optimal solution is:
REVISED
Improvement indices (MODI method):
G to Milw: 20 20 0 0
G to D: 25 5 0 20
FW to Milw: 30 20 10 0
FW to Minn: 50 40 10 0
D to C: 26 10 (4) 20
D to Milw: 36 20 (4) 20
D to Minn: 56 40 (4) 20
M to C: 7 10 (18) 15
M to D: 37 5 (18) 50
G to Milw: 20 5 0 15
G to Minn: 40 25 0 15
FW to Milw: 30 5 (10) 35
FW to C: 20 10 (10) 20
FW to Minn: 50 25 (10) 35
M to D: 37 25 (3) 15
R to C: 5 10 5 10 best improvement
(see iteration 2)
R to Minn: 10 5 5 0
R to D: 35 25 5 5
All solutions are positive; solution is optimal as shown:
G to C: 200 units
G to Minn: 100 units
FW to C: 100 units
FW to D: 50 units
D to D: 150 units
M to Milw: 100 units
M to Minn: 50 units
Total cost 200(10) 100(20) 100(2) 100(40)
50(22) 50(15) 150(1) $10,200
SHOP
i
10 20 40 25
Gary 200 100 300 0 (10)
20 30 50 15 (5)
Fort Wayne 100 50 150 10 (10)
26 36 56 1
Detroit 150 150 4 (25)
7 2 22 37 (5)
Madison 100 50 150 18 15
Demand 300 100 150 200 750
K
j
10 20 40 5
(3) (18) (13) (14)
10 10
DetroitMadison, Iteration 1 (Vogels Approximation Method)
SHOP
i
10 20 40 25
Gary 250 50 300 0 (10)
20 30 50 15
Fort Wayne 150 150 10 (5)
7 2 22 37 (5)
Madison 50 100 0* 150 3 (15)
5 10 30 35
Rockford 150 150 5 (1)
Demand 300 100 150 200 750
K
j
10 5 25 25
(2) (8) (8) (10)
(10)
*0 supplied to avoid degeneracy.
MadisonRockford, Iteration 1 (Vogels Approximation Method)
REVISED
G to Milw: 20 15 0 5
G to Minn: 40 35 0 5
FW to C: 20 10 (10) 20
FW to Milw: 30 15 (10) 25
FW to Minn: 50 35 (10) 25
M to C: 7 10 (13) 10
M to D: 37 25 (13) 25
R to Milw: 10 15 (5) 0
R to D: 35 25 (5) 15
Improvement indices (MODI method) for Detroit-Rockford:
G to Minn: 40 40 0 0
G to D: 25 5 0 20
FW to Milw: 30 20 10 0
FW to Minn: 50 40 10 0
D to C: 26 10 (4) 20
D to Milw: 36 20 (4) 20
D to Minn: 56 40 (4) 20
R to C: 5 10 (10) 5
R to D: 35 5 (10) 40
Optimal solution:
G to C: 200 units
G to Milw: 100 units
FW to C: 100 units
D to D: 150 units
FW to D: 50 units
R to Minn: 150 units
Total costs 200(10) 100(20) 100(20) 50(15) 150(1)
150(30)
$11,400
Optimal solution:
G to C: 250 units
G to D: 50 units
FW to D: 150 units
M to Milw: 100 units
M to Minn: 50 units
R to C: 50 units
R to Minn: 100 units
Total cost 250(10) 50(5) 100(2) 50(22) 100(30)
50(25) 150(15)
$10,550
10 15 35 25
SHOP
i
10 20 40 25
0 Gary 250 50 300 0
20 30 50 15
10 Fort Wayne 150 150 10
7 2 22 37
13 Madison 100 50 150 13
5 10 30 35
5 Rockford 50 100 150 5
Demand 300 100 150 200 750
K
j
10 15 35 25
MadisonRockford, Iteration 2
DetroitRockford (Vogels Approximation Method)
10 30 40 5
SHOP
i
10 20 40 25 (10)
0 Gary 200 100 300 0 (30)
20 30 50 15 (5)
10 Fort Wayne 100 50 150 10 (10)
26 36 56 1
4 Detroit 150 150 4 (25)
5 10 30 35
10 Rockford 0* 150 150 10 (5)
Demand 300 100 150 200 750
K
j
10 20 40 5
(5) (10) (10) (14)
(15) (10)
*0 supplied to avoid degeneracy.
REVISED

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