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The cell located at intersection of row B and column 4 is the one in which the
unit cost 5 is written as (B,4).
Step 7. If for any cell, supply equals demand then the next
allocation can be made in cell either in the next row or
column.
From\To D1 D2 D3 D4 Available
F1 10 7 3 6 3
F2 1 6 7 3 5
F3 7 4 5 6 7
Demand 3 2 6 4 15\15
Solution : (a) Initial basic feasible solution by NWCM :
From\To D1 D2 D3 D4 Available
10 7 3 6
F1 3 3
1 6 7 3
F2 2 3 5
7 4 5 6
F3 3 4 7
Demand 3 2 6 4 15\15
TOTAL COST IS :
10 7 3 6
3
F1 3
1 6 7 3
5
F2 3 2
7 4 5 6
7
2 3 2
F3
Demand 3 2 6 4 15/15
TOTAL COST IS :
F1-D3 = 3*3 = 9
F2-D1 = 1*3 = 3
F2-D4 = 3*2 = 6
F3-D2 = 4*2 = 8
F3-D3 = 5*3 = 15
F3-D4 = 6*2= 12
Step 1. For each row of the table identify the lowest and the next
lowest cost cell. Find their differences and place it to the right of that
row. In case two cells contains the same least cost then the
difference shall be zero.
Step 3. Looking at all the penalties. Identify highest of them and the
row or column relative to that penalty. Allocate the maximum units
to the least cost cell in the selected row or column. Ties should be
broken in this order
Maximum difference Least Cost Cell.
Tie
Maximum difference Least Cost Cell.
Tie
Maximum Units allocation Arbitrary
Step 4. Adjust the supply and demand and cross the satisfied row
or column.
(B) Testing the solution for possible improvement. How does the
stepping stone method work? Its approach is to evaluate the
cost effectiveness of shipping goods via transportation routes
not currently in the solution.
(A) Stepping Stone Method
(b) Beginning with the selected unused square trace a closed path
(or loop) through atleast three occupied cell. (it is called home
square). The direction of the movement taken is immaterial
because the result will be same in either case. In the closed
path formulation of only right angle turn is allowed, and
therefore skip all other cells which are not at the turning
points.
(c) At each corner of the closed path assign plus (+) and minus (-)
sign alternatively beginning with plus sign for the unoccupied
square (water square) to be evaluated. The +ve and –ve signs can be
assigned either in a clockwise or counter clockwise direction.
(d) Compute the net change in cost along the closed path by adding
together the unit transportation costs associated with each of the
cell traced in the closed path. Comparing the addition to cost with
decreases, will be the improvement index.
(e) Repeat steps 3 (a) to 3 (d) until net change in cost has been
calculated for all unoccupied cells.
Step 4. Check the sign of each of the net change in the unit
transportation costs. If all net changes are plus (+) or zero, then we
have obtained an optimal solution, otherwise go to step 5.
Step 5. Select the unoccupied cell with most negative net change
among all unoccupied cells. If two minus values are equal, select
that one which will result in moving as many units as possible
into the selected unoccupied cell with the minimum cost.
Step 3. For the current basic feasible solution with m+n-1 occupied
cells, calculate index numbers (dual variables) Ri = (i = 1,2,....m)
and Kj = (j=1,21.....,n) for rows and columns, respectively.
For calculating values of Ri and Kj, the following relationship
(formula) for occupied cells is used,
cij = Ri + kj for all i,j
B 10 8 7 5
FACTORIES
C 13 3 9 12
D 4 6 8 3
B 10 8 7 5 0 70 5 2 2 2 1 7 7
C 13 3 9 12 0 30 3 6 6 - - - -
D 4 6 8 3 0 50 3 1 1 3 2 8 -
UP1 2 1 1 2 0
UP2 2 1 1 2 -
UP3 2 2 1 2 -
UP4 - 2 1 2 -
UP5 - 2 2 - -
UP6 - - 1 - -
UP7 - - 1 - -
Since Rim Requirement = m+n-1 = 4+5-1 = 8
Rim Requirement = number of stone squares ; 8 = 8
The above solution is non-degenerate so minimum transportation
cost we get :
A-1 = 2*25 = 50
A-2 = 4*5 = 20
B-3 = 0*15 = 0
C-2 = 3*30 = 90
D-4 = 3*20 = 60
TOTAL COST Rs.965
Now, we proceed to test its optimality by MODI Method.
Calculation of opportunity cost of water squares is as below :
A- 4 11-0-1 10
A- 5 0-0+1 1
B-1 10-1-2 7
B-2 8-1-4 3
B-4 5-1-1 3
C-1 13+1-2 12
C-3 9+1-6 4
C-4 12+1-1 12
C-5 0+1+1 2
D-1 4-2-2 0
D-2 6-2-4 0
D- 5 0-2+1 -1
It may be noted that total number of stone squares must be equal
to the m+n-1 i.e. rim requirement . If this condition is not satisfied
the solution is degenerate.
Such situation occurs in the following two cases :
SILOS 1 2 3 4 5
10 2 20 11
1 15 15
12 7 9 20
2 15 10 25
4 14 16 18
3 5 5 10
Require-
ment
5 15 15 15 50\50
Solution : Since Rim Requirement = m+n-1 = 3+4-1 = 6
But stone square = 5
This is a case of degeneracy because Rim Requirement Stone
Squares
We have introduced and epsilon in the least cost independent cell
MILLS
SILOS 1 2 3 4 SUPPLY
10 2 20 11
1 15 15
12 7 9 20
2 e 15 10 25
4 14 16 18
3 5 5 10
Require-
Ment 5 15 15 15 50\50
We calculated the values of unused square by using stepping
stone method
1 – 1 = 10-4+18-20+7-2 = 9
1 – 3 = 20-9+7-2 = 16
1 – 4 = 11-20+7-2 = -4
2 – 1 = 12-4+18-20+6 = 12
3 – 2 = 14-18+20-7 =9
3 – 3 = 16-18+20-9 =9
We make a closed loop path from the highest negative value i.e. -4
and proceed further. Since the value of cell 1 – 4 is least –ve and
the improved solution is shown below :
MILLS
SILOS 1 2 3 4 SUPPLY
10 2 20 11
1 5 10 15
12 7 9 20
2 25
10 15
4 14 16 18
3 5 5 10
REQUIR 5 15 15 15 50\50
-EMENT
Value of unused square by using stepping stone method.
1 – 1 = 10-4+8-11 = 13
1 – 3 = 20-9+7-2 = 16
2 – 1 = 12-7+2-11+18-4 = 10
2 – 4 = 20-7+2-11 =4
3 – 2 = 14-2+11-18 =5
3 – 3 = 16-9+7-2+11-18 = 5
Since the values of all opportunity cost of all squares cells is +ve.
So we get the optimum solution and rim requirement = stone
squares i.e.6 = 6