8 2-8

8.2-8. The Cost-Less Corp. supplies its four retail outlets from its four plants.
The shipping cost per

shipment from each plant to each retail outlet is given below.
1
$700
$200
$400
$200
1
2
3
4
Plant
Unit Shipping Cost

Retail Outlet
2
3
$800
$500
$900
$100
$500
$300
$100
$400
4
$200
$400
$100
$300
Plants 1, 2, 3, and 4 make 10, 20, 20, and 10 shipments per month, respectively. Retail outlets 1, 2, 3,
and 4 need to receive 20, 10, 10, and 20 shipments per month, respectively.
The distribution manager, Randy Smith, now wants to determine the best plan for how many
shipments to send from each plant to the respective retail outlets each month. Randys objective is to
minimize the total shipping cost.
a.) Formulate this problem as a transportation problem by constructing the appropriate parameter
table.
b.) Use the northwest corner rule to construct an initial BF solution.
c.) Starting with the initial basic solution from part (b), interactively apply the transportation simplex
method to obtain an optimal solution.
Solution:
a. Formulate this problem as a transportation problem by constructing the appropriate parameter
table.
1
$700
$200
$400
$200
1
2
3
4
Source
(Plant)
Destination
(Retail Outlet)
2
3
$800
$500
$900
$100
$500
$300
$100
$400
Demand
20
10
Supply
4
$200
$400
$100
$300
10
20
b. Use the northwest corner rule to construct an initial BF solution.

Destination
1
1
Source
(Plant)
Supply
10
10
10
20
10
4
10
0
2
4
Demand
20
10
4
10
10
20
10
10
Z min = 10x7 + 10x2 + 10x9 + 10x3 + 10x1 + 10x3

= 260x100
= $ 26,000
1 of 3
20
60
60
10
20
20
10
60
60
c. Starting with the initial basic solution from part (b), interactively apply the transportation simplex
method to obtain an optimal solution.
Destination
Iteration 0
1
1
Source
(Plant)
2
3
4
2
7
10
-7
-6
4
6
20
vj
-2
Solve for the values of ui and vj
10
10
1
Source
(Plant)
2
3
4
Demand
2
7
60
1
Calculate and fill in the value of cij ui vj
for each nonbasic variable xij.
x12
=895
= -6
x13
= 593
= -7
x14
=291
= -8
x23
= 1 4 3
= -6
x24
= 4 4 1)
= -1
x31
= 4 0 (-2) = 6
x41
= 2 2 (-2) = 2
x42
=12-5
= -6
x43
=42-4
= -1
2
-6
20
vj
6
20
20
10
3
10
1
0
+
-6
-1
5
10
10
1
-6
-2
ui
10
Supply
4
20
2
60
20
10
10
Destination
1
20
4
-1
Set u3 =0 (largest number of allocations in its row)

x32 = u3 + v2,
5 = 0 + v2
; v2 = 5
x33 = u3 + v3,
3 = 0 + v3
; v3 = 3
x34 = u3 + v4,
1 = 0 + v4
; v4 = 1
x44 = u4 + v4,
3 = u4 + 1 ; u4 = 2
x22 = u2 + v2,
9 = u2 + 5 ; u2 = 4
x21 = u2 + v1,
2 = 4 + v1
; v1 = -2
x11 = u1 + v1,
7 = u1 + -2 ; u1 = 9
Iteration 1
10
1
-6
20
3
10
2
2
-1
5
0
10
+
-8
9
10
ui
4
5
8
-6
10
Demand
Supply
-1
3
10
10
10

x32 = u3 + v2,
5 = 0 + v2
; v2 = 5
x33 = u3 + v3,
3 = 0 + v3
; v3 = 3
x34 = u3 + v4,
1 = 0 + v4
; v4 = 1
x44 = u4 + v4,
3 = u4 + 1 ; u4 = 2
x14 = u1 + v4,
2 = u1 + 1 ; u1 = 1
x11 = u1 + v1,
7 = 1 + v1
; v1 = 6
x21 = u2 + v1,
2 = u2 + 6 ; u2 = -4
2 of 3
20
60
60
1
x12
=815
= 2
x13
= 513
= 1
x22
=945
= 0
x23
= 1 4 3
= -6
x24
=441
= -1
x31
=406
= -2
x41
=226
= -6
x42
=12-5
= -6
x43
=42-3
= -1
Destination
Iteration 2
1
1
Source
(Plant)
2
3
4
2
7
20
20
vj
6
10
Source
(Plant)
2
3
4
Demand
7
0
60
1
x12
=815
= 2
x13
= 513
= 1
x22
= 9 (-4) 5 = 8
x23
= 1 (-4) 1 = 4
x24
= 4 (-4) 1 = 7
x31
=406
= -2
x41
= 2 (-4) 6 = 0
x43
= 4 (-4) - 3
= 4
x44
= 3 (-4) - 1
= 6
20
vj
4
-2
20
10
-4
1
10
1
5
10
20
3
10
2
2
5
0
10
1
0
4
0
ui
10
9
6
Supply
4
5
2
20
-4
60
20
10
10
Destination
1
20

x32 = u3 + v2,
5 = 0 + v2
; v2 = 5
x33 = u3 + v3,
3 = 0 + v3
; v3 = 3
x34 = u3 + v4,
1 = 0 + v4
; v4 = 1
x44 = u4 + v4,
3 = u4 + 1 ; u4 = 2
x14 = u1 + v4,
2 = u1 + 1 ; u1 = 1
x11 = u1 + v1,
7 = 1 + v1
; v1 = 6
x21 = u2 + v1,
2 = u2 + 6 ; u2 = -4
Iteration 2
-4
10
1
10
20
3
10
5
0
1
4
+
-2
10
2
10
9
8
ui
4
5
Demand
Supply
3
6
10
10

x31 = u3 + v1,
4 = 0 + v1
; v1 = 4
x32 = u3 + v2,
5 = 0 + v2
; v2 = 5
x33 = u3 + v3,
3 = 0 + v3
; v3 = 3
x34 = u3 + v4,
1 = 0 + v4
; v4 = 1
x21 = u2 + v1,
2 = u2 + 4
; u2 = -2
x14 = u1 + v4,
2 = u1 + 1 ; u1 = 1
x42 = u4 + v2,
1 = u4 + 5 ; u4 = -4
Therefore;
Zmin = 10x2 + 20x2 +10x3 +10x1 + 10x1
= 110x100
= $ 11,000
3 of 3
20
60
60
1
x12
=815
= 2
x13
= 513
= 1
x22
= 9 (-2) 5 = 6
x23
= 1 (-2) 3 = 0
x24
= 4 (-2) 1 = 5
x41
= 2 (-4) 4 = 2
x43
= 4 (-4) 3 = 5
x44
= 3 (-4) - 1
= 6

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8 2-8

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8.2-8. The Cost-Less Corp. supplies its four retail outlets from its four plants.

The shipping cost per

Unit Shipping Cost

b. Use the northwest corner rule to construct an initial BF solution.

Z min = 10x7 + 10x2 + 10x9 + 10x3 + 10x1 + 10x3

Set u3 =0 (largest number of allocations in its row)

Set u3 =0 (largest number of allocations in its row)

Set u3 =0 (largest number of allocations in its row)

Set u3 =0 (largest number of allocations in its row)

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