Question 1 Solve the following transportation problem for the optimum cost:

D1 01 02 03 Demand 6 4 6 70

D2 5 8 3 90

D3 1 7 9 80

D4 3 2 5 60

Supply 100 125 75

Solution The given transportation problem s of minimization type which is a balanced one.

Voggles Approximation Method D1 6 01 4 02 6 03 bj 70 2 2 2 0

D2 5
15

D3 1
80

D4 3

ai 100

Penalty 2 2 1 1

2
60

125

2 2 4 -

3
75

5 75 80 6 60 1 1 300 2 2 3 3

90 2 2 2 2

300

Total Transportation Cost = 30+75+260+120+225+80 = 790 RIM = m + n 1 =3+41=6

D1 6 05

D2 5
15

D3 1
80

3 2 8 5 10

D4 + -1 60

ai 100 125 75 300 300

ui 0 -2 -2

01 4 02 6 03 bj 70 2 90 80 3
75

8
65

7 5 9

3 60

vj

Since the cell evaluations for 01 - D4 is negative, optimum solution is not attained. In cost = 1 x 5 = 5 Therefore, new cost = 790 5 = 785 D1 6 01 4
70

D2 5
15

D3 1
80

D4 3
05

ai 100 125 75 300 300

ui 0 -1 -2

1 8 4 6 3
75

7 7 9 10 90 80

2
55

02 03 bj 70 3

5 4 60

vj

Since all the cell evaluations are positive, optimum solution is attained. Therefore, the optimum transportation cost is Rs 785.

Question 2 Solve the following transportation problem for the optimum cost:

D1 01 02 03 Demand 3 2 5 50

D2 1 6 1 60

D3 3 1 4 90

D4 5 3 8 100

Supply 120 95 85

Solution The given transportation problem is of minimization type which is a balanced one i.e. total capacity = total demand. Phase I Vogals Approximation Method D1 3 01 2 02 5 03 bj 50 25 0 1 1 1 1
25 25

D2 1 3

D3 5

D4
95

ai 120 95 0 95 5 0 25 0

Penalty 0 0 2 2

1
90

3
5

1 1 1 1

1
60

85 3 1 3

60 0 0

90 0 1 2 -

100 5 0 2 2 2 2

300 300

Total Transportation Cost = (3*25) + (5*25)+ (1*60) + (1*90) + (5*95) + 3*5)=75+125+60+90+475+15 = 840 RIM = m + n 1 =3+41=6

D1 3 25

D2 1 2 6 9 1 3

D3 5 0 1 +
90

D4 +
95

ai 120 95 85 300 300

ui 0 -2 2

01 2 02 5 + 03 Bj 50 60
25 60

3 8 -1 90

1 100

Vj

-1

Since the cell evaluation for 03 D3 is negative, optimum solution is not attained. In cost = 1 x 25 =25 Therefore, new cost = 840 25 = 815 D1 3
50

D2 1 1 6 1 8 1
60

D3 3 + 0 1 65

D4 5 3 8
25 70

ai 120 95 85 300 300

ui 0 -2 1

01 2 02 5 03 Bj 50 1 60

+
30

2 90 100

Vj

Since all the cell evaluations are positive, optimum solution is attained. Therefore, the optimum transportation cost is Rs 785.

Question 3. Solve the following transportation problem for the optimum cost:

D1 01 02 03 Demand bj SOLUTION: 4 3 1 50

D2 5 6 4 40

D3 3 7 1 90

D4 6 3 2 20

Supply ai 50 70 80 200

The given transportation problem is a balanced one which is of minimization type. Phase 1: To get Initial Basic Feasible Solution using VAM Penalty 1 1 1 1

D1 4 01 3 02 1 03 bj 50 2 1 1 1
50

D2 5
40

D3 3
10

D4 6

ai 50

3
20

70

0 0 0 3

1
80

2 80 200 20 200 1 3 3 0 -

40 1 1 1 1

90 2 4 -

Total transportation cost / Initial Basic Feasible solution = (3*50) + (5*40) + (3*10) + (1*80) + (3*20) = 150 + 200 + 30 + 80 + 60 = Rs. 520/RIM condition = m + n 1, Where m = number of rows and n = number of columns Here, number of allocations = 5 Since m + n 1 number of allocations, degeneracy occurs. Phase 2: MODI method D1 4 01 3
50

D2 5 1 6 1 4
E 40

D3 3 7 4 1
80 10

D4 6 3 3
20

ai 50 70 80 200 200

ui 0 0 -2

02 1 03 bj 50 40

2 1 90 20

vj

Since all the cell evaluations are positive, optimum solution is attained. Therefore, IBFS = Optimum cost = Rs. 520/Thus, the total minimum transportation cost is Rs. 520/-

Question 4.

A B C Demand

I 10 15 7 25

II 7 12 8 55

III 8 9 12 20

Capacity 45 15 40

The given TP is of minimization type which is balanced one. Therefore, we can solve the problem by VAM. Phase I VAM I A B C Demand Penalty
10 15 7

II
7

III
8

Capacity 45 5 15 40 15 100

Penalty 1/1/1 3/3/3 1/4

40
12 8 9

5 15
12

25 25 3

15 55 20 40 1/1/5 1/1/1

TOTAL TRANSPORTATION COST= 8X5 + 9X15 + 7X25 + 7X40 + 8X15 =750 RIM CONDITION m+n-1 3+3-1 =5 No. of allocations=5 RIM condition=No. of allocation

Phase II: Modi Method I 10 A

II
7 8

III 5
9 4

40
12 8 12

ai 45 15
3

ui 0 1 1

B C Bj vj

15 8 7

15 20 8

25 25 6

15 55 7

40 100

Since all the cell evaluations are non-negative, the optimum solution is Rs. 750.

Question 5. National Oil Company(NOC) has three refineries and four depots. Transportation costs per ton,capacities and requirements are as follows: D1 D2 D3 D4 Capacity (tons) 700 400 800

R1 R2 R3 Requirements (tons)

5 8 12 300

7 6 10 600

13 14 9 700

10 13 11 400

Determine optimal allocation of output. D1 D2 D3 D4 CAPACITY

R1

13

10

700

R2 R3 DEMAND

8 12 300

6 10 600

14 9 700

13 11 400

400 800 1900 2000

Step 1: Unbalanced The problem is not balanced i.e. Condition 1 is not satisfied. Therefore a Dummy is created. Step 2: Minimisation D1 R1 5 300 D2 7 200 D3 13 D4 10 200 CAPACITY 700 PENALTY 2/2/2/3/3

R2

400

14

13

400

2/2/2/7

R3

12

10

9 700

11 100 0 100

800

1/1/1/1/1

DUMMY

100

DEMAND PENALTY

300 5/3/3

600 6/1/1/1/3

700 9/4/-

400 10/1/1/1/1

2000

PHASE I: Initial Basic Feasible Solution: 1500+2000+1400+2400+6300+1100+0 = 14700 PHASE II: Test for Optimality: 1. No. of occupied cells= m+n-1 1. = 4+4-1 2. = 7 2. All cells are at independent positions.

V U U1=0

V1=5

V2=7

V3=8

V4=10

5 300

7 200

13

10 200 5

U2=-1

8 4

6 400

14 7

13 4 11 700 100 0 100 2

U3=1

12 6

10 2 0 5 3

U4=-10

All CE > = 0 Therefore there is an optimum solution. Optimum Cost = Rs 14,700/-

Question6. A company has three plants located at different places but producing an identical product the cost of production, distribution cost for each plant to the three different warehouses, the sale price at each warehouse and the individual capacities for both the plant and warehouse are given as follows: ' Plant Raw material Other expenses Distribution Cost to warehouse 1 2 3 Capacity of Plant 3 1 5 150 9 7 8 100 5 4 3 130 F1 15 10 F2 18 9 F3 14 12 Sale price 34 32 31 Warehouse Capacity 80 110 150

1) Establish a suitable table giving net profit / loss for a unit produced at different plants and Distributed at different warehouse 2) Introduce a suitable dummy warehouse / plant so as to match capacities of plants and Warehouses 3) Find a distribution pattern so as to maximize profit

Solution PROFIT MATRIX Plant F1 F2 F3 Demand 1 6 -2 3 80 2 6 -2 2 110 3 1 -4 2 150 Dummy 0 0 0 40 Capacity 150 100 130 380

Convert maximization problem into minimization problem by subtracting all the elements of the matrix form the highest value i.e. 6 REGRET MATRIX Plant F1 F2 F3 Demand Penalty 1 040 840 3 80 3/3/5/2 0110 8 4 110 4/-/-/3 5 1020 4130 150 1/1/6 Dummy 6 640 6 40 0/0/0 Capacity 150 100 130 380 Penalty 0/5/2/2/2/4 1/1/1/-

STEP 1 Balanced STEP 2 Minimization PHASE 1 Initial Basic Feasible Solution Production Schedule 40*0 - 0 40*8 - 320 110*0 - 0 20*10 - 200 130*4 - 520 40*6 - 240

Total

1280

PHASE 2 Test for optimality No. of occupied cells = m + n 1 = 3+ 4 1 =6 All cells are at independent positions U1=0 U2= 8 U3= 2
0

V1=0

V2=0
110

V3=2
5-(2) 3 10 0 20 12 2 130

V4= -2
6-(-2) 8 6 40 6-(0) 6

40 8 40 3-(2) 1 4-(2) 8-(8)

Since all cells are non negative there is optimum solution i.e. optimum transportation cost is Rs. 1280

Question 7. A company manufactures a certain product at two factories and distributes it to three warehouses. Each factory runs both a regular shift and when necessary, an overtime shift for any remaining production requirements. Production cost differ between factories, and the selling price of the product varies at the different warehouse locations. The pertinent information is given in Table 1 Table 1 Factory 1 2 Warehouse 1 2 3 Weekly Production Capability(Units) Regular Overtime 100 40 150 30 Unit Production Cost Regular Rs. 17 Rs. 18 Overtime Rs. 24 Rs. 23 Unit selling Price Rs. 35 Rs. 37 Rs. 34

Weekly Requirements Units 80 120 70

The objective is to select that combination of regular and overtime production which when allocated to shipping in an optimal fashion, will maximise profit. Questions: 1 Set up the transportation table for an initial solution 2. Obtain an optimum solution (Z = 3720) Solution Since the objective of the problem is to maximise profits, we form the profit matrix. To calculate the profit/unit: Add the regular/overtime production cost to the transportation cost of the respective factory and subtract the total from the unit selling price of the respective warehouses. Profit Matrix: Factory R1 O1 R2 O2 bj 1 12 5 13 8 80 2 13 6 17 12 120 Warehouse 3 11 4 8 3 70 ai 100 40 150 30 270/320

Since the give TP is unbalanced, we first balance it by creating a dummy row.

Factory R1 O1 R2 O2 bj

1 12 5 13 8 80

2 13 6 17 12 120

Warehouse 3 11 4 8 3 70

Dummy 0 0 0 0 50

ai 100 40 150 30 320/320

Since the Tp is a maximisation one, we convert it to minimisation type by forming a regret matrix and then solve it by VAM to get Initial Feasible Solution. Phase I: To get IFS Regret Matrix Factory R1 O1 R2 O2 Bj I II III IV V Warehouse 1 2 5 4
30

3 6
60

Dummy Ai 17 100 30 17
50

Penalty I II 1 1 1 4 4 1 5 5

III IV V 1 12 1 5 5

12 4 9
20

11 0
120

13 9 14 70 3 3 7

40 150 30 30 10
20

17 17 50 0 0 0 0 0

5 120 1 1 4 4 3 4

80
50 70

320

Total regret is 12*30=360 11*70=770 0*40=0 13*30=390 17*120=2040 8*20=160 0*10=0 =Rs 3720

Rim Conditions: No. of allocation = m+ n 1 = 7 Therefore we can solve it by Modi method. Phase II:Modi Method Factory F1/ R F1/OT F2/R F2OT Bj Vj Warehouse 1 2 5 4
30 3

3 6
70

Dummy 17
4

ai 100 40
40

Ui 0 4 -1 4

12
3

11
6

13
3

17 17
4 5

4
30

0
120

9 14
0 4

150 30
10

9
20

5 120 1

17 50 13

80 5

70 6

320

Optimality Test: Since all cell evaluations are positive/non negative, optimum solution is obtained. However since the cell evaluation for O2-2 is 0, an alternate optimum solution exists. Total Profit: From F1/R F1/R F1/O F2/R F2/R F2/O F2/O To W1 W3 D W1 W2 W1 D Quantity 30 70 40 30 120 20 10 Profit/Unit 12 11 0 13 17 8 0 Total 300 770 0 390 2040 160 0

Total Profit: Rs. 3720

Question 8. The given Problem is of minimization type and a balanced one thus we move on further with the Vogels Approximation Method. D1 01 6 02 4 03 6 DEMAND 70 D2 5 8 3 90 D3 1 7 9 80 D4 3 2 5 60 CAPACITY 100 125 75 300

VOGELS APPROXIMATION METHOD D1 O1 6 (5) O2 4 (65) O3 6 DEMAND 70 PENALTY 2,2,2,0 D2 5 (15) 8 3 (75) 90 2,2,2,2 D3 1 (80) 7 9 80 6 D4 7 2 (60) 5 60 1,1 CAPACITY 100 125 75 300 PENALTY 2,2,1,1 2,2,4 2,2,3,3

PHASE 1 IBF SOLUTION = 6*5 + 15*5 + 80*1 + 65*4 + 60*2 + 75*3 = 30+75+80+260+120+225 Ans =Rs.790

Phase II- Number of occupied cells M+ N -1=1 6=4+3-1 6=6 Since Phase II is satisfied we move on to ui,vj method

U/V

D1

D2

D3

D4

O1 O2 O3 V

6 (5) - -4 -- (65) -+ 6 |2| 6

-5 - (15)--- 1 -- (80)-8----------3 (75) 5 7----------9 1 |10|

--3 - + |-1| 2 -- (60) 5 4 |3|

0 -2 -2

Cell evaluation for all non allocation cells cost (u +v) Cell evaluation for allocation cells cost = u +v Minimum from negative i.e. 5 or 60

Thus minimum is 5 Therefore, reduction in cost = 5 *1 = Rs.5 New Cost = 790-5 = Rs.785 Since it is not yet optimal we create a new table again.

O1 O2 O3 V

D1 6 |1| 4 (70) 6 5 |3|

D2 5 (15) 8 |4|

D3 1 (80) 7 9 1 |7| |10|

D4 3 (5) 2 (55) 5 |4| 3

U 0 -1 -2

3 (75) 5

Since all cell evaluations are positive optimum solution is attained Therefore Transportation cost = Rs. 785

Question9: Destination Origin O1 O2 O3 Demand Solution The given transportation problem is of minimization type which is a balanced one. I) VAM Destination Origin O1 O2 O3 4 1
70

D1 4 1 3 70

D2 2 6 5 90

D3 1 3 4 80

D4 3 2 7 60 300

Supply 120 95 85 300

D1 2

D2 1
90

D3 3

D4

Supply (ai) 120 95 85

I 1 1 1

II 2 1 1

III 2 1 3

IV 3 2 7

30

6 5

3 4
80

2
25

7
5

Demand (bj)

70

90

80

60

300 300

I 2 3 2 1 II 2 2 1 III 2 1 IV 1 Total Transportation Cost = (2 X 90) + (3 X 30) + (1 X 70) + (2 X 25) + (TTC) (80 X 4) + (7 X 5) = 180+90+70+50+320+35

TTC = 745

Rim Condition = m + n - 1 = 3+41 = 7 1 =6 II) Destination Origin 4 O1 1 O2

where: m = no. of rows n = no. of columns

D1 2 2 -O 6 5 +O -3 70

D2 1
90

D3 3

D4

Supply (ai) 120

ui 0 -1 4

1 3 4 4 7
80

30

+O 95 -O
5 25

5 -1 90

O3

85 80 60 300 300

Demand (bj) vj

Since CELL EVALUATION O3D1 is negative, therefore optimum solution is not attained. O = Minimum {70, 5} O=5 Decrease in cost = (5 X 3) = 15 New Cost = 745 15 = 730 New Cost = 730

III) Destination Origin 4 O1 1 O2 O3 -O 65 3 +O

D1 2 2 6 5

D2

D3 1 +O 3

D4 -O

Supply (ai) 120 95

ui 0 -1 1

90

-2 3 1 4 -O 2 +O 7

30

5 2 90 2

30

85 3 60 3 300 300

80

Demand (bj) vj

70 2

80 3

Since CELL EVALUATION O1D3 is negative, therefore optimum solution is not attained. O = Minimum {30, 65, 80} O = 30 Decrease in cost = (30 X 2) = 60 New Cost = 730 60 = 670 New Cost= 670

IV) Destination Origin 4 O1 1 O2

D1 2 4 6 5
35

D2 1
90

D3 3

D4

Supply (ai) 120

ui 0 1 3

30

2 2 95

3 1 4

3 0 90 2

O3

7
50

60

85 3 60 1 300 300 70 0 80 1

Demand (bj) vj

Since all the CELL EVALUATIONS are positive, optimum solution is obtained. Optimum Transportation Cost = Rs. 670/-

Question10. Solve the following cost minimization transportation problem. 1 7 4 2 20 2 3 2 6 50 3 8 5 5 50 4 6 10 1 60 SUPPLY 60 100 40 180\200

A B C DEMAND

Solution As the problem is unbalanced, we balance it and then solve the as the problem as minimization type. Phase I: We solve the problem by using VAM Method. 1 A B C DEMAND 7 4 (20) 2 20 2 3 3 3 4 4 2 3 (20) 2 (30) 6 50 1 1 1 1 2 2 3 8 5 (50) 5 50 0 3 3 3 5 X 4 6 (20) 10 1 (40) 60 Dc 0 (20) 0 0 20 0 0 0 X X X SUPP LY 60 100 40 200 Penalty 3 3 3 4 X X 2 2 2 2 2 2 1 X X X X X

5
4 X X X X

Thus, total transportation cost: 3 x 20 = 60 6 x 20 = 120 0 x 20 = 0 4 x 20 = 80 2 x 30 = 60 5 x 50 = 250 1 x 40 = 40 Rs 160 Rim Conditions: m + n 1 = 3 + 5 -1 = 7 Number of allocations = 7 Thus, m + n 1 = Number of allocations, rim conditions are satisfied. Phase II: 1 A B C DEMAND Vj 7 4 (20) 2 20 5 2 2 2 3 (20) 2 (30) 6 50 3 8 3 8 5 (50) 5 50 6 4 2 4 6 (20) 10 1 (40) 60 6 5 Dc 0 (20) 0 0 20 0 1 5 SUPPLY 60 100 40 200\200 Ui 0 -1 -5

Note: Numbers in blue = Allocated cells Numbers in red = Cell evaluations Optimality Test: As all the cell evaluations are non negative, the optimum solution is attained. Ans: The total minimum transportation cost is Rs 610

Question11. Solve the following transportation problem for maximum profit. In the following table profit is given in Rs. 100/Solution: The given transportation problem is of maximization type. Therefore we convert it into minimization type and solve using VAM method. A X 13 7 200 Y 17 180 Z 11 22 20 180 DEMAND PENALTY 2 /6 /6 /0 320 11 /4 /4 /4 100 1 /1 /1 /1 18 100 14 100 400 5 /2 /0 /0 1000 5 15 7 400 300 6 /6 /3 / 8 500 8/ 8 /2 /3 B 19 X C 0 D SUPPLY 200 PENALTY 0 /0 /0 /0

X = 7 x 200 = Y = 18 x 100 = Y D = 7 x 400 = Z A = 11 x 180 = Z B = 20 x 22 = Z C = 14 x 100 = TTR REGRET SOLN

1,400 1,800 2,800 1,980 440 1,400 9,820

RIM CONDITIONS: No. of allocations = 6 m+n1=6 Therefore no. of allocations = m + n 1 Therefore it is a GENERATE Solution and we can check the optimality using MODI method.

MODI METHOD: A X 13 17 Y 17 10 Z 11 180 DD Vj 180 -4 22 20 320 7 18 100 14 100 100 -1 400 -4 7 200 + 15 5 5 18 400 + -6 1000 300 15 B 19 X C 0 20 7 4 500 11 D SS 200 Ui 0

Since, the cell evaluation of D2 is -6, it implies the solution is not optimum. Hence we form a loop. = min {20, 400} = 20 Therefore the urgent reduces by = 20 x 6 = 120 Therefore Next Regret = 9,820 120 = 9,700

To check if the solution is optimum we use MODI Method again: A X 13 17 Y 17 10 Z 11 180 DD Vj 180 -4 320 7 22 0 18 120 14 100 100 -1 7 200 15 5 5 20 400 -4 1000 B 19 X C 0 20 7 380 300 15 4 500 11 D SS 200 Ui 0

Since all the cell evaluations are non negative, optimum solution is obtained. FROM X Y Y Z Z Z TO B B D A C D QUANTITY 200 120 380 180 100 20 PROFIT/UNIT 18 7 18 14 11 20 TTR PROFIT 3,600 840 6,840 2,520 1,100 400 Rs. 15,300

Therefore maximum profit is Rs. 15,300/To check: Optimum profit = ( max. profit/unit x total quantity) optimum regret = (25 x 1000) 9,700 = 25,000 9,700 = 15,300

Question 12: Given below is the transportation problem with transportation costs and initial feasible solution. D1 O1 O2 O3 5 6 (200) 4 (50) D2 10 8 2 (100) 100 D3 4 (100) 7 5 (50) 150 D4 5 2 (50) 7 50 SUPPLY 100 250 200

DEMAND 250

State with reasons, whether: 1) The given solution is feasible and degenerate 2) The solution is optimal 3) Can there be more than one optimal solution in this problem? 4) How will you test the optimality test of the solution is the cell cost changes? (take example, O3 D3 changes from Rs.5/- to Rs. 2/- )

SOLUTION D1 O1 O2 O3 5 6 (200) 4 (50) D2 10 8 2 (100) 100 D3 4 (100) 7 5 (50) 150 D4 5 2 (50) 7 50 550 SUPPLY 100 250 200 550

DEMAND 250

TOTAL TRANSPORATION COST O1 D3 O2 D1 O2 D4 O3 D1 O3 D2 O3 D3 4 X 100 6 X 200 2 X 50 4 X 50 2 X 100 5 X 50 TOTAL 400 1200 100 200 200 250 Rs. 2350/-

RIM CONDITION: - m + n 1 = no. of allocations, Where, M = no. of origins N = no. of destinations Therefore, m + n 1 = 3 + 4 1 = 6 No. of allocations = 6
Therefore the rim conditions have been satisfied as m +n 1 = no. of allocations = 6. Therefore, the solution is non- degenerate.

PHASE II (MODI METHOD) D1 O1 O2 O3 bj Vj 5 6 (200) 4 (50) 250 3 10 8 2 (100) 100 1 D2 D3 4 (100) 7 5 (50) 150 4 5 2 (50) 7 50 550 -1 D4 ai 100 250 200 550 ui 0 3 1

Therefore, Cell Evaluation (CE) = cost of the cell (u + v) for all non- allocated cells.

D1 O1 O2 O3 bj Vj 5 2 10 8

D2 9 4

D3 4 (100) 7 5 (50) 150 0 5

D4 6

ai 100 250 7 200 550 550

ui 0 3 1

6 (200) 4 (50) 250 3

2 (50) 7 50

2 (100) 100 1

-1

Therefore, since all the Cell Evaluations are non-negative, optimum solution is attained. ANSWER: The Total minimum transportation cost is Rs. 2350/However, since one Cell Evaluation (CE) of O2 D3 is ZERO, an alternate optimum solution exists

D1 O1 O2 O3 bj Vj 5 2 10 8

D2 9 4

D3 4 (100) 7 0 +0 5 (50) -0 150 5

D4 6

ai 100 250 7 200 550 550

ui 0 3 1

6 (200) -0 4 (50) +0 250 3

2 (50) 7 50

2 (100) 100 1

-1

= minimum of the negative theta values, therefore = min { 50, 200 } = 50

Therefore, reduction in cost = 50 x 0 Reduction in cost = Rs. 0. Therefore, new cost = 2350 0 New Cost = Rs. 2350/D1 O1 O2 O3 bj Vj 5 2 10 8 D2 9 4 D3 4 (100) 7 5 150 1 4 50 5 D4 6 ai 100 250 7 200 550 550 3 -1 ui 0 3 1

6 150 4 250 100

2 (50) 7 50

2 (100) 100

ANSWERS: 1) The initial solution was feasible because, all the Cell Evaluations were nonnegative. The solution was also non-degenerate because the Rim Conditions ie. m + n 1 = no. of allocations = 6 has been satisfied. 2) The initial feasible solution was the optimal solution for the problem as all the Cell Evaluations ( CE) were non-negative. 3) Yes, there can be more than one optimal solution for this problem as one of the Cell Evaluation ( O2 D3 ) was ZERO. Therefore an Alternate Optimum Solution exists. The working of which has been shown. 4) If the cost of O3 D3 changes from Rs. 5/- to Rs. 2/- then the problem will be solved in the following manner. (next page)

Question13: Firm PQR has the following schedule for transporting inventory in the network. W1 W2 W3 W4 F1 6 2 3 8 F2 12 13 6 13 F3 8 3 8 4 F4 5 4 1 6 DEMAND 180 160 160 100 Find an initial feasible solution by using VAM Answer the following questions: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Is the above solution feasible? Is it a degenerate solution? Find an Optimum Solution to the above problem? Find the associated costs to this solution? Is there any alternate solution to the above problem? What is the opportunity cost to the route F1 to W3? If the management wants to transport to the route F2 to W2 will that increase the cost? What will the rate of increase in the cost? A transporter is willing to offer discount on route F1 to W4. By what rate he must drop the rate? If he wants a minimum of 10 units quantity should the offer be accepted? The production capacity of F1 is reduced by 2 units and to compensate this F3 capacity is raised. What impact will this have on the transportation cost? SUPPLY 100 100 150 250

Solution: The above transportation problem is balanced and is of minimization type: PHASE I: to get IBFS using VAM F1 F2 F3 F4 DEMAND W2 W3 3 2 100 12 13 6 100 8 8 3 50 5 4 1 180 10 60 180 160 160 2/2 C.P.U 2 6 3 4 5 4 1 TOTAL W1 6 W4 8 13 4 100 6 100 600 Penalty 1/1/1 1/1/1 Total transportation cost: UNITS 100 100 50 100 180 10 60 2/2 TOTAL 200 600 150 400 900 40 60 2350/250 3/3/3/1 SUPPLY 100 100 150 penalty 1/1/4/4 6 1/1/5

Ans 1) the above solution is feasible as the quantities transported to the various destinations are positive & also the Solution so obtained is non negative. Ans 2) the solution is non-degenerate as m + n 1 = no of allocations. 4+31=7 7=7 Therefore solution is non-degenerate.

Ans 3) PHASE II: To test for optimum solution using MODI method. F1 F2 F3 F4 bj Vj W1 6 3 12 2 8 4 5 180 180 3 W2 W3 2 3 100 4 13 6 100 4 8 3 50 8 4 1 10 60 160 2 160 -1 W4 8 5 13 3 4 100 6 1 100 600 3 250 2 150 1 100 7 Ai 100 Ui 0

Since, all Cell Evaluation (CE) are positive, optimum solution is attained. Optimum transportation cost = Rs. 2350/Ans 4) associated cost to the above IBF solution is Rs. 2350/Ans 5) there is no alternate optimum solution to the above problem as none of the CE are zero i.e. CE>0 Ans 6) the opportunity cost from F1 to W3 is Rs. 4/ unit. Ans 7) if the management wants to transport to the route F2 to W2, it will increase the cost and the rate at which it will increase is RS 4/- unit as the CE is Rs. 4 Ans 8) if the management wants to transport to the route F2 to W4, the rate that it should drop should be less than 10. I.e. cost =9 OR <9 (u + v = 10)

Ans 9) if the transporter wants to transport minimum 10 units on F2 to W4, the transportation cost would be: (if costs are Rs 9)

F1 F2

W1 6 3 12 2

W2 2 100 13 4 3 4 50 4 10

W3 3 4 6 100

W4 8 5 9 -1

Ai 100 100

Ui 0 7

F3 F4 bj Vj

8 5

8 8 1 60 160 2 -1

4 100 6 1 100

150 250

1 2

180 180 160 3

600 3

= 10 min (100, 10, 100) Reduction in cost = 2350 (1 * 10) = Rs. 2340/-

F1 F2

W1 6 2 12 2

W2 2 100 13 5 3 60 3 4

W3 3 3 6 90

W4 8 5 9 10 4 90 7 6 70 2 100

Ai 100 100

Ui 0 6

F3 F4 bj Vj

8 5 180 180 4

8 1 1 160 2 0

150 250

1 1

160

600 3

Since, all Cell Evaluation (CE), optimum solution is attained. When the transportation cost is reduced and minimum of 10 units are to be transported on the route F2 to W4, reduction in costs are Rs. 10/Optimum transportation cost = Rs. 2340/Ans 10) if production capacity at F1 is reduced to 98 and increased in F3 to 153, then transportation cost. Phase I: solve by VAM F1 F2 F3 F4 W1 6 12 8 5 180 W2 2 98 13 3 52 4 10 1 60 6 6 100 8 4 100 250 3/3/1/1 152 1/1/1/5 13 100 6 W3 3 W4 8 SUPPLY 98 penalty 1/1/4/4/4

DEMAND

180

160

160

100 600 2/2/2 TOTAL 196 600 156 400 900 40 60 2352/-

Penalty 1/1/1//1 1/1/1/1 2/2/0 Transportation cost UNITS 98 100 52 100 180 10 60 C.P.U 2 6 3 4 5 4 1 TOTAL

The transportation cost is increased by Rs 2/-. The above solution is non-degenerate as Rim conditions are satisfied (m+n-1= no of allocations). Phase II: since there is no change in the cost per unit & therefore CE >= 0 Thus optimum transportation cost in this case is Rs.2352/-

Question14: Solve the following T.P for optimum cost D1 O1 O2 O3 DEMAND SOLUTION: The given T.P is of minimisation type and a balanced one. Therefore we solve it by using VAM PHASE 1- VAM , To get initial feasible solution D1 O1 O2 O3 Dd penalty 4 x 1 70 3 x 70 2/2/2 1 80 80 2/2/x 3 x 6 x 50 3/x 5 x 4 x 3 15 100 1/1/1 D2 1 50 5 15 95 300\300 1/2/0 D3 2 70 85 2/2/4 D4 Ss 120 penalty 1/2/2 4 1 3 70 D2 5 3 1 80 D3 1 4 6 50 D4 2 5 3 100 SUPPLY/CAPACITY 120 85 95

TOTAL TRANSPORTATION COST O1D3 = 1*50 = 50 O1D4 = 2*70 = 140 O2D1 = 1*70 = 70 O2D4 = 5*15 = 75 O3D2 = 1*80 = 80 O3D4 = 3*15 = 45 Rs. 460 Rim conditions m + n 1 = no. of allocations = 6 therefore it is a non-degenerate solution.

Therefore we now solve it by modi method.

PHASE 2 MODI METHOD D1 O1 O2 O3 4 6 1 70 3 4 Dd Vj 70 -2 1 80 80 0 50 1 3 0 6 4 5 5 4 0 3 15 100 2 300\300 D2 1 50 5 15 95 1 D3 2 70 85 3 D4 Ss 120 Ui 0

Since all the cell evaluations are non negative, optimum solution is attained. OPTIMUM TRANSPORTATION COST = Rs. 460/-

Question 15. D1 4 3 1 50 D2 5 6 4 40 D3 3 7 1 90 D4 6 3 2 20 Supply Capacity 50 70 80 200

O1 O2 O3 Demand

Solution: The given Transportation Problem is of minimization type which is balanced one (as Total capacity = Total demand) Phase 1: To get the initial feasible solution, solving by Vogels Approximation Method or VAM.

O1

D1 4

D2 5 40

D3 3 10 7

D4 6

ai

Penalty 1/1/1/-

50
O2 3 50 O3 1 4 1 80 bj Penalty 2 6 3 0/0/0/0/-

70
20 0/-

80 50
2/1/1/1/-

40
1/1/1/1/-

90
2/4/-

20
1/3/3/-

200

Calculation of Total Transportation Cost: Route O1-D2 O1-D3 O2-D1 O2-D4 O3-D3 Cost (Rs.) Quantity (units) 5 40 3 10 3 50 3 20 1 80 Total Transportation Cost Total (Rs.) 200 30 150 60 80 520

Rim Conditions: No. of allocations = 5 m+n1=3+41=6 Therefore, m + n 1 = No. of allocations

Degeneracy occurs and the solution that is obtained is called degenerate solution. To remove this degeneracy, we introduce epsilon (E) so that m + n 1 = No. of allocations. The position of Epsilon is chosen in such a way that it does not form a closed loop. Phase 2: Modi Method D1 4 1 O2 3 50 O3 1 E bj Vj 4 1 6 1 1 80 D2 5 40 7 4 2 1 D3 3 10 3 D4 6 3 ai Ui 0

O1

50
0

70
20 -2

80 200

50
3

40
5

90
3

20
3

Since all the cell evaluations are positive, optimum solution is attained. Optimum Transportation Cost = Rs. 520

Question 16.

D1 1 O1 5 O2 8 O3 TOTAL DEMAND 50 7 3 3

D2 4 6 1

D3 2 1 2

D4

SUPPLY 50 70 180

70

80

100

300

Find the optimum solution and also the transportation cost :: SOLUTION: The above Transportation problem is of the minimization type and is a balanced one. Phase1: Solving by Vogels Approximation Method or VAM.

D1 1 O1 5 O2 8 O3 TOTAL DEMAND PENALTY 4 50 7 50 3 3

D2 4 6 70 1

D3 2

D4

SUPPLY 50

PENALTY 1 2/2/2

1 70 2 80 100 100 1/1 180 300

1/1/5

70 0/4/4

80 3/5

Therefore Total Transportation cost is = 1 X 50 + 3 X 70 + 1X 80 + 2 X 100 = 50 + 210 +80 +200 = Rs. 540/Phase 2: Test for optimality using MODI method. Since, RIM conditions are not satisfied i.e. m + n 1 not equal no. of allocations( i.e. 4 in this case), degeneracy occurs. Therefore, EPSILON IS USED (E)

D1 1 O1 O2 81 O3 TOTAL DEMAND bj vj 50 1 7 50 50 5 74 3 34

D2 +Q -1 Q 70 3 70 4

D3 41 3 60 6 1 80 80 1 2 1 2

D4 Q E +Q E 100 100 2

ai 50

ui 0 -

70 180 300

1 0

Q= min (E, 70) Q= E Reduction in cost = 540 (1 X E) = 540 0 = Rs. 540.

D1 1 O1 O2 82 O3 bj vj 1 50 6 50 51 4 E 3

D2 3 40

D3 2-1 4 60 1 6 1 3 80 80 0 2

D4 1

ai 50 70

ui 0

70 74

E 180 100 100 1 300

0 1

70 3

Since, Cell evaluations are positive, there is optimal solution. Therefore, optimum solution or optimum transportation cost = Rs. 540/-

Question17. Cement manufacturing company wishes to transport its three factories P,Q and R to five distribution depots situated at A,B,C,D and E. The quantities at the factories per week, requirements at the depots per week and respective transportation costs in Rs. Per tonne are given in the table below: Factories P Q R Tonnes Required A 4 2 3 22 B 1 3 5 45 DEPOTS C 3 2 2 20 D 4 2 4 18 E 4 3 4 30 Tonnes Available 60 35 40 135

Determine the least cost distribution programme for the company. If the transportation cost from R to D is changed to Rs.2/- per tonne, does this affect the optimal allocation? If so, determine the revised schedule.
SOLUTION: The above Transportation problem is of the minimization type and is a balanced one. Phase1: Solving by Vogels Approximation Method or VAM.

Factories
A P Q R Tonnes Required PENALTY 5 1/1/1/1/ 2/-/-/1 /4 17 2 5 3 22 5 45 3 B 45 1

DEPOTS C 3 2 20 2 20 0/1/1//4 18 15 2/2/-//1/1/1/1/ 0 4 30 D 4 18 2 3 15 E 15 4

Tonnes Available
60 15 35 17 40 20 15 135

PENALTY 2/1/1/0/0 1/0/0/1/1/1/1/1/1

Therefore Total Transportation cost is = 45*1+15*4+17*2+18*2+5*3+20*2+15*4 = 45+60+34+36+15+40+60 =290 (1) Z= Rs. 290 Phase 2: Test for optimality using MODI method. Rim Conditions: No. of allocations = 7 m+n1=5+31=7 Therefore, m + n 1 = No. of allocations A 4 -3 P 1 2 Q 17 3 R 5 bj Vj 4 20 1 15 5 -1 3 2 1 4 -3 18 4 40 0 0 3 -0 45 2 -1 1 2 1 3 -3 35 -1 15 B 1 C 3 -2 D 4 -3 E 4 ai 60 Ui 0

22
3

45
1

20
2

18
3

30
4

135

Since all the cell evaluations are positive, optimum solution is attained. Optimum Transportation Cost = Rs. 290 If the cost from R to D is changed to Rs. 2/- per tonne, then the corresponding CE becomes (-1). As CE is ve, therefore optimum solution does not remain optimum, so form a loop. A 4 -3 P 1 2 Q 17 3 R 5 4 20 -1 15 5 -1 3 2 1 2 -3 18 4 40 0 0 3 -0 45 2 -1 1 2 1 3 -3 35 -1 15 B 1 C 3 -2 D 4 -3 E 4 ai 60 Ui 0

bj Vj

22
3

45
1

20
2

18
3

30
4

135

Reduction in cost = 290-1(5) =285 A B 4 -2 1 P 2 45 2 3 -1 Q 2 22 2 -2 5 -1 R 4 0 bj 22 45 Vj 2 1

C 3 -2 1 2 -2 0 2 20

D 4 -2 2 2 13 2 5

E 4 15 3 -4

ai 60 35 -1

Ui 0 0 0

4 40 15

20
2

18
2

30
4

135

Reduction in cost = 285 1(13) =272 A 4 -3 P 1 2 Q 22 3 -3 R 0 bj Vj 4 20 18 2 5 -1 3 2 1 2 1 4 40 0 13 3 -0 45 2 -1 1 2 -1 0 3 35 -1 15 B 1 C 3 -2 D 4 -4 E 4 ai 60 Ui 0

22
3

45
1

20
2

18
2

30
4

135

Since all the cell evaluations are positive, optimum solution is attained. Optimum Transportation Cost = Rs. 272

Question 18. D1 O1 O2 O3 Demand Solution: D1 O1 O2 O3 Demand 1 4 3 70 D2 2 1 3 80 D3 6 2 4 100 D4 1 5 2 40 Dummy column 0 0 0 10 Supply capacity 105 110 85 300 1 4 3 70 D2 2 1 3 80 D3 6 2 4 100 D4 1 5 2 40 Supply capacity 105 110 85 300

The above transportation problem is of minimization type which is a balanced one. D1 O1 O2 O3 1

D2 2 1
10

D3 6 2
100

D4 1
35

Dummy Supply capacity 0 105 35 0 0

I 1 1 2

II III IV V 1 1 1 1 1 1 4 1 1 1

4 3

5 2
5

110 10 85 75
5

3
70

4 100 2 2 2 2 2

demand 70 I II III IV V 2 2

80 70 1 1 1 1 1

40 5 1 1 1 1 1

10 0

300

Total transportation cost is 1*70 =70 1*35 =35 1*10=10 2*100=200 3*70=210 2*5=10 0*10=0 = 535

No. of allocation = m+ n 1 = 7 Therefore we can solve it by modi method. D1 O1 O2 O3 demand Vj 1

D2 2 1
10

D3 6 2
100

D4 1
35

Dummy Supply capacity 0 5000 0 0

Ui 0 -1 1

4 3 3000 1

5 2
5

4000 7000 16000

3
70

4 3500 3

2500 2

4000 1

3000 -1

Cost evaluation- since all the cell evaluations are positive, optimum solution is attained Therefore the optimum transportation cost is Rs. 535

Question 19 D1 O1 O2 O3 demand Solution: D1 O1 O2 O3 demand 15 25 12 3000 D2 24 20 12 2500 D3 11 14 22 3500 D4 Dummy column 12 0 16 0 13 0 4000 3000 Supply capacity 5000 4000 7000 16000 15 25 12 3000 D2 24 20 12 2500 D3 11 14 22 3500 D4 12 16 13 4000 Supply capacity 5000 4000 7000 16000

The above transportation problem is of minimization type which is a balanced one. D1 O1 O2 O3 15 25 12

D2 24 20 12
2500

D3 11
2500

D4 12
2500

Dummy Supply capacity 0 5000 2500 0 3000 0 3000 0 4000 1000 7000 4500
1500

II III IV V 1 2 1 1 2 9 1 2

11 1 14 2 12 0

14
1000

16 13
1500

22 3500 3 3 3 3 3

demand 3000 I II III IV V 3 3 3

2500 8 8

4000
2500

16000

1 1 1 1 4

Total transportation cost is 3000*12=36000 2500*12=30000 2500*11=27500 1000*14=14000 2500*12=30000 1500*13=19500

=15700 No. of allocation = m+ n 1 = 7 Therefore we can solve it by modi method. D1 O1 O2 O3 demand Vj 15 4 25 11 12 3000 3000 11 D2 24 13 20 6 12 2500 2500 11 D3 11 14 22 3500 12
2500 1000 10

D4 12 2500 16 1 13 1500 4000 -3

Dummy column 0 3 0 3000 0 3 3000

Supply capacity 5000 4000 7000 16000

Ui 0 3 1

Cost evaluation- since all the cell evaluation are positive, optimum solution is attained Therefore the optimum transportation cost is Rs. 157000

Question 20. D1 O1 O2 O3 O4 Demand 7 12 7 9 120 D2 10 9 3 5 100 D3 5 4 11 7 110 Supply capacity 90 50 80 60 330\300

Solution: Since the above transportation problem is of minimization type but an unbalanced one, we first balance it by adding a dummy row. D1 O1 O2 O3 O4 Dummy Demand 7 12 7 9 0 120 D2 10 9 3 5 0 100 D3 5 4 11 7 0 110 Supply capacity 90 50 80 60 50 330

Phase I: To get Initial Feasible Solution Solve by VAM D1 D2 D3 Supply capacity O1 7 10 5 90 30

I 2 5 4 2

II III IV V 2 5 4 2 4 2 2 2 2 2 2

O2 O3 O4 Dummy

12 7 9
40

9 3
80

4
50

50 80 80 40 50 330

11 7
20

5 0
50

0
70

0 110
60

Demand 120 I II III 7 0 0

100
20

3 2 2

4 1 2

IV V

0 0

2 2

Total transportation cost is 7*30=210 5*60=300 4*50=200 3*80=240 9*40=360 5*20=100 0*50=0 =Rs 1410 Optimality Test: Rim Conditions: No. of allocation = m+ n 1 = 7 Therefore we can solve it by Modi method. Phase II:Modi Method O1 O2 O3 D1 7
30

D2 10
7

D3 5
60

Ai 90 50
50

Ui 0 -1 0

12
6

9
7

4 11 -
6 80

7 +
0

80

O4 Dummy Bj Vj

9 -
40

5 +
20

7
0

60 50
2

2 -7

0
50

0
4

0 110 5

120 7

100 3

330

Since, Cell Evaluation O3-D1 is 0, there is alternate optimum solution. = min {40, 80 } = 40 Reduction in Cost = 1410 (0*40) = 1410

O1 O2 O3 O4 Dummy Bj Vj

D1 7
30

D2 10
7

D3 5
60

Ai 90 50
50

Ui 0 -1 0 2 -7

12
6

9
7

4 11
40 6

7
40

3 5
0 60

80 60
0

9 0
50

7 0
2 2

0 100 3

50 330

120 7

110 5

Cost evaluation- since all the cell evaluation are positive, optimum solution is attained Therefore the optimum transportation cost is Rs. 1410

Question 21.
A company has three factories at locations, A, Band C, which supplies three warehouses located at D,E & F. Monthly factory capacities are 10, 80 & 15 units respectively. Monthly warehouse Requirements are 75, 20 & 50 units respectively. Unit shipping costs in Rs. are given below:

D A B C Demand 7 12 7 9 120

E 10 9 3 5 100

F 5 4 11 7 110

Supply capacity 90 50 80 60 330\300

The penalty costs for not satisfying the demand at warehouses D, E & F are Rs.5/-. Rs. 3/- & Rs. 2/- per unit respectively. Determine the optimal distribution for the company using any of the

known algorithms. (Z=Rs.595) Solution: Step 1: Balance Step 2: Minimize Phase I: To get Initial Feasible Solution Solve by VAM D A B C 5 6
60

E 1
10

F 7 6
10 10

Supply capacity 10 80 15 40
40

I 4 2 1 1

II III IV x 2 1 1 2 1 x 2 x

4 2
15

5 2 50 1 1 3 3

PENALTY 5 (Dummy) Demand I II 75 2 2

3 20

145

III IV

3 6

2 4

1 6

Initial basic feasible solution: 1*10=10 6*60=360 4*10=40 6*10=60 3*15=45 2*40=80 =Rs 595 Optimality Test: Rim Conditions: No. Of allocations = m+ n 1 = 5 Therefore we can solve it by Modi method. Phase II: Modi Method v Vi=3 u Ui=0
5-3 2

V2=1
1 10

V3=3
7-3 4

U2=3 U3=0

6 60 3 15

4 10 2-1 1

6 10 5-3 2 2 40 2

U4=-1

5-3 2

3-1

Since, all cell evaluations are positive. Thus this is the optimum solution. Thus, optimum cost is Rs.595/- (answer)

Question 22. A company has factories at F1, F2, F3 which supply warehouses W1, W2, W3. Weekly factory requirements are 200, 160 & 90 units respectively. Unit shipping costs in rupees are as follows

W1 F1 F2 16 14

W2 20 8

W3 12 18

F3 26 24 16 Determine the optimal distribution cost for this company to minimize shipping cost. Note- Since demand was not stated in the sum, I have assumed it to be 150.

W1 F1 F2 F3 Demand 16 14 26 150

W2 20 8 24 150

W3 12 18 16 150

Supply 200 160 90

Solution The given transportation problem s of minimization type which is a balanced one. Vogels Approximation Method W1 16 F1 14 F2 26 F3 bj 150 2 2 2 150 12 10 140

W2 20 12

W3

ai 4 4 4 200 6 4 4

60

8
150

18 160 16
90

24

8 10 90 450

150 450 4 4 4

Total Transportation Cost = 2240+140+1200+720+1440 = 5740 RIM = m + n 1 =3+31=5

W1 16
140

W2 20 10 8
10 150

W3 12
60

ai 200 160 8

ui 0 -2 4

V1 14 V2 26 V3 bj vj 150 16 6 150 10 24

18 16
90

90 450

10 150 450 12

Since the cell evaluations are positive, optimum solution is attained. Therefore, the optimum transportation cost is Rs 5740.

Question23 The following table shows all the necessary information on the availability of supply of each warehouse, the requirement of each market and the unit transportation cost in rupees from each warehouse to each market: P A B C Requirement 6 5 5 7 Q 3 9 7 12 R 5 2 8 17 S 4 7 6 9 Supply capacity 22 15 8 45

The shipping clerk has worked out the following schedule from experience: 12 units from A to Q, 1 unit from A to R, 9 units from A to S, 15 units from B to R, & units from C to P and 1 unit from C to R. 1) Check and see if the clerk has optimal schedule 2) Find the optimal schedule and minimum total transportation cost 3) If the clerk is approached by a carrier of route C to Q who is willing to reduce the rate in hope of getting some business, by how much the rate should be reduced before the clerk will offer him business. Solution 1) Shipping Clerks Matrix P A B C Requirement 6 5 5 7 Q 3 9 7 12
12

R 5 2 8 17
1 15 1

S 4 7 6 9
9

Supply capacity 22 15 8 45

Total transportation cost as per the Shipping Clerk A-Q 3*12 = 36 A-R 5*1 = 5 A-S 4*9 = 36 B-R 2*15 = 30 C-P 5*7 = 35 C-R 8*1 = 8 Total 150

Check for Optimality P A B C Requirement Vj 6 5 5 7 2

Q 3 9 7 12 3
12 9 1

R 5 2 8 17 5
1 15 1

S 4 7 6 9 4
9 6 -1

Supply capacity 22 15 8 45

Ui 0 -3 3

Since all the cell evaluation are not positive optimum solution is not attained.

2) Therefore we solve it by Modi method Modi Method P Q R

S 4 7 6 9 4

6 4 3 12 5 +Q A 5 6 9 9 2 B 5 7 7 1 8 -Q C 12 17 Requirement 7 2 3 5 Vj Min Q = (1, 9) Q=1 Reduction in Cost = 1*1 = 1 New Cost = Old Cost Reduction in Cost 150 1 = 149 Check for Optimality P A B C Requirement Vj 6 5 5 7 3
3 5 7

Supply capacity -Q 9 22 6 15 +Q -1 8 45

Ui 0 -3 3

Q 3 9 7 12 3
12 9 2

R 5 2 8 17 5
2 15 1

S 4 7 6 9 4
8 6 1

Supply capacity 22 15 8 45

Ui 0 -3 2

Since all the cell evaluations are positive, optimum solution is attained. Therefore the optimum transportation cost is Rs.149. 3) The carrier should reduce the rate by Rs 3 to get some business from the clerk. Carriers rate should be Rs

Question 24. A company manufacturing air coolers has two plants located at Mumbai and Kolkata with a weekly capacity of 200 units and 100 units respectively. The company supplies air coolers to their 4 showrooms at Ranchi, Delhi, Lucknow and Kanpur which have a demand of 75,100,100 & 50 units respectively. The cost of transportation per unit is shown in the following table: MUMBAI KOLKATA RANCHI 90 50 DELHI 90 70 LUCKNOW 100 130 KANPUR 100 85

The given transportation problem is of minimization type but is unbalanced since the demand is not equal to the supply so we add a dummy row. Plants Mumbai Kolkata Dummy Demand Ranchi 90 50 0 75 Delhi 90 70 0 100 Showrooms Lucknow 100 130 0 100 Kanpur 100 85 0 50 Supply 200 100 25 325

The transportation problem is of minimization type and is balanced (demand = supply) Phase 1 To get initial basic feasible solution VAM/Penalty Method Plants Mumbai Kolkata Dummy Demand Penalty Ranchi 90 50-75 0 75 50 40 Delhi 90-75 70-25 0 100 70 20 20 20 Lucknow 100-75 130 0-25 100 100 30 30 Kanpur 100-50 85 0 50 85 15 15 15 Supply 200 100 25 325 Penalty 0/0/10/10 20/20/15/15 0/-

Total Transportation cost Kolkata Ranchi 50 *75 = 3750 Mumbai-Delhi 90 *75 = 6750 Kolkata-Delhi 70 *25 = 1750 Mumbai-Lucknow 100*75 = 7500 Mumbai-Kanpur-100*50 = 5000

Dummy-Lucknow0 *25 = 0___ Rs 24, 750 RIM CONDITION If number of allocations is equal to m+n-1. we can use Modi Method .m+n-1 =6 Phase 2- Modi Method/Test for optimality 1.No. of occupied cells = m+n-1 2 All cells are at independent positions. 90- (70) 20 50 75 0- (-30) 30 V1= 70 V2=90 70 25 0- (-10) 10 90 75 100 75 130 (80) 50 0 25 V3=100 + 100 50 85-(80) 5 0-(0) + 0 V4=100 U2=-20 U3=-100 Vj ui U1=0 -

Since all evaluations are positive, optimum solution is attained. Therefore the optimum transportation cost is Rs 24,750. ALTERNATE OPTIMUM SOLUTION If any of the cell evaluation is zero, alternate optimum solution exists. Cell evaluation for the box U3-V4 is zero, alternate optimum solution exists. To find alternate optimum solution = min (25,50) = 25 90- (70) 20 50 75 0- (-30) 30 70 25 0- (-10) 10 90 75 100 100 130 (80) 50 0 (0) 0 V3=100 100 25 85-(80) 5 0 25 V4=100 U2=-20 U3=-100 Vj ui U1=0 -

V1= 70 V2=90 Reduction in cost is O*25 = 0 Therefore the transportation cost is Rs 24,750

Question 25. A company has four manufacturing plants and five warehouses. Each plant manufactures the same product, which is sold at different prices at each warehouse area. The cost of manufacturing and cost of raw materials are different in each plant due to various factors. The capacities of the plant are also different. The data is given in the following table: Manufacturing cost in Rs./unit Raw material cost in Rs./unit Capacity per unit time Plant 1 90 50 100 Plant 2 90 70 200 Plant 3 100 130 120 Plant 4 100 85 80

The company has 5 warehouses. The sales prices, transportation costs and demands are given in the table below: Warehouses Transportation costs in Rs./unit 1 2 3 A B C D E (i) (ii) (iii) 4 8 2 10 2 7 9 7 7 5 4 7 6 5 8 4 3 8 10 8 9 Sales price in Rs./unit 30 32 28 34 30 Demand 80 120 150 70 90

Formulate this into a transportation problem to maximize profit Find the solution using VAM method Test for optimality and find the optimal solution

SOLUTION
The total cost matrix derived is a follows: A I II III IV Demand 144 167 234 188 80 B 148 169 237 193 120 C 142 167 236 195 150 D 150 167 235 193 70 E 142 165 238 194 90 Supply 100 200 120 80 510/500

Therefore, the profit matrix derived is equal to SP Cost The Profit Matrix is as follows: A I II III IV Demand -114 -137 -204 -158 80 B -116 -137 -205 -161 120 C -114 -139 -208 -167 150 D -116 -133 -201 -159 70 E -112 -135 -208 -164 90 Supply 100 200 120 80 510/500

The above is an unbalanced, maximization type of problem. A I II III IV Dummy (D1) Demand 80 120 150 70 90 510 -114 -137 -204 -158 0 B -116 -137 -205 -161 0 C -114 -139 -208 -167 0 D -116 -133 -201 -159 0 E -112 -135 -208 -164 0 Supply 100 200 120 80 10

A I II III IV Dummy (D1) Demand 80 94 71 4 50 208

B 92 71 3 47 208

Regret Matrix C 94 69 0 41 208

D 92 75 7 49 208

E 96 73 0 44 208

Supply 100 200 120 80 10

120

150

70

90

510

Thus, the matrix is now balanced and a minimization type of problem.

VAM A I II III IV Dummy (D1) Demand Penalty 80 120 150 70 90 510 94 71 4 50 208 B 92 71 3 47 208 C 94 69 0 41 208 D 92 75 7 49 208 E 96 73 0 44 208 Supply 100 200 120 80 10 Penalty 0/0/0/0/0 0/2/2/12/4/X 0/0/X 3/3/6/X 0/0/0/0/0

46/X 44/44/24/24/21/X 41/41/28/28/28/X 42/42/26/26/17/X 44/44/29/X

RIM Conditions are Fulfilled: 9 = 10 1 = order of the matrix

Initial Basic Feasibility Solution for Regret Matrix: Cell Number IB II B II C II D III A III E IV C IV E D1 - B Total Regret = Rs. 29270 92 * 100 71 * 10 69 * 120 75 * 70 4 * 80 0 * 40 41 * 30 44 * 50 208 * 10 Total 9200 710 8280 5250 320 0 1230 2200 2080

Checking for optimum regret: VA = 97 UI = 0 94 (-97) = -3 UII = -21 71 (-76) = -5 UIII = -93 4 80 UIV = -49 50 (-48) = 2 UD1 = 116 208 (- 213) = -5 VB = 92 92 40 71 80 3 (- -1) = 4 47 (-43) = 4 208 (-208) = 0 VC = 90 94 (-90) = 4 69 120 0 (- -3) = 3 41 30 208 ( - 206) = 2 VD = 92 92 60 75 (-75) = 0 7 (-3) = 4 49 (- 47) = 2 208 10 VE = 93 96 (- 93) = 3 73 (- 72) = 1 0 40 44 50 208 (-209) = -1

Since UI VA, UII VA, UD1 VE, UD1 VA all have a negative CE, the solution is not optimal.

= minimum (50, 120, 80) = 50 Reduction in Regret = 29270 (50 * 5) = Rs. 29020

Checking for optimum regret: VA = 97 UI = 0 94 (-97) = -3 UII = -21 71 50 UIII = -93 4 30 UIV = -49 50 (-48) = 2 UD1 = -115 208 (- -18) = 226 VB = 92 92 40 71 80 3 (- -1) = 4 47 (-43) = 4 208 (- -23) = 231 VC = 90 94 (-90) = 4 69 70 0 (- -3) = 3 41 80 208 (- -25) = 233 VD = 92 92 60 75 (-71) = 4 7 (- -1) = 8 49 (- 43) = 6 208 10 VE = 93 96 (- 93) = 3 73 (- 72) = 1 0 90 44 (- 44) = 0 208 (- -22) = 230

Since CE of UI VA is < 0, the solution is not optimum. = minimum (40, 50) = 40 Reduction in regret = 29020 (40*3) = Rs. 28900

Checking for optimum regret: VA = 94 UI = 0 94 40 UII = -23 71 10 UIII = -90 4 30 UIV = -51 50 (-43) = 7 UD1 = 116 208 (- 210) = -2 VB = 94 92 (- 94) = -2 71 120 3 (- 4) = -1 47 (-43) = 4 208 (- 210) = -2 VC = 92 94 (-92) = 2 69 70 0 (- 2) = -2 41 80 208 (- 208) = 0 VD = 92 92 60 75 (-69) = 6 7 (- 2) = 5 49 (- 41) = 8 208 10 VE = 90 96 (- 90) = 6 73 (- 67) = 5 0 90 44 (- 39) = 5 208 (- 206) = 2

Since all CE are not > or equal to 0, therefore, optimum solution is not obtained = minimum (40, 10) = 10 Reduction in regret = 28900 (10 * 2) = 28880

Checking for optimum regret: VA = 94 UI = 0 94 30 UII = -23 71 10 UIII = -90 4 30 UIV = -51 50 (-43) = 7 UD1 = 114 208 10 VB = 94 92 (- 94) = -2 71 120 3 (- 4) = -1 47 (-43) = 4 208 (- 208) = 0 VC = 92 94 (-92) = 2 69 70 0 (- 2) = -2 41 80 208 (- 206) = 2 VD = 92 92 70 75 (-69) = 6 7 (- 2) = 5 49 (- 41) = 8 208 (-206) = 2 VE = 90 96 (- 90) = 6 73 (- 67) = 5 0 90 44 (- 39) = 5 208 (- 204) = 4

Since all CE are not > or equal to 0, therefore, optimum solution is not obtained = minimum (30, 70) = 30 Reduction in regret = 28800 (30 * 2) = 28820

Checking for optimum regret: VA = 94 UI = 0 94 30 UII = -23 71 40 UIII = -92 4 (-2) = 2 UIV = -51 50 (-43) = 7 UD1 = 114 208 10 VB = 94 92 (- 94) = -2 71 120 3 (- 2) = 1 47 (-43) = 4 208 (- 208) = 0 VC = 92 94 (-92) = 2 69 40 0 30 41 80 208 (- 206) = 2 VD = 92 92 70 75 (-69) = 6 7 (- 0) = 7 49 (- 41) = 8 208 (-206) = 2 VE = 92 96 (- 92) = 4 73 (- 69) = 4 0 90 44 (- 41) = 3 208 (- 206) = 2

Since all CE are not > or equal to 0, therefore, optimum solution is not obtained = minimum (30, 120) = 30 Reduction in regret = 28820 (30 * 2) = 28760

Checking for optimum regret: VA = 92 UI = 0 94 (-92) = 2 UII = -21 71 70 UIII = -90 4 (- 2) = 2 UIV = -49 50 (-43) = 7 UD1 = 116 208 10 VB = 92 92 30 71 120 3 (- 2) = 1 47 (-43) = 4 208 (- 208) = 0 VC = 90 94 (-90) = 4 69 40 0 30 41 80 208 (- 206) = 2 VD = 92 92 70 75 (-71) = 4 7 (- 2) = 5 49 (- 43) = 6 208 (-208) = 0 VE = 90 96 (- 90) = 6 73 (- 69) = 4 0 90 44 (- 41) = 3 208 (- 206) = 2

All CE are > or equal to 0, therefore optimum regret is achieved. Regret solution = Rs. 28760 Therefore, Profit = (maximum profit per unit * total quantity) optimum regret = (-112 * 510) 28760 = -57120 28760 = Rs. 85880 Thus, the firm makes a loss of Rs. 85880.

Question 26. Suppose that England,france and spain produce all the wheat,barley and oats needed in the world. The world demand for wheat requires 125 million acres of land devoted to wheat production. Similarly, 60 milion for Barley and 75 milion acres of land for Oats are required. The total amount of land available for these purpose in England, France and Spain is 70 milion, 110 milion and 80 milion acres respectively. The number of hours needed in England France and Spain to produce an acre of wheat is 18 hrs, 13 hrs and 16 hrs respectively. The number of hours needed for barley are 15, 12 and 12 hrs. The number of hours for oat are 12,10 and 16 hrs respectively. The labour cost for wheat is $3, $2.4 and and $3.3 respectively.Labour cost for barley is $2.7, $3 and $2.8. Labour cost in producing oats is $2.3 , $2.5 & $2.1 respectively. The problem is to allocate land use in each country so as to meet worlds food requirement and minimize the total labour cost 1) Formulate the problem 2) Solve it for optimum cost Ans) Labour Cost in $ (Multiplying By 10) England France Spain Demand Penalty Wheat 540 312 (110) 528 (15) 125 216/12 Barely 405 360 336 (60) 60 24/69 Oats 276 (70) 250 336 (5) 75 29/60 Capacity 70 110 80 Penalty 129/129/x 62/x 0/0/0

Step 1 Balanced Step 2 Minimization Phase 1 276 * 70 + 312 * 110 + 528 * 15 + 336 * 60 + 336 * 5 = Rs 83400 Phase 2 Test for Optimality 1) No. of occupied cells = m+n-1 = 3+3-1 =5 2) All cells are at independent positions

V1=468

V2=276

V3=276

U1=0

540 468 = 72

405 276 = 129

276 (70)

U2=-156

312 (110)

360 120 = 240

250 120 = 130

U3=60

528 (15)

336 (60)

336 (5)

All Cell Evaluations 0, there is optimum solution. Therefore, optimum cost= 83400/10= Rs 8340

Question 27. A wholesale distributor has three houses W1,W2 & W3 whose stocks are distributed to meet the demands of four market region M1,M2,M3 & M4. The weekly supplies available and the require demands and the unit cost of transportation are displayed below Warehouses W1 W2 W3 DEMAND(Uts) 12 20 20 140 6 18 14 240 Market 10 4 16 340 8 14 12 180 Supplies(uts) 440 300 160

Presently the wholesaler is following the schedule of sending supplies from warehouses W1, 240 uts to M2, 20 uts from M3 and 180 uts M4. From W2 all the 300 uts to M3. W3 supplies 20 uts to M3 and 140 uts to M1 1) Compute the total transportation cost of the present schedule 2) Is it possible to get a better schedule that will reduce present total cost?If so, find the best solution and the saving resulting there from. 3) Suppose the transportation cost from W3 to W2 becomes 9 per unit,would this change the optimal solution? If so, derive the new solution and the associated cost. Ans) M1 12 20 20 (140) 140 M2 6 (240) 18 14 240 M3 10 (20) 4 (300) 16 (20) 340 M4 8 (180) 14 12 180 Supply 440 300 160 900

W1 W2 W3 Demand

Phase 1

Calculation of Initial Basic Feasible Solution

IBF Solution= 6*240+10*20+8*180+4*300+20*140+16*20 ` Phase 2 = Rs. 7400 Test for Optimality

1) No. of occupied cells = m+n-1 = 3+4-1 =6 2) All cells are at independent positions

V1=14

V2=6

V3=10

V4=8

U1=0

12 14 = -2

6 (240)

10 (20)

8 (180)

U2=-6

20 8 = 12

18 0 = 18

4 (300)

14 12 = 12

U3=6

20 (140)

14 12 = 2

16 (20)

12 14 = -2

= min {20,180} = 20 Reduction in cost = 7400 -2*20 = 7400-40 = RS 7360

V1=16

V2=6

V3=10

V4=8

U1=0

12 16 = -4

6 (240)

10 (40)

8 (160)

U2=-6

20 10 = 10

18 0 = 18

4 (300)

14 12 = 12

U3=4

20 (140)

14 10 = 4

16 14 = 2

12

(20)

= min {140,160} = 140

Reduction in cost = RS 7360 4*140 = Rs 6800 u v V1=16 V2=6 V3=10 V4=8

U1=0

12 (140)

6 (240)

10 (40)

8 (20)

U2=-6

20 6= 14

18 0 = 18

4 (300)

14 12 = 12

U3=4

20-6=14

14 10 = 4

16 14 = 2

12

(160)

All C.E. 0, optimumsolution is attained Optimum Cost is Rs.6800

3) If the cost of route W2 to M2 is changed to Rs 9 per ut the change in optimum solution would be u v V1=16 V2=6 V3=10 V4=8 U1=0 U2=-6 U3=4 12 (140) 20 6= 14 20-16=4 6 (240) 18 0 = 18 9 10 = -1 10 (40) 4 (300) 16 14 = 2 8 (20) 14 12 = 12 12 (160)

= min {240,160} = 160 Reduction in cost = 6800 -1*160 = Rs. 6640

Question 28. Solve the following problem using transportation algorithm. Use VAM for finding the initial feasible solution. The cell entries in the table are unit costs. FROM O1 O2 O3 O4 O5 DEMAND SOLUTION:
FROM O1 O2 O3 O4 O5 DEMAND I 80 47 16
16

TO I 80 47 16 86 27 16 II 69 100 103 15 20 14 III 103 72 87 57 72 18 IV 64 65 36 19 94 6 V 61 40 94 25 19 10 SUPPLY 12 16 20 8 8

II 69 100 103 156 208 14

III 10312 726 87 57 72 18

TO IV 64 65 364 192 94 6
2

V 61 4010 94 25 19 10
6/6/6/ 6/-/-

SUPPLY 12 16 20 8 8
6

Penalty
3/3/3/8/34/ 34 7/25/25/32/ 28/28 20/51/-/-/-/4/4/4/10/42 /42 1/1/1/1/52//-

86 27 16
11/-/-/-/-/-

Penalty

5/5/5/5/5/54

17/17/45/-/-/-

STEP 1: Balanced STEP 2: Minimisation

PHASE I: Initial Basic Feasible Solution O1-III --- 103 x 12= 1236 O2-III --- 72 x 6= 432 O2-V --- 40 x 10= 400 O3-I --- 16 x 16= 256 O3-IV--- 36 x 4= 144 O4-II --- 15 x 6= 90 O4-IV --- 19 x 2= 38 O5-II --- 20 x 8= 160 Rs. 2756 Thus, total production cost is Rs.2756. PHASE II: Test for Optimality 1. Number of occupied cells =m+n-1 = 5+5-1 =9 It is a degenerate solution since the number of allocations is 8 & not 9. 2. All cells are at independent positions.

V1=56 U1=0 U2=-31 U3=-40 U4=-57 U5=-52

V2=72
69-(72) -3 100 (41) 59 103-(32) 71

V3=103
103

V4=76 64-(76)

V5=71
61-(71)

12 72 65 (45) 6 36 4 24 57 (-46) 11 72-(51) 94-(24) 21 19 2

-12 40 20 94-(31) 10

-10

+
87-(63)

63

86-(-1) 87 27-(4) 23

15 6 20 8

25-(14) 11 19 70 E

=Minimum{12,10,2,8} =2 Reduction in cost=2756-12x2 =Rs.2732

V1=44 U1=0 U2=-31 U3=-28 U4=-57 U5=-52

V2=72
69-(72) -3 100 (41) 59 103-(44) 59

V3=103
103

V4=64 64 2 65 (33)

V5=71
61-(71)

10 72

+
40 32 8 94-(43)

-10

+
87-(75)

8 36 4 12

51 19 (7) 25-(14) 12 94-(12) 19 82 2 11

86-(-13) 99 27-(-8) 35

15 8 20 6

57 (-46) 11 72-(51) 21

=Minimum{10,8} =8 Reduction in cost=2732-10x8 =Rs.2652 V1=44 U1=0 U2=-31 U3=-28 U4=-47 U5=-42
80-(44) 36 47-(13) 34 16 16 69 86-(-3) 89 27-(2) 25 20 6 15 8 72-(61) 11 57 (-56) 1 94-(22) 72 12 19 (17) 2 19 2 25-(14) 11 103-(34) 100 (31) 69 87-(75)

V2=62
69-(62) 7

V3=103
103 2 72 16

V4=64
64 2 65 (33) 32 36 4

V5=61
61 8 40-(30) 10 94-(33) 61

All cell evaluations are greater than or equal to 0 Therefore, there is optimum solution. Optimum cost =Rs.2652

Question 29. ABC Manufacturing company wishes to develop a monthly production schedule for the next three months. Depending upon the sales commitments, the company can either keep the production constant, allowing fluctuations in inventory, or inventories can be maintained at a constant level, with fluctuating production. Fluctuating production necessitates in working overtime, the cost of which is estimated to be double the normal production cost of Rs. 12per unit. Fluctuating inventories result in inventory carrying cost of Rs. 2 per unit if the company fails to fulfill its sales commitment, it incurs a shortage cost of Rs.4 per month. The production capacities for nest three months are shown below:

MONTH 1 2 3

PRODUCTION CAPACITY REGULAR OVERTIME 50 30 50 0 60 50

SALES 60 120 40

Determine the optimal production schedule. SOLUTION

FROM Production R1 R2 R3 O1 O3 Demand

1 12 16 20 24 32 60

2 14 12 16 26 28 120

3 16 14 12 28 24 40

TO SALES Dummy 0 0 0 0 0 20

Supply 50 50 60 30 50 240

FROM Production R1 R2 R3 O1 O3 Demand Penalty

1 12 50 16 20 24 10 32 60 4/4/4/4/4/8

TO SALES 2 3 14 16 12 50 14 16 20 12 40 26 20 28 28 30 24 120 40 2/2/4/10/10/2 2/2/2/12

Dummy 0 0 0 0 0 20 20 0

Supply 50 50 60 30 50 240

Penalty 12/2/12/2/12/4/4/4/4 24/2/2/2/2/2 24/4/4/4/4

STEP 1 Balanced STEP 2 Minimisation

PHASE 1 Initial Basic Feasible Solution

Production Schedule 12*50 - 600 12*50 - 600 16*20 - 320 12*40 - 480 24*10 - 240 26*20 - 520 28*30 - 840 0*20 - 0 Total 3600 PHASE 2 Test for optimality No. of occupied cells = m + n 1 =5+41 =8 All cells are at independent positions U1=0 U2= -2 U3= 12 U4= 12 U5= 14
12

V1=12
50

V2=14
14-(14)

+ 0

V3=10
16-(10) 6 14-(8)

V4= -14
0-(-14) 14 0 (-16) 6 16

16-(10) 6 20-(14) 6 24 10 32-(26) 16 +

12 50 16 20 26 20 28 30 -

12 40 28 (-22) 6 24-(24) 0

0-(-12) 12 0-(-2) 2 0 20

If any of the cell evaluation is 0 alternate optimum solution exists. To find alternate optimum solution = min (50,20) = 20

Reduction in cost = 3600 (20*0) 3600 U1=0 U2= -2 U3= 2 U4= 12 U5= 20
12

V1=12
30

V2=14
14 20 12 50 6

V3=10
16-(10) 6 14-(8) 6

V4= -20
0 20 0 22

16-(10)

20-(14) 6 24 30 32 0

16

+ 20

12 40 28 (-22)

0 18 0 6 8 0

26

28 30

24 + -8

20

= min (30,40) = 30 Reduction in cost = 3600 (8*30) 3360 V1=12 12 U1=0

V2=14
14 20 12 50

V3=10
6 6 14-(8) 6

V4= -14
0 14 0 16

U2= -2 U3= 2 U4= 12 U5= 14

16-(10) 6 20-(14) 6 24 30 32 6

16 50 26

12 10 28 (-22) 6 24 30

0 12 0 2 0 20

28

= min (20,30) = 20 Reduction in cost = 3360 (0*20) 3360

Question 30. A company has three factories that supply to four marketing areas. The transportation cost of shipping from each factory to different marketing areas is given below. The availability at each factory and requirements at different markets is also given.
Table 4.16 Factory M1 F1 F2 F3 Demand
19 70 40

Marketing area M2
30 30 8

Supply M4
10 40 20

M3
50 40 70

1600 1200 1700 4500

1000

1500

800

1200

Find initial feasible solution using VAM Is the solution obtained optimum? If the solution is not optimal carry out improvements for optimality using MODI method. Solution The given transportation problem is of minimization type and is a balanced one. Phase 1: To get initial basic feasible solution using VAM method.

Factory M1 F1 F2 F3 Demand
Penalty
19 30

Marketing area M2 M3
50 40 10

Supply M4 1600
600

Penalty
9/9/40/40 10/10/0/0 12/20/50/

1000
70 40 30 8 40

1200
400

800
70 20

1700
200

1500

1000
21/21

1500
22

800
10/10/10/10

1200
10/10/10/30

4500

Total transportation cost: Units 1000 1500 800 600 400 200 Cost per unit 19 8 40 10 40 20 Total 19000 12000 32000 6000 16000 4000

Total transportation cost: Rs 89000 Rim condition: No. of allocations = 6 m+n-1 = 3 + 4 1 = 6 Since, no of allocations = m + n 1, hence can solve by MODI method. Phase 2: MODI method

Factory M1 F1 F2 F3
19 30

Marketing area M2 M3
50 32 30 21 2 8 11 70 40 40 40 10

Supply M4 1600
600

ui
0 30 10

1000
70

1200
400

800
20 50

40

1700
200

1500

Demand vj

1000
19

1500
-2

800
10

1200
10

4500

1. ui + vj = cost of allocated cells. 2. Cell evaluation: CE = Cost (u + v), for all non allocated cells. E.g. for F2 M1 cell evaluation: 70 (30+19) = 21. Since all cell evaluations are positive, the solution obtained is an optimum solution. Therefore, optimum transportation cost = Rs 89000.

Question 31. There are three canning factories around a state which need baskets of strawberries. Three orchards supply these to the factories. Their costs for supplying these baskets are as follows:
Table 4.18 Orchard A B C Price in Rs (per basket) 19 20 21 Annual capacity 300 700 1350

The cost of transportation (per basket in Rs) from each orchard to each factory is given below:
Table 4.19 Factory X Y 2 5 3 4 3 2

To From A B C

Z 1 6 7

The annual requirements of three factories is 300, 600, 1200 baskets respectively. How many baskets should be purchased from each orchard by each factory to minimize the total cost? Solution: The above problem is of minimization type. However, the problem is unbalanced since supply is greater than demand. We take care of this imbalance by introducing a 4th dummy factory having a requirement of 250 baskets. Phase 1: to get initial basic feasible solution
Orchard X A B C Demand
Penalty
21 25 24 23 23 23

Factory Y
20

Supply Z
300

Penalty
20/1/ 23/2/2 23/1/1/1

Dummy
0 0

300 700 1350

26

700
28 0

300

600

200

300
3/3/1

600
0/0/0

1200
6/6/2

250
0/

2350

Total transportation cost: Units 300 600 300 700 200 250 Cost per unit 24 23 20 26 28 0 Total 7200 13800 6000 18200 5600 0

Total transportation cost: Rs 50800 Rim condition: No. of allocations = 6 m+n-1 = 3 + 4 1 = 6 Since, no of allocations = m + n 1, hence can solve by MODI method. Phase 2: MODI method
Orchard X A B C
21 5 25 3 24 23 23 2 28 23 8 26

Factory Y
20

Supply Z
0

ui
0 6 8

Dummy 300
8 0

300 700
0

700
2

1350
250

300

600

200

Demand vj

300
16

600
15

1200
20

250
-8

2350

1. ui + vj = cost of allocated cells. 2. Cell evaluation: CE = Cost (u + v), for all non allocated cells. Since all cell evaluations are positive, the solution obtained is an optimum solution. Therefore, optimum transportation cost = Rs 50800

Question 32 A city bus service has two bus depots where the buses are parked at night. Early morning the buses have to reach to three different starting points. The distance in km between the depot and the starting points is given below. Find the optimum routing of buses from depot to the starting point so as to minimize the total distance traveled by empty buses. Bus Depot X Y Requirements Solution: The given transportation problem is of minimization type which is a balanced one as Total Requirement is equal to Total Availability. Phase I: To get Initial Basic Feasible Solution (IBF) using Vogles Approximation Method/ Penalty Method. Bus Depot X Y A 2 3 B (15) 8 7 8 1 1 C (8) 4 3 12 35 Penalty 1 1 1 Availability (2) 25 (10) 10 35 Penalty 2/4/4 0/4/A 2 3 15 STARTING POINTS B C 8 4 7 3 8 12 Availability 25 10 35

Requirement 15

IBF Solution = (15*2) + (8*8) + (4*2) + (3*10) = 132 kms. Phase II: Test for Optimality 1. No. of cells = m+n-1 = 4 2. All cells are at independent positions.

The above conditions are fulfilled. Therefore, we solve and find the optimum solution using Modified Distribution (MODI) Method or UV Method.

V U U1 = 0 2

V1=2 (15) 8

V2=8 (8) 4

V3=4 (2)

-
U2 = -1 3-(1) 2 7-(7) 3

+
(10)

+ 0

=8 Reduction in Cost = 132 (0*8) = 132 0 = 132 kms. Ans. The total minimum and optimum distance traveled by the buses is 132 kms.

Question 33 A cigarette mfg company has factories in 3 different cities. Hyderabad, Bangalore and belgaum. It sells its product in 3 differesnt markets.the cost ofd raw materials, labour & transportation are different and the prices at which the packets are sold in different markets is also not uniform. The profits therefore vary form palce of manufacture and markets. They are as follows. (profits are in Rs. 10 per packet )
markets M2 28 27 37 3000

Hyderabad Bangalore Belgaum

M1 29 25 35 1500

M3 30 23 38 1500

Availability 2000 2000 2000

Formulate the problem and find initial feasible solution using VAM. SOLUTION The given problem is a maximization type. We convert it into minimization type by forming a regret matrix. REGRET MATRIX
M1 9 13 3 1500 markets M2 10 11 1 3000 M3 8 15 0 1500 Availability 2000 2000 2000 6000

Hyderabad Bangalore Belgaum Demand

Now, the sum is of minimization tyoe and Is balanced, thus we can solve it by VAM Initial feasible solution
M1 Hyderabad Bangalore Belgaum Demand 9 500 13 1000 3 0 6 6 6 markets M2 10 11 1000 1 2000 0 9 1 1 1 M3 8 1500 15 0 0 8 8 Availability 0 0 0 Penalty 1 1 1 2 1 2 2 2 -

Penalty

TOTAL REGRET COST (9*500) + (8*1500) + (13*1000) + (11*1000) + (1*2000) = 42500 RIM CONDITION CHECK Number of allocations = 5 Degree of matrix = M+N-1 = 5 Since, number of allocations = degree of matrix Feasible solution is attained
FROM Hyderabad Hyderabad Bangalore Bangalore Belgaum Total TO M1 M3 M1 M1 M2 QUANTITY 500 1500 1000 1000 2000 PROFIT 29 30 25 27 37 TOTAL PROFIT 14500 45000 25000 27000 74000 185500

THUS, total maximum profit = 185000

Question 34. Given below is a transportation problem with transportation cost and initial feasible solution. Destination origin O1 O2 D1 5 6 D2 10 D3 4 D4 5 2 Supply 100 250 200 550

100
8 2 7

200
O3 4 5

50
7 50

50
Demand 250 100 State with reason, whether: (1) (2) (3) (4)

100
150

50

The given feasible solution is degenerate. The solution is optimal. Can there be more than one optimal solution in this problem. How will you test the optimality of the solution when one of the cell cost change?

Solution (1) The number of occupied cells is 6 And m + n -1 = 4 + 3 1 = 6 Since number of occupied cells = m + n 1 = 6, the rim requirements are satisfied. Therefore, the solution obtained is a non-degenerate solution. (2) To check whether the solution is optimal solution or not, the modi method is adopted. Modi method destination origin O1 2 O2 6 D1 5 9 8 5 4 2 0 5 D2 10 D3 4 D4 5 6 7 2 250 200 3 1 Supply 100 Ui 0

100

200
O3

50
7 0

50

100

50

Demand Vj

250 3

100 1

150 4

50 -1

550

Optimality test Since all the cell evaluations are positive/ non- negative optimum solution is obtained. (3) yes, there can be more than one optimal solution in the above case as the cell evaluations for the cells 02 d3 and o3 d4 is 0 each. Therefore, alternate optimum solutions exits. Now the total transportation cost = 100*4 + 200*6 + 50*2 + 50*4 + 100*2 + 50*5 = 2350 Alternate optimum solution 1 Destination origin O1 2 O2 O3 6 5 4 2 D1 5 9 8 0 5 D2 10 D3 4 D4 5 6 2 250 200 550 3 1 Supply 100 Ui 0

100
+ 7

200 + 50
Demand Vj 250 3

50
7 0 50 -1

100
100 1

50 150 4

= min (50,200) = 50 Therefore reduction in cost = 50*0 = 0 Therefore new cost = 2350 0 = 235

Alternate optimum solution 2 Destination Origin O1 2 O2 O3 + 6 5 4 2 D1 5 9 8 0 5 D2 10 D3 4 D4 5 6 7 2 7 0 + 50 -1 550 250 200 3 1 Supply 100 Ui 0

100

200 - 50
Demand Vj 250 3

50 50
150 4

100
100 1

= min (50, 50) = 50 Therefore reduction in cost = 50*0 = 0 Therefore new cost = 2350 0 = 2350 (4) When one of the cell costs change, there are two possibilities to be considered i.e. A) the change of cost is for occupied cell Or b) The change of cost is for an unoccupied cell In the first case we have to compute the initial basic feasible solution by the vam method and calculate new ui and vj and cell evaluations to check the optimality of the solution. In the second case we just have to calculate new cell evaluation for the changed cell and find out whether the solution is optimal.

Question 35. Mr. Pinto is the production supervisor at chips and chips electronics company in Mumbai. On arriving at work on one fine morning hr finds the foloowing pallet information

Dept A B C

Pallets available 28 27 21

Dept G H I J

Pallets reqd. 14 12 23 17

The time to move a pallet from 1 dept to another is as follows From A G To 13 min A H 25 B G 18 B H 23 B I 14 B J 9 A I 12 A J 21 C G 23 C H 15 C I 12 C J 13

Find the distribution plan using it as a transportation problem so as to minimize the total time required for distribution plan SOLUTION The Matrix showing time required for distribution from each source to each destination along with demand and supply for pallets is as follows
To From A B C G 13 18 23 14 H 25 23 15 12 I 12 14 12 23 J 21 9 13 17 Supply 18 27 21 66

Demand

The above problem is of minimization type and a balanced one. Hence, solving it with VAM method

To From A B C

G 13 14 18 23

H 25 23 15 12 12

I 12 4 14 10 12 9 23 0/0/0/2

J 21

Supply

Penalty 1/1/1/1 18 5/5/4/4

9 17 13 21 17 4/4/ 66 27

1/1/11/

Demand
Penalty

14 5/5/5/10 8/

Total Transportation Time required is 14*13 + 15*12 + 12*4 + 14*10 + 12*9 + 17*9 =811 minutes = 13.51 hrs = 13hrs 30 min RIM condition check M+n-1 = 6 = number of allocations Therefore, by Modi Method
To From A B C G 13 14 18 3 23 10 14 13 15 12 12 15 23 6 12 9 23 12 H 25 10 14 10 13 6 17 7 21 66 0 I 12 4 9 17 27 2 J 21 14 18 0 Supply ui

Demand
vj

Since, all cell valuations are non negetive the solution so obtained is the optimum feasible solution. Answer: The distribution plan should be as follows A to G, A to I, B to I, C to H, C to I, B to I.

Question 36. YOURS OWN garment manufacturing firm of Mumbai wishes to develop a monthly production schedule for the next three months. Depending on sales commitments, the company can either keep the production constant, and allowing the fluctuations in inventory or maintained inventories at a constant level, with fluctuating production. The fluctuating production necessitates, working overtime, the cost of which is estimated to be double the normal production cost of Rs. 10 per unit. Fluctuating inventories result in inventory carrying cost of Rs. 4 per unit. If the company fails to fulfill its sales commitment, it incurs a shortage cost of Rs. 5 per unit per month. The production capacities for the next three months are shown in the following table: Production Capacity Regular Overtime Sales 1 50 30 60 Months 2 50 00 120 3 60 50 40

Formulate it as a Transportation Problem to obtain an optional production schedule. Solution: The following Transportation problem is an unbalanced problem and of minimization type. We therefore formulate the COST MATRIX by adding a dummy column D. Production Months R1 O1 R2 O2 R3 O3 Demand 1 10 20 M M M M 60 Months 2 14 24 10 20 M M 120 3 18 28 15 25 10 20 40 Dummy 4 0 0 0 0 0 0 20 Suppy 50 30 50 00 60 50 240

Explanation: We add inventory carrying cost to production cost in the succeeding months (i.e. R1:10, 10+4, 10+4+4 and O1:20, 20+4, 20+4+4). In addition to this there is shortage cost that occurs in month 2, because production in months 1 & 2 together fall short of commitment of sales in month 2 if the commitment of sales in month 1 is carried out. This shortage cost is Rs. 5 per unit per month which is added to the cost in the month 3 (i.e. R2-3 and O2-3). Finally, production in a given month cannot be used in the preceding month; therefore we get a cost infinity which is denoted by M for the earlier months.

Question 37. Find the initial feasible solution for the following transportation using VAM . ORIGIN O1 O2 O3 DEMAND SOLUTION ORIGIN O1 O2 O3 DD PENALTY DESTINATION D1 D2 D3 D4 2 11 10 3 4 1 4 7 2 2 3 3 9 1 4 4 8 1 3 3 4 5 1 5 3 1 1 5 3 1 1 2 6 5 1 2 5 3 9 8 PENALTY D5 7 1 6 12 6 6 SUPPLY 4 8 9 21 1 1 1 1 1 1 1 1 1 5 5 D1 2 1 3 3 DESTINATION D2 D3 11 10 4 7 9 4 3 4 D4 3 2 8 5 D5 7 1 12 6 SUPPLY 4 8 9 21

STEP 1): Balanced 2):Minimisation PHASE 1:Initial Basic Feasible Solution = 3*4 + 1*6 + 4*2 + 3*3 + 9*1+ 4*4+ 8*1 =12+6+8+9+9+16+8 =Rs 68 Initial Basic Feasible Solution is Rs 68

Question 38. There are 4 bus depots where the buses and parked for night. These empty buses should reach the starting points early in the morning to start the bus service on various routes. The cost of per unit transportation for empty buses from the depots to starting points is given below. Find the optimum movement of empty buses from the depots to starting point so as to minimize the total transportation cost.

Bus Depot A B C D Demand

1 10 12 14 12 20

2 12 13 12 11 40

3 11 12 15 17 30

Starting Point 4 14 11 19 13 10 SOLUTION Starting Point 4 5

5 15 14 16 14 50

6 12 13 12 16 25

Supply 30 50 75 20 175

Bus Depot A B C D Demand Penalty

1 10 12 14 13 20 2/-/-//20

2 12 13 12 11 40 20 1/1/0/0/1 /1

3 11 12 15 17

6 12 13 12 16 25 0/0/0/ 0/1/1

Supply Penalty 30 10 50 40 20
25

14 11 19 13 10

15 14 16 14 50 30

1/1/1/1/ 1/1/1/1/ 1/0 0/0/0/0/ 0/0 2/2/-/-/-

20

10

20

20

30

75 55 25 20 175

20

30 20

1/1/1/1/3 2/2/3/- 0/0/1/ /1/2/2

STEP 1 Balanced STEP 2 Minimisation

PHASE 1 Initial Basic Feasible Solution 20*10 + 10*11 + 20*12 +10*11+20*14 + 20*12 + 30*16 + 25*12 + 20*11 =Rs.2180/-

PHASE 2 Test for optimality No. of occupied cells = m + n 1 = 6+4-1 =9 All cells are at independent positions U/V U1=0 U2= 1 U3= 3 U4= 2 V1=10
10 20 12 -(11) 1 14 -(13) 1 13 (12) 1 12 + 11 20 20 17 -(13)) 4 13 (10) 3

V2=9
12 -(9) 3

V3=11
11 10

V4= 10
14 (10) 4

V5= 13 15 (13)
2 14

V6= 9 12 (9)
3 13 (10)

12 20 15 (14) 1

11 10 19 (13) 6 13 (12) 1 1

20 16 30 14 (15) + -1 16 -(11) 12 25

= 20 Therefore Reduction In cost = 20 Therefore the new cost = 2180 20 Therefore New Cost =Rs.2160

U/V U1=0 U2= 1 U3= 3 U4= 1

V1=10
10 20 12 (11) 1 12 (13) 1 13 (11) 1

V2=9
12 (9)

V3=11
11 10

V4= 10
14 (10) 4 11

V5= 13 15 (13)
2 14

V6= 9 12 (9)
3 13 (10)

13 (10)

3
3

12 20 15 (14)

10 19 (13) 6 1 16

20 12 10 14 2 20 16 (10) 25

12 40 11 (10)

17 (12) 5

13 (11)

All Cell Evaluations are greater than or equal to 0 Hence there is optimum solution. The Optimum Cost is Rs.2160/-.

Question 39. Find the optimal solution to the following transportation problem. The figures give the transportation cost per unit of the product from origin to destination Destination Origin O1 O2 O3 Demand 1 13 2 12 22 2 17 7 18 35 3 6 10 2 25 4 8 41 22 41 Supply 30 40 53 123

Use VAM and MODI method.

Solution :
The given transportation problem is of minimization type and is a balanced one. PHASE I Initial Basic Feasible Solution VAM Method
Origin D1 1 2 3 Demand (bj) Penalty
13 2 17 7

Destination D3 D2
6 10 8 30 41 22 25

Supply (ai) D4 30 40 53 11 41
14/19/-/-

Penalty
2/5/5/5/8 10/10/10/10

5
12 18

35
2

17 22
10/10/10/10

35
10/4/4/-

25
4/8/8/8

123

Basic Feasibility Solution: O1-D4 = 30*8 = 240 O2-D1 = 2*5 = 10 O2-D2 = 7*35 = 245 O3-D1 = 12*17 = 204 O3-D3 = 25*2 = 50 O3-D4 = 22*11 = 242 991 Number of occupied cells = m+n-1 , i.e. 3+4-1 = 6 Therefore, all cells are at independent position.

Phase 2: MODI method

Origin 1 O1 O2
13 17

Destination 2 3
6 8 18 10 41 18

Supply 4 30
30

ui
0

15
7 2

14

13
29

5 12

35

O3
17

18 1

2 25

22 11

14

Demand vj

22
-2

35
3

25
-12

41
8

113

3. ui + vj = cost of allocated cells. 4. Cell evaluation: CE = Cost (u + v), for all non allocated cells. Since all cell evaluations are non-negative, the solution obtained is an optimum solution. Therefore, optimum solution is Rs. 991/-

Question 40. Find the optimum feasible solution to the following degenerate transportation problem. Retail outlets Distribution center 1 2 3 Demand 1 10 1 7 3 2 7 6 4 2 3 3 8 5 6 4 6 3 3 4 Supply 3 5 7 15

The figures show the per unit transportation cost of the product from the distribution center to different retail outlets. Solution The given transportation problem is of minimization type and is a balanced one. Phase 1: To get initial basic feasible solution using northwest corner rule.
Distribution center 1 1
10 7 6 2 7 4 3 5

Retail outlets 3
3 3 2 8 2

Supply 4 3
6

2 3

3 1

5
3

7
3

Demand

15

Total transportation cost: Units Cost per unit 3 3 3 1 2 3 2 4 3 5 2 3 Total transportation cost: Rs.47/-

Total 9 3 6 8 15 6

Rim condition: 1. No. of allocations = 6 m+n-1 = 3 + 4 1 = 6 2. All cells are at independent conditions Phase 2: MODI method

Origin 1 1
10 11 7

Retail outlets 2 3
3 5 6 3 2 4 1 2 5 3 8 3 3 3 3 6

Supply 4 3
5

ui

5
2

7
2

Demand vj

3
-1

2
2

6
3

4
1

15

5. ui + vj = cost of allocated cells. 6. Cell evaluation: CE = Cost (u + v), for all non allocated cells. Since all cell evaluations are non-negative, no decrease in cost can be obtained Therefore, optimum transportation cost = Rs.47/-

Question 41. The following data gives transportation cost per unit of product from origin to destination as well as the supply and demand of the product at each end. Destination Origin O1 O2 Demand i) ii) Solution The given transportation problem is of minimization type and is a balanced one. Phase 1: To get initial basic feasible solution using northwest corner rule.
Origin 1 O1 O2 Demand
7 1

1 7 8 9

2 1 9 6

3 35 4 7

4 20 21 6

Supply 15 13 28

Obtain initial feasible solution. You may use northwest corner rule. Test this solution for optimality using MODI method.

2
6
9

Destination 3
35 4 20 21

Supply 4 15 13
6

9
8

28

Total transportation cost: Cost per unit Units 9 7 6 1 7 4 6 21 Total transportation cost: Rs.223/Rim condition:

Total 63 6 28 126

No. of allocations = 4 m+n-1 = 2 + 4 1 = 5 Since, no of allocations is not equal to m + n 1, the rim condition is not satisfied. Therefore DEGENERACY occurs. To remove this degeneracy we introduce Epsilon

(E) so that the number of allocations = m+n-1. The position of E is chosen in such a way that it is the least cost and it does not form a closed loop. Phase 2: MODI method

Origin 1 O1 O2
7 1

Destination 2 3
35 20 32 4 7 21

Supply 4 15
0

ui
0

9
8 9

13
6

Demand vj

9
7

6
1

7
3

6
20

28

7. ui + vj = cost of allocated cells. 8. Cell evaluation: CE = Cost (u + v), for all non allocated cells. E.g. for O2 2 cell evaluation: 9 (1+1) = 7. Since all cell evaluations are non-negative, the solution obtained is an optimum solution. Therefore, optimum transportation cost = Rs.223/-

Question 42. Three plants produce identical spare parts to be used in further industrial production in plants 1, 2 and 3. The production in these plants is 100, 50, 50 units respectively. The demand for these in three industries A, B, C is 50, 80, 70 units respectively. The transportation costs in Rs. per unit are as follows: From 1 to A = 100 1 to B = 25 1 to C = 150 From 2 to A = 150 2 to B = 100 2 to C = 175

3 to A = 125 3 to B = 60 3 to C = 130

Find how many parts should be sent from each plant to respective industry so as to minimize the total cost of transport? Solution: A 100 150 125 50 B 25 100 60 80 C 150 175 130 70 SUPPLY 100 50 50 200/200

1 2 3 DEMAND

The given transportation problem is a minimization type which is a balanced one. ( as total supply = total demand = 200 PHASE I Initial Basic Feasible Solution VAM Method

Plant A 1 2 3 Demand (bj) Penalty

Industries B
25 150

Supply (ai) C 100 50 20 50 50 70

Penalty
75/50 50/25/25/25 65/5/5

20
150 100

80
175 130

30
125 60

50
25/25/25

80
35

200

Total transportation Cost = (20*100) + (80*25) + (30*150) + (175*20) + (130*50) = 2000 + 2000 + 4500 + 3500 + 6500 = Rs. 18500/RIM condition m+n-1 3 + 3 1 = 5 (equal to no. of allocations) Hence MODI method can be used. PHASE II MODI method
Plant A 1 2 3 Demand (bj) vj
100

Industries B
25 150

Supply (ai) C 100

ui
0 50 5

20
150 100

80
25 60 20 130

50 20 50 50 70
125

30
125

30

50
100

80
25

200

1) 2)

u + v = cost for all ALLOCATION CELLS Cell Evaluation

CE = Cost (u + v) for all NON-ALLOCATION CELLS Since the cell evaluations are positive (non-negative), optimum solution is attained. Optimum Transportation Cost = Rs. 18500/-

Question 43. A manufacturer has 5 production units and five wholesale depots. The demand at these depots is as follows: W1 W2 W3 W4 W5 80 60 20 210 80 The production units have the following production capacity. P1 P2 150 30 P3 P4 120 130

The transportation cost per unit of product in Rs. from the production units to the depot is as follows: P1 P2 P3 P4 W1 7 3 8 3 W2 10 16 4 W3 8 10 5 0 W4 8 9 1 W5 4 0 18 6

The blank indicates non availability of that route. Find the optimum allocation of units from producing point to wholesale depot. SOLUTION From To Wholesale Depots Production W1 W2 W3 W4 W5 Supply Penalty P1 7 30 10 8 8 70 4 50 150 3/3/3/3/3/3 P2 3 16 10 9 0 30 30 3/3/3/-/-/P3 8 m 5 1 120 8 120 4/7/-/-/-/P4 3 50 4 60 0 20 m 6 130 3/1/1/1/1/1 Dummy 0 0 0 0 20 0 20 0/0/0/0/-/Demand 80 60 20 210 80 450 Penalty 3/3/3/4/4/4 4/4/4/4/6/6 5/-/-/- 1/1/1/8/ 4/4/4/2/2 /-/m-8/STEP 1 Balanced STEP 2 Minimization Phase 1 : Initial Basic Feasible Solution 7*30- 210 8*70- 560 4*50- 200 0*30- 0 1*120- 120 0*20- 0 4*60- 240 3*50- 150

0*20- 0 Total = 1480 PHASE 2 Test for optimality (Modi Method) No. of occupied cells = m + n 1 9=5+51 9=9 Therefore RIM condition satisfied All cells are at independent positions. V1=7 U1=0 U2= -4 U3= -7 U4= -4 U5= -8
7 30 3-(3) 0 8-(0) 8 3 50 0-(-1) 1 0-(0) 0 4 60 0-(-4) 4 m-(1) m-1 0 20 0 20 16-(4) 12 5-(-3) 8 m-(4) m-4 0-(-4) 4 6-(0) 6 1 120 11

V2=8 10-(8)
2

V3=4
8-(4) 4 10-(0) 10

V4=8
70

V5= 4
4 50 0 30 5 8-(-3)

9-(4)

All cell evaluations are positive therefore there is optimum solution.

Question 44. A cement company has three factories which manufacture cement which is then transported to four distinct centres. The quantity of monthly production of each factory, the demand of each distribution centre and the associated transportation cost per quintal are given below:

Distribution Centre Factories W A B C Monthly Demand (In Quintals) 10 7 6 6000 X 8 9 10 6000 Y 5 15 14 8000 Z 4 8 8 5000

Monthly Production (In Quintals) 7000 8000 10000

1.) Suggest the optimal transportation schedule. 2.) Is there any other transportation schedule which is equally attractive? If so, write that

Solution
The given Transportation Problem is o Minimization Type which is a Balanced one. Phase 1: To get the initial feasible solution by Voggles Approximation Method

W 10 A 7 B 6 C bj
6000

X 8 5

Y 4

ai 1 7000

7000

9
6000

15
1000

8 1 1 1
1000

8000 2 2 2 10000 25000

10

14

8
4000

6000 1 1 -

6000 1 1 1

8000 9 1 1

5000 25000 4 0 0

Total Transportation Cost = 5*7000 + 9*6000 + 15*1000 + 8*1000 + 6*6000 + 8*4000 =35000 + 54000 + 15000 + 8000 + 36000 + 32000 =1,80,000 RIM Condition No of allocations = m+n-1 = 6 Therefore, Rim Condition is satisfied.

Phase 2: Modi Method

W 10 A 7 B 6
6000

X 8 14 9
6000

Y 5
7000

Z 4 6

ai 7000 8000 10000 25000 25000

ui 0 10 10

9 15 -
1000

8 8 - -14

+
1000

1 10 1 6000 6000 8000 14 +

C bj

5000

vj

-4

-1

-2

Since the cell evaluations for C - Y is negative, optimum solution is not attained. = Minimum (1000,4000) = 1000 Therefore, In cost = 1000 x 1 = 1000

Therefore, New Cost = 1,80,000 1,000 = 1,79,00

W 10 A 7 B 6
6000

X 8 13 9
6000

Y 5
7000

Z 4 5

ai 7000 8000 10000 25000 25000

ui 0 9 9

8 15 1 10 1 14
1000

8
2000

3000

C bj 6000 6000

8000

5000

vj

-3

-1

Since all the cell evaluations are positive, optimum solution is attained. Ans. 1.) Therefore, the Optimum Transportation Cost is Rs. 1,79,000.

Ans. 2.) No. There is no other Transportation schedule which is equally attractive. The above solution is unique since all delta ij values are negative, and none equals zero.

Question 45. The following data gives transportation cost per unit of product from origin to destination as well as the supply and demand of the product at each end. DESTINATIONS 3 4 35 20 SUPPLY 15

ORIGINS O1

1 7

2 1

O2

21

13

DEMAND

28

1- obtain initial feasible solution. You may use north-west corner rule. 2- Test the solution for optimality using MODI method. Solution: The given transportation problem is of minimization type which is a balanced one i.e. total capacity = total demand Phase I: To get initial feasible solution (basic feasible solution) DESTINATIONS 3 4 35 20 6 9 4 7 DEMAND 9/6/7/6/21 6 28 13/6/SUPPLY 15/9/-

ORIGINS O1

1 7 9

2 1

O2

TOTAL TRANSPORTATION COST FROM O1 O1 O2 O2 TOTAL TO 1 2 3 4 UNITS 9 6 7 6 COST PER UNIT 7 1 14 21 TOTAL COSTS 63 06 28 126 223

Phase II: Test for optimality M= no of origins N= no of rows m+n = 4 (no of occupied cells) 4+2 = 4 Degeneracy exists Thus we introduce an epsilon. DESTINATIONS 3 4 35 20 6 9 7 7 DEMAND Vj 9 7 6 1 7 3 6 20 32 21 6 28 0 13 1 SUPPLY 15/9 Ui 0

ORIGINS O1

1 7 9

2 1

O2

Therefore all cell evaluation >= 0 Optimum solution is attained Therefore optimum solution fot transportation cost is Rs. 223/-.

Question 46. A company has four factories situated in different locations in the country and four sales agencies located in four other locations in the country. The cost of production (Rs per unit), the sales price (Rs per unit), shipping cost (Rs per unit), in the cells of the matrix, monthly capacities and monthly requirements are given below Factory 1 A B C D Monthly Requirement Sales price 7 3 4 8 8 Sales agency 2 5 5 6 7 12 3 6 4 4 6 18 4 4 2 5 5 22 Monthly Capacity 10 15 20 15 Cost of Production 10 15 16 15

20

22

25

18

Find the monthly production and distribution schedule, which will maximize profits (CA, May 1996)

SOLUTION: Using the information given below, we may derive the profit matrix indicating the profit per unit obtainable when produced and sold in various combinations of factories and sales agencies. PROFIT MATRIX: Factory 1 A B C D 3 2 0 -3 Sales agency 2 7 2 0 0 3 9 6 5 4 4 4 1 -3 -2 10 15 20 15 Supply

Initial basic feasible solution VAM Sales Agency Factory 1 2 10 A B 7

Supply

ui

-1

10

7
1

15 8

15

C 2 9 D 6 12 2 9 + 5
2

9 +
-3

18 4 -

12
-4

20

7 11

15

Demand vj

8 5 2

12 0

18 4

22

60

Opportunity loss matrix : Optimal solution Sales Agency Supply Factory A 6

ui 4 5
-1

2 10 2 7

3 0
-2

10

B
0

7 8 9

-1

-1

15 8 12

15

-1

12 4 6 5 18 -2

-2

20

D 12 -2 Demand vj 8 3 2 9 12 2

7 11 22 4

15 60

The optimal solution is expressed as follows: From: Factory A B C D To: Sales Agency 2 4 1 3 2 3 4 Units 10 15 8 12 2 6 7 TOTAL Profit 70 15 0 60 0 24 (14) 155

LINEARPROGRAMMINGPROBLEM

INTRODUCTION
In a decisionmaking embroilment, model formulation is important because it represents the essence of business decision problem. The term formulation is used to mean the process of converting the verbal description and numerical data into mathematical expressions which represents the relevant relationship among decision factors, objectives and restrictions on the use of resources. Linear Programming (LP) is a particular type of technique used for economic allocation of 'scarce' or 'limited' resources, such as labour, material, machine, time, warehouse space,capital,energy,etc.toseveralcompetingactivities,suchasproducts,services,jobs,new equipment, projects, etc. on the basis of a given criterion of optimally. The phrase scarce resources means resources that are not in unlimited in availability during the planning period. The criterion of optimality, generally is either performance, return on investment, profit, cost, utilily,time,distance,etc. George B Dantzing while working with US Air Force during World War II, developed this technique,primarilyforsolvingmilitarylogisticsproblems.Butnow,itisbeingusedextensivelyin all functional areas of management, hospitals, airlines, agriculture, military operations, oil refining, education,energyplanning,pollution control, transportation planning and scheduling, research and development, etc. Even though these applications are diverse, all I.P models consist of certain common properties and assumptions. Before applying linear programming to a reallife decision problem, the decisionmaker must be aware of all these properties and assumptions,whicharediscussedlaterinthischapter. Before discussing in detail the basic concepts and applications of linear programming, let us be clear about the two words, linear and programming. The word linear refers to linear relationship amongvariablesinamodel.Thus,agivenchangeinonevariablewillalwayscausea resulting proportional change in another variable. For example, doubling the investment on a certain project will exactly double the rate of return. The word programming refers to modelling and solving a problem mathematically that involves the economic allocation of limited resources by choosing a particular course of action or strategy among various alternativestrategiestoachievethedesiredobjective. STRUCTUREOFLINEARPROGRAMMING General Structure of LP Model ThegeneralstructureofLPmodelconsistsofthreecomponents. Decision variables (activities): We need to evaluate various alternatives (courses of action) for arriving attheoptimalvalueofobjectivefunction.Obviously,iftherearenoalternativesto select from, we would not need LP. The evaluation of various alternatives is guided by the nature of objective function and availability of resources. For this, we pursue certain activities usually denoted by x1, x2xn. The value of these activities represent the extent to which each of theseisperformed. Forexample,ina productmix manufacturing, the management may use LP todecidehowmanyunitsofeachoftheproducttomanufacturebyusingitslimitedresources suchaspersonnel,machinery,money,material,etc.

These activities are also known as decision variables because they arc under the decision maker's control.Thesedecisionvariables,usuallyinterrelatedintermsofconsumptionoflimited resources,requiresimultaneous solutions. All decision variables are continuous, controllable andnonnegative.Thatis,x1>0,x2>0,....xn>0. The objective function: The objective function of each L.P problem is a mathematical representation of the objective in terms of a measurable quantity such as profit, cost, revenue, distance,etc.Initsgeneralform,itisrepresentedas: Optimise(MaximiseorMinimise)Z=c1x1+c2X2. cnxn where Z is the mcasureofperformance variable, which is a function of x1, x2 ..., xn. Quantities c1, c2cn are parameters that represent the contribution of a unit of the respective variable x1,x2...,xntothemeasureofperformanceZ.Theoptimalvalueofthegivenobjectivefunctionis obtainedbythegraphicalmethodorsimplexmethod. The constraints: There are always certain limitations (or constraints) on the use of resources, e.g.labour,machine,rawmaterial,space,money,etc.thatlimitthedegreetowhichobjectivecan be achieved. Such constraints must be expressed as linear equalities or inequalities in terms of decisionvariables.ThesolutionofanL.Pmodelmustsatisfytheseconstraints. The linear programming method is a technique for choosing the best alternative from a set of feasible alternatives, in situations in which the objective function as well as the constraints can be expressed as linear mathematical functions. In order to apply linear programming, there are certainrequirementstomemet. (a) There should be an objective which should be clearly identifiable and measurable in quantitative terms. It could be, for example, maximisationofsales,of profit,minimisation ofcost,andsoon. (b) Theactivitiestobeincludedshouldbedistinctlyidentifiableandmeasurableinquantitative terms,forinstance,theproductsincludedinaproductionplanningproblem. (c) Theresourcesofthesystemwhicharctobeallocatedfortheattainmentofthegoalshould also be identifiable and measurable quantitatively. They must be in limited supply. The techniquewouldinvolveallocationoftheseresourcesinamannerthatwouldtradeoffthe returnsontheinvestmentoftheresourcesfortheattainmentoftheobjective. (d) The relationships representing the objective as also the resource limitation considerations, represented by the objective function and the constraint equations or inequalities, respectivelymustbelinearinnature. (e) There should be a series of feasible alternative courses of action available to the decision makers,whicharedeterminedbytheresourceconstraints. Whenthesestatedconditionsaresatisfiedinagivensituation,theproblemcanbeexpressedin algebraic form, called the Linear Programming Problem (LPP) and then solved for optimal decision. We shall first illustrate the formulation of linear programming problems and then considerthemethodoftheirsolution.

ADVANTAGESOFLINEARPROGRAMMING Followingarecertainadvantagesoflinearprogramming. 1. Linear programming helps in attaining the optimum use of productive resources. It also indicates how a decisionmaker can employ his productive factors effectively by selectinganddistributing(allocating)theseresources. 2. Linear programming techniques improve the quality of decisions. The decisionmaking approachoftheuserofthistechniquebecomesmoreobjectiveandlesssubjective. 3. Linear programming techniques provide possible and practical solutions since there might be other constraints operating outside the problem which must be taken into account. Just because we can produce so many units docs not mean that they can be sold. Thus, necessary modification of its mathematical solution is required for the sake ofconveniencetothedecisionmaker. 4. Highlightingofbottlenecksintheproductionprocessesisthemostsignificantadvantage of this technique. For example, when a bottleneck occurs, some machines cannot meet demandwhileotherremainsidleforsomeofthetime. 5. Linearprogrammingalsohelpsinreevaluationofabasicplanforchangingconditions.If conditions change when the plan is partly carried out, they can be determined so as to adjusttheremainderoftheplanforbestresults. LIMITATIONSOFLINEARPROGRAMMING In spite of having many advantages and wide areas of applications, there arc some limitations associated with this technique. These are given below. Linear programming treats all relationships among decision variables as linear. However, generally, neither the objective functions nor the constraints in reallife situations concerning business and industrial problemsarelinearlyrelatedtothevariables. 1. WhilesolvinganLPmodel,thereisnoguaranteethatwewillgetintegervaluedsolutions. For example, in finding out how many men and machines would be required lo perform a particular job, a noninteger valued solution will be meaningless. Rounding off the solution to the nearest integer will not yield an optimal solution. In such cases, integer programmingisusedtoensureintegervaluetothedecisionvariables. 2. Linear programming model does not take into consideration the effect of time and uncertainty. Thus, the LP model should be defined in such a way that any change due to internalaswellasexternalfactorscanbeincorporated. 3. Sometimes largescale problems can be solved with linear programming techniques even when assistance of computer is available. For it, the main problem can be fragmented intoseveralsmallproblemsandsolvingeachoneseparately. 4. Parameters appearing in the model are assumed to be constant but in reallife situations, theyarefrequentlyneitherknownnorconstant. It deals with only single objective, whereas in reallife situations we may come across conflicting multiobjective problems. In such cases, instead of the LP model, a goal programmingmodelisusedtogetsatisfactoryvaluesoftheseobjectives.

APPLICATIONAREASOFLINEARPROGRAMMING Linear programming is the most widely used technique of decisionmaking in business and Industry and in various other fields. In this section, we will discuss a few of the broad application areasoflinearprogramming. AgriculturalApplications These applications fall into categories of farm economics and farm management. The former deals with agricultural economy of a nation or region, while the latter is concernedwiththeproblemsoftheindividualfarm. The study of farm economics deals with interregional competition and optimum allocation of crop production. Efficient production patterns can be specified by a linear programmingmodelunderregionallandresourcesandnationaldemandconstraints. Linear programming can be applied in agricultural planning, e.g. allocation of limited resourcessuchas acreage, labour, water supply and working capital, etc. in a way so astomaximisenetrevenue.

MilitaryApplications Military applications include the problem of selecting an air weapon system against enemy so as to keep them pinned down and at the same time minimising the amount of aviation gasoline used. A variation of the transportation problem that maximises the total tonnage of bombs dropped on a set of targets and the problem of community defence against disaster,the solution of which yields the number of defence units that should be used in a given attack in order to provide the required level of protection atthelowestpossiblecost. Product mix A company can produce several different products, each of which requires the use of limited production resources. In such cases, it is essential to determine the quantity of each product to be produced knowing its marginal contributionandamountofavailableresourceusedbyit.Theobjectiveistomaximise thetotalcontribution,subjecttoallconstraints. Production planning This deals with the determination of minimum cost production plan over planning period of an item with a fluctuating demand, considering the initial numberofunitsininventory,productioncapacity,constraintsonproduction,manpower andallrelevantcostfactors.Theobjectiveistominimisetotaloperationcosts. Assemblyline balancing This problem is likely to arise when an item can be made by assemblingdifferent components. The process of assembling requires some specified sequcnce(s).Theobjectiveistominimisethetotalelapsetime. BlendingproblemsTheseproblemsarisewhenaproductcanbemadefromavarietyof available raw materials, each of which has a particular composition and price. The objective here is to determine the minimumcost blend,subjecttoavailability oftheraw materials,andminimumandmaximumconstraintsoncertainproductconstituents. Trim loss When an item is made to a standard size (e.g. glass, paper sheet), the problem that arises is to determine which combination of requirements should be producedfromstandardmaterialsinordertominimisethetrimloss.

ProductionManagement

FinancialManagement Portfolio selection This deals with the selection of specific investment activity amongseveralotheractivities.Theobjectiveistofindtheallocationwhichmaximises thetotalexpectedreturnorminimisesriskundercertainlimitations. Profit planning This deals with the maximisation of the profit margin from investment inplantfacilitiesandequipment,cashinhandandinventory. MarketingManagement Media selection Linear programming technique helps in determining the advertising media mix so as to maximise the effective exposure, subject to limitation of budget, specified exposure rates todifferentmarketsegments,specifiedminimumandmaximum numberofadvertisementsinvariousmedia. Travelling salesman problem The problem of salesman is to find the shortest route fromagivencity,visitingeachofthespecifiedcitiesandthenreturningtotheoriginal pointofdeparture,providednocityshallbevisitedtwiceduringthetour.Suchtypeof problemscanbesolvedwiththehelpofthemodifiedassignmenttechnique. Physical distribution Linear programming determines the most economic and efficient manner of locating manufacturing plants and distribution centres for physical distribution. Staffing problem Linear programming is used to allocate optimum manpower to a particularjobsoastominimisethetotalovertimecostortotalmanpower. Determination of equitable salaries Linear programming technique has been used in determiningequitablesalariesandsalesincentives. Job evaluation and selection Selection of suitable person for a specified job and evaluation of job in organisations has been done with the help of linear programmingtechnique.

PersonnelManagement

Other applications of linear programming lie in the area of administration, education, fleet utilisation,awardingcontracts,hospitaladministrationandcapitalbudgeting,etc. METHODSOFSOLUTION: SolvinganLPprobleminvolves: Selectionofappropriatemethodofsolutionand Thenobtainasolutiontotheproblemwiththehelpofselectedmethod Testwhetherthissolutionisoptimal. Theproblemcanbesolvedbyusing: (1) Graphical method: This method can be used if there are only t decision variables in the LPP. (2) Simplex method: This method is useful in solving LP problems with two or more than two decisionvariables.

TheGraphicalmethodofsolution: This method can be used in case where LPP has only two decision variables. But there is no restriction on the number of constraints. The method uses the familiar graphical presentation with two axes. The method becomes unwieldy when there are three variables since we then needathreedimensionalgraph.Themethodcannotbeusedifthenumberofdecisionvariables ismorethanthree.Insuchacasewehavetouseanongraphicalmethodtoobtainasolution. The graphical method of solution to L.P. problem uses all the equations in a given problem, namely the equation expressing objective unction the constraints imposed in achieving the objective.Theseconstraintscanbeof(i)greaterthan(ii)lessthanor(iii)strictequalitytype. There is also a nonnegativity restriction on the values of the decision variables. It implies that thesolutionoftheproblemliesinthefirstquadrantofthegraph.Alltheserelationsarelinear. SPECIALCASESINLPP 1. Infeasibility 2. Unboundedness 3.Redundancy 3. Alternateoptima(Alternateoptimumsolution) INFEASIBILITY It is a case where there is no solution, which satisfies all the constraints at the same time. This may occur if the problem is not correctly formulated. Graphically, infeasibility is a case wherethereisnoregion,whichsatisfiesallconstraintssimultaneously. UNBOUNDEDNESS A LPP can fail to have an optimum solution if the objective can be made infinitely large without violating any of the constraints. If we come across unboundedness in solving real problems,thentheproblemisnot correctlyformulated. Since,norealsituationpermitsany management to have infinite production of goods and infinite profits, unbounded solution results if in a maximization problem all constraints are of greater than or equal to type. In such a situation there is no upper limit on feasible region. Similarly, an unbounded solution occursinaminimizationproblemifallconstraintsareoflessthanorequaltotype. REDUNDANCY

A constraint, which does not affect the feasible region, is called a redundant constraint. Such a constraint is not necessary for the solution of the problem. It can therefore be omitted while formulating the problem. This will save the computation time. In many LP problems,redundantconstraintsarenotrecognizedasbeingredundantuntiltheproblemis solved. However, when computers are used to solve LPP, redundant constraints do not causeanydifficulty.

ALTERNATIVEOPTIMA

[Theslopeofalineax+by+c=0isdefinedasb]

The solution to a LPP shall always be unique if the slope of the objective function line is different from the slope of all of the constraint lines. Incase, the slope of objective function line is same as the slope of one of its constraint line, then multiple optimum solution might exist. GRAPHICALSOLUTION Extremepointenumerationapproach ConvexPolyhedron TYPESOFSOLUTION (a) Solution. Values of decision variables xj (j = 1, 2, 3, .n) which satisfy the constraints of the generalL.P.P.,iscalledthesolutiontothatL.P.P. (b) Feasible solution. Any solution that also satisfies the nonnegative restrictions of the general L.P.P.iscalledafeasiblesolution. (c) Basic Solution. For a set of m simultaneous equations in n unknowns (n> m). a solution obtained by setting (n m) of the variables equal to zero and solving the remaining m equations in m unknowns is called a basic solution. Zero variables (n m) are called non basicvariablesandremainingmarecalledbasicvariablesandconstituteabasicsolution. (d) Basic Feasible Solution. A feasible solution to a general L.P.P. which is also basic solutioniscalledabasicfeasiblesolution. (e) Optimum Feasible Solution. Any basic feasible solution which optimizes (maximizes or minimizes) the objective function of a general L.P.P. is known as an optimum feasible solutiontothatL.P.P. (f) Degenerate Solution. A basic solution to the system of equations is called degenerate if one ormoreofthebasicvariablesbecomeequaltozero.

THESIMPLEXMETHODOFSOLUTION: The simplex method uses a simplex algorithm; which is an iterative, procedure for finding, in a systematic manner the optimal solution to a linear programming problem. The procedure is based on the observation that if a feasible solution to a linear programming exists; it is located at a corner point of the feasible region determined by the constraints of the problem. The simplex method, selects the optimal solution from among the set of feasible solution to the problem. The algorithm is very efficient as it considers only those feasible solutions, which are provided by the corner points. Thus, we need to consider a minimum number of feasible solutions to obtain an optimal one. The method is quite simple and the first step requires the determination of basic feasible solution. Then, with the help of a limited number of steps the optimumsolutioncanbedetermined. TerminologyofSimplexMethod: Algorithm:Aformalisedsystematicprocedureforsolvingproblem. Simplex Tableau: A table used to keep track of the calculations made b iteration of the simplexprocedureandtoprovidebasisfortableaurevision. Basis: The set of basic variables which are not restricted to zero in the basic solution and are listedinsolutioncolumn. The basic variables: The variables with nonzero positive values make up the basis are called basicvariablesandtheremainingvariablesarecallednonbasicvariables. Iteration: A sequence of steps taken in moving from one basic. The solution to another basic feasiblesolution. Cjrow:Arowinthesimplextableauwhichcontainsthecoefficientsvariablesintheobjective function. Zj row: A row in the simplex tableau whose elements represent the decrease (increase) of the valueoftheobjectivefunctionifoneunitofthejthvariableisbroughtintothesolution. CjZjorjrow:Arowwhoseelementsrepresentnetperunitcontributionofthejthvariable intheobjectivefunction,ifthevariableisbrought intothe newbasicsolution.Positivevalueof j therefore indicates gain and negative value indicates loss in the total value Z obtained of the objectivefunction. Key or pivot column: The column with the largest positive j and it indicates which variable willenterthenextsolutioninamaximizationcase. Key or pivot row: The row with the smallest positive value of the, replacement ratio 0 of the constraint rows. The replacement ratio is obtained by dividing elements in the solution column by the corresponding elements in the key column. The key row indicates the variable thatwillleavethebasistomakeroomfornewenteringvariable. Key(pivot)element:Theelementattheintersectionofkeyrowandkeycolumn. Inadditiontothesetermsinasimplextableauwehavethefollowtermswhicharenecessaryto makealinearprogrammingproblemfittobesolvedbysimplexmethod. Slack variable: A variable used to convert a less than or equal constraint () into equality constraint.Itisaddedtothelefthandsideoftheconstraint. Surplus variable: A variable used to convert a greater than or equal to (?) constraint into equalityconstraint.Itissubtractedfromthelefthandsideoftheconstraint. Artificial variable: It is a variable added to greater than or type () constraint. This is in additiontosurplusvariablesused.

SOMETECHNICALISSUES: In the earlier chapter, we considered some special problems encountered in solving LPP using graphical method. Here we discuss, how the presence of these problems namely, infeasibility, unboundedness,multiplesolutions,degeneracy,isindicatedinasimplextableau. Infeasibility: A solution is called feasible if it satisfies all the constraints and the non negativity conditions. Sometimes it is possible that the constraints may be inconsistent so that there is no feasible solution to the problem. Such a situation is called infeasibility. In a graphical solution, the infeasibility is evident when there is no feasible region in which all the constraints can be satisfied simultaneously. However, problem involving more than two variables cannot be easily graphed and it may not be immediately known that the problem isinfeasible,whenthemodelisconstructed. The simplex method provides information as to where the infeasibility lies. If the simplex algorithm terminates with one or more artificial variables at a positive value, then there is nofeasiblesolutiontotheoriginalproblem. Unboundedness: It occurs when there are no constraints on the solution. So that one or more of the decision variables can be increased indefinitely without violating any of the restrictions. Graphically the objective function line can be moved in the desired direction overthefeasibleregion,withoutanylimits. Howdowerecognizeunboundednessinasimplexmethod?Weknowthereplacementratio determines the leaving variable in a simplex tableau. Now if there are no nonnegative ratios (i.e. ratios are negative) or they are equal to i.e. of the type say 60/0, then we haveunboundedsolution. AlternativeOptima:(Multipleoptimumsolution) Asolutiontoalinearprogrammingproblemmayormaynotbeunique.Thisisindicatedina graphical solution by the slope of the line of the objective function which may coincide with theslopeofoneoftheconstraints. In case of simplex method, Whenever a non basic variable (i.e. a variable which is not in the solution ) has a zero value in the j (i.e. cj j zj j) row of an optimal tableau then bringing that variable into the solution will produce a solution which is also optimal.( AlternativeOptimalsolution) Degeneracy: It occurs when one or more of the basis variables assume zero value. In conditions of degeneracy, the solution would contain a smaller number of non zero variables than the number of constraints i.e. if there are 3 constraints the number of non zerovariablesinthesolutionislessthan3.

Someobviousexamplesofdegeneracyoccurif: Oneormorebasicvariablehaveazerovalueintheoptimalsolution. There is a tie in the replacement ratios for determining the leaving variable. The next tableaugivesthedegeneratesolution. When algorithm pivots in a degenerate row, the objective function value in the next tableau does not change i.e. there is the problem of cycling. The system moves along the same route and the cycle would be repeated forever. There are sophisticated rules

tohandletheproblemofcycling;however,theyareoutsidethescopeofthisbook.Itis alsoobservedthatreallifeproblemsrarelycycle. Explainthesummaryprocedureforthemaximizationcaseofthesimplexmethod. Step1Formulatetheproblem Translate the technical specifications of the problems into inequalities, and make a precise statementoftheobjectivefunction. Converttheinequalitiesintoequalitiesbytheadditionofnonnegativeslackvariables.These inequalities should be symmetric or balanced so that each slack variable appears in each equationwithapropercoefficient. Modifytheobjectivefunctiontoincludetheslackvariables. Step2Designaninitialprogram(Abasicfeasiblesolution) Calculate the net evaluation row: To get a number in the net evaluation row under a column, multiply the entries in that column by the corresponding numbers in the objective column, and add the products. Then subtract this sum from the number listed in the objectiverowatthetopofthe column. Entertheresultinthenet evaluationrowunderthe column. Test : Examine the entries in the net evaluation row for the given simplex tableau. If all the zero or negative, the optimal solution has been obtained. Otherwise, the presence of any positiveentryinthenetevaluationrowindicatesthatabetterprogramcanbeobtained. Step3Revisetheprogram Find the key column. The column under which falls the largest positive netevaluation row entryisthekeycolumn. Find the key row and the key number. Divide the entries in the quantity column by the corresponding nonnegative entries of the key column to form replacement ratios, and compare these ratios. The row in which falls the smallest replacement ratio is the key row. The number which lies at the intersection of the key row and the key column is the key number. Transform the key row. Divide all the numbers in the key row (starting with and to right of the quantity column) by the key number. The resulting numbers form the corresponding rowofthenexttableau. Transform the nonkey rows. Subtract from the old row number of a given key row (in each column ) the product of the corresponding keyrow number and the corresponding fixed ratio formed by dividing the old row number in the key column by the key number. The result will give the corresponding new row number. Make this transformation for all the nonkeyrows. Entertheresultsof(3)and(4)aboveinatableaurepresentingtherevisedprogram. Step4Obtaintheoptimalprogram Repeatsteps3&4untilaprogramhasbeenderived. [ Linearprogramming problems involving the minimization of an objective function usually contain structural of the greater than equal to type. They can also be solved by the simplex method. The simplex procedure for solving a linearprogramming problem in which the objective is to minimize rather than maximize a given function, although basically the same as above,requiressufficientmodificationstodeservethelistingofaseparatesummary.]

Summaryprocedureforthesimplexmethod(minimizationcase) Step1Formulatetheproblem Translate the technical specification of the problem into inequalities, and make a precise statementoftheobjectivityfunction. Convert the equalities into inequalities by the subtraction of nonnegative slack variables. Then modify these equations by the addition of nonnegative artificial slack variables. These equations should be asymmetric or balanced so that each slack and artificial slack variable appearsineachequationwithapropercoefficient. Modifytheobjectivefunctionstoincludealltheslackartificialslackvariables. Step2Designaninitialprogram(abasicfeasiblesolution). Design the first program so that only the artificial slack variables are included in the solution. Place the program in a simplex tableau. In the objective row, above each column variable,placethecorrespondingcoefficientofthatvariablefromstep1.c.Inparticular, placeazeroaboveeachcolumncontaininganartificialslackvariable. Step3Testandrevisetheprogram. Calculate the net evaluation row. Toto get a number in the net evaluation row under a column, multiplying the entries in that column by the corresponding number in the objective column, and add the products. Then subtract the sum from the number listed in the objective row above the column. Enter the result in the netevaluation row under the column. Test. Examine the entries in the netevaluation row for the given simplex tableau. If all the entries are zero or positive, the optimum solution has been obtained. Otherwise, the presence of any negative entry in the netevaluation row indicates that a better program canbeobtained. Revisetheprogram. Find the key column. The under which falls the largest negative netevaluationentry is the keycolumn. Find the key row and the key number. Divide the entries in the Quantity column by the corresponding nonnegative entries in the key column to form replacement ratios, and compare these ratios. The row in which the smallest replacement ratio falls is the key row. The number which lies at the intersection of the key row and the key column is the key number. Transform the key row. Divide all the numbers in the key row (staring with and to the right to the of the Quantity column by the key number. The resulting numbers form the correspondingrowofthenexttableau. Transform the nonkey rows. Subtract from the old row the number of a given nonkey row (in each column) the product of the corresponding fixed ratio formed by dividing the old row number in the key column by the number. The result will give the corresponding new rownumber.Makethetransformationforallrows. Entertheresultsof(3)and(4)aboveinatableaurepresentingtherevisedprogram. Step4Obtaintheoptimalprogram. Repeatsteps3and4untilanoptimalprogramhasbeenderived.

We repeat the following comments comparing the maximization and minimization problems as solvedbythesimplexmethod. The procedure for calculating the netevaluation row is the same in both cases. However, whereas the largest positive value is chosen to identify the incoming product in a maximization problem, the most negative value is chosen in a minimization problem. The rest of the mechanics, namely, the transformation of the key and the nonkey rows, is exactly the same. Thedecisionruleidentifyingtheoptimalsolutionistheabsenceofanypositivevalueinthenon evaluation row in the maximization problem, and the absence of any negative value in the minimizationproblem. DUALSIMPLEX In ordinary simplex method we start with feasible but nonoptimal solution while in Dual Simplex Method, we start with infeasible but optimal solution. Successive iterations will maintain optimality to remove infeasibility of the solution. The following steps are followed to arriveatoptimalfeasiblesolution. (1) Writedownobjectivefunctionasmaximizationandallconstraintsasor=. (2) Constructfirstdualsimplextablefromthegivenprobleminusualmanner. (3) The leaving variable is the basic variable having the most negative value (Break ties, if any, arbitrarily). If all the basic variables are nonnegative, the process ends and the feasible(optimal)solutionisreached. (4) To determine the entering variable take ratios of the coefficients of nonbasic variables in the objective function to the corresponding coefficients in the row associated with the leaving variable. Ignore the ratios with positive or zero denominators. The entering variable is the one with the smallest absolute value of the ratio. (Break ties, if any, arbitrarily). If all the denominators are zero or positive, the problem has no feasible solution. Afterselectingtheenteringandleavingvariables,rowoperationsareappliedasusualto obtainthenexttable. Application of this Dual Simplex Method is useful in Sensitivity Analysis. For example, suppose a new constraint is added to the problem after the optimal solution is reached. If this constraint is not satisfied by the optimal solution, the problem remains optimal but it becomes infeasible.TheDualSimplexMethodisthenusedtocleartheinfeasibilityintheproblem. Example:MinimizeZ=2x1+x2subjectto3x1+x23,4xx+3x26, x1+2x23,x1,x20.

CPMANDPERT
CRITICALPATHANALYSIS Looping:Normallyinthenetwork,thearrowpointsfromlefttoright.Thisconventionis tobestrictlyadhered,asthiswouldavoidtheillogicallooping,asshownwronglybelow.

Dangling: The situation represented by the following diagram is also at fault, since the activityrepresentedbythedanglingarrow911isundertakenwithnoresult.

8
Toovercomeproblemsarisingduetodanglingarrows,wemustmakesurethat All events except the first and the last must have at least one activity entering and one activityleavingthem. Allactivitiesmuststarttofinishwithinevent. Thecriticalpathdetermination Afterhavingcomputedvarioustimeestimates,wearenowinterestedinfindingthecriticalPath of the network. A network will consist of a number of parts. A path is a continuous series of activities through the network that leads from the initial event (or node) of the network to its terminal event. For finding the critical Path, we list out all possible paths through a network alongwiththeirduration.Inthenetworkunderconsideration,variouspathshavebeenlistedas follows: Path lengthindays 12356 36 12456 52 123456 50

Critical Path: a path in a project network is called critical if it is the longest Path. The activities lyingonthecriticalPatharecalledthecriticalactivities. Intheaboveexample,thePath12456withthelongestdurationof52daysisthecriticalPath andtheactivities12,24,45and56arethecriticalactivities. Calculationoffloats Itmaybeobservedthatforeverycriticalactivitiesinanetwork,theearlieststartandlateststart times are the same. This is so since the critical activities cannot be scheduled later than the earliest scheduled time without delaying the total project duration, they do not have any flexibility in scheduling. However, noncritical activities do have some flexibility. That is these activities can be delayed for sometime without affecting the project duration. This flexibility is termedasslackincaseofaneventandasfloatsincaseofanactivity. Somepeopledonotmakeanydistinctionbetweenaslackandafloat. Slacktimeforanevent The slack time or slack of an event in a network is the difference between the latest eventtimeandtheearliesteventtime. Mathematically it may be calculated using the formula Li Ei where Li is the latest allowableoccurrencetimeandEiistheearliestallowableoccurrencetimeofaneventi. Totalfloatofanactivity The total activity float is equal to the difference between the earliest and latest allowable start or finish times for the activity in question. Thus, for an activity (ij), the totalfloatisgivenby: TFij=LSTESTorTFij=LFTEFT In other words, it is the difference between the maximum time available forthe activity and the actual time it takes to complete. Thus, total float indicates the amount of time by which the actual completion of an activity can exceed its earliest expected completiontimewithoutcausinganydelayintheprojectduration. Freefloat Itisdefinedasthatportionofthetotalfloatwithinwhichanactivitycanbemanipulated without affecting the float of the succeeding activities. It can be determined by subtractingtheheadeventslackfromthetotalfloatofanactivity. i.e.FFij=TFij(slackofeventj) Thefreefloatindicatesthevaluebywhichanactivityinquestioncanbedelayedbeyond the earliest starting point without affecting the earliest start, and therefore the total floatoftheactivitiesfollowingit. Independentfloat It is defined as that portion of the total float within which an activity can be delayed for startwithoutaffectingfloatoftheprecedingactivities.Itiscomputedbysubtractingthe taileventslackfromthefreefloat. i.e.IFij=FFij(slackofeventi)

Theindependentfloatisalwayseitherequaltoalessthanthefreefloatofanactivity.If anegativevalueisobtained,theindependentfloatistakentobe0.

Interferingfloat Utilisation of the float of an activity can affect the float of subsequent activities in the network. Thus, interfering float can be defined as that part of the total float which causes a reduction in the float of the successor activities. In other words, it can be defined as the difference between the latest finish time of the activity under consideration and the earliest start time of the following activity, or 0, whichever is larger. Thus, interfering float refers to that portion of the activity float which cannot be consumedwithoutaffectingadverselythefloatofthesubsequentactivityoractivities. DistinctionsbetweenPERTandCPM The PERT and CPM models are similar in terms of their basic structure, rationale and mode of analysis. However, there are certain distinctions between pert and CPM networks which are ennumeratedbelow. 1. CPM is activity oriented that is CPM network is built on the basis of activities. Also resultsofvariouscalculationsareconsideredintermsofactivitiesoftheproject.Onthe otherhand,PERTiseventoriented. 2. CPM is a deterministic model that is it does not take into account the uncertainties involved in the estimation of time for execution of a job or an activity. It completely ignores the probabilistic element of the problem. Pert, however is the probabilistic model. It uses three estimates of the activity time; optimistic, pessimistic and most likely; with a view to take into account time uncertainty. Thus, the expected duration of each activity is probabilistic and expected duration indicates that there is 50% probabilityofgettingthejobdonewithinthattime. 3. CPMplacesdualemphasisontimeandcostandevaluatesthetradeoffbetweenproject cost and project time. By deploying additional resources, it allows the critical path project manager to manipulate project duration within certain limits so that project duration can be shortened at an optimal cost. On the other hand, pert is primarily concerned with time. It helps the manager to schedule and coordinate various activities sothattheprojectcanbecompletedonscheduletime. 4. CPM is commonly used for those projects which are repetitive in nature and where one has prior experience of handling similar projects. What is generally used for those projects with time required to complete various activities are not known before hand. Thus, pert is widely used for planning and scheduling research and development projects.

PROJECTCRASHING In some cases, there are compelling reasons to complete a project earlier than the originally estimated time duration of the critical path computed on the basis of normal activity times, by employing extra resources. An example would be introduction of a new project. The motives in hastening the project might be to ensure that the competitors do not steal amarch. Increase or decrease in the total duration of the completion time for project is closely associated with cost considerations.Insuchcaseswhenthetotaltimedurationisreduced,theprojectcostincreases, but in some exceptional cases project cost is reduced as well. Production cost occurs in the cases of those projects which make use of a certain type of resources for example a machine andwhosetimeismorevaluablethantheoperatorstime. Somedefinitions: Activity cost: it is defined as the cost of performing and completing a particular activity ortask. Crash cost, Cc: this is the direct cost that is anticipated in completing an activity within thecrashtime. Crashtime,Ct:Thisistheminimumtimerequiredtocompleteanactivity. NormalcostNc:thisisthelowestpossibledirectcostrequiredtocompleteanactivity. Normal time Nt: this is the minimum time required to complete an activity at normal cost. Activity costs slope: the costs slope indicates the additional cost incurred per unit of timesavedinreducingthedurationofanactivity.

D
Crash cost

COST

Normal cost

F C O B
Crash Time

DURATION FOR THE JOB

A
Normal Time

Let OA represent the normal duration of completing a job and OC the normal cost involved to complete the job. Assume that the management wish to reduce the time of completing the job to OB from normal time OA. Therefore under such a situation the cost of the project increases and it goes upto say OD (Crash Cost). This only amounts to saving that by reducing the time period by BA the cost has increased by the amount CD. The rate of increase in the cost of activityperunitdecreaseintimeisknownascostslopeandisdescribedasfollows. Activitycostslope= =

CD OD OC = AB OA OB

Crash cos t NormalCost Normaltime Crashtime

Optimum duration: the total project cost is the sum of the direct and indirect costs.Incasethedirectcostvarieswiththeprojectdurationtime,thetotalcost wouldhavetheshapeasindicatedintheabovefigure. At Point A, the cost will be minimum. The time corresponding to this point Point A is called the optimumdurationandthecostasoptimumcostfortheproject.

TOTAL PROJECT COST

COST

DIRECT COST

INDIRECT COST

Crash

Optimal TIME

Normal

TRANSPORTATION&ASSIGNMENT
WhatisanAssignmentProblem? The assignment problem can be stated as a problem where different jobs are to be assigned to different machines on the basis of the cost of doing these jobs. The objectiveistominimizethetotalcostofdoingallthejobsondifferentmachines The peculiarity of the assignment problem is only one job can be assigned to one machinei.e.,itshouldbeaonetooneassignment The cost data is given as a matrix where rows correspond to jobs and columns to machinesandthereareasmanyrowsasthenumberofcolumnsi.e.thenumberofjobs andnumberofMachinesshouldbeequal This can be compared to demand equals supply condition in a balanced transportation problem. In the optimal solution there should be only one assignment in each row and columns of the given assignment table. one can observe various situations where assignmentproblemcanexiste.g.,assignmentofworkerstojobslikeassigningclerksto different counters in a bank or salesman to different areas for sales, different contracts tobidders. Assignment becomes a problem because each job requires different skills and the capacity or efficiency of each person with respect to these jobs can be different. This gives rise to cost differences. If each person is able to do all jobs equally efficiently then allcostswillbethesameandeachjobcanbeassignedtoanyperson. When assignment is a problem it becomes a typical optimization problem it can therefore be compared to a transportation problem. The cost elements are given and is a square matrix and requirement at each destination is one and availability at each originisalsoone. In addition we have number of origins which equals the number of destinations hence the total demand equals total supply . There is only one assignment in each row and each column .However If we compare this to a transportation problem we find that a general transportation problem does not have the above mentioned limitations. These limitationsarepeculiartoassignmentproblemonly. 2)WhatisaBalancedandUnbalancedAssignmentProblem? A balanced assignment problem is one where the number of rows = the number of columns (comparabletoabalancedtransportationproblemwheretotaldemand=totalsupply) Balancedassignmentproblem:noofrows=noofcolumns

Unbalanced assignment is one when the number of rows not equal to the number of columns and vice versa. e.g. The number of machines may be more than the number of jobs or the numberofjobsmaybemorethanthenumberofmachines. In such a situation we introduce dummy row/column(s) in the matrix. These rows or columns have a zero cost element. Thus we can balance the problem and then use Hungarian method to findoptimalassignment. Unbalancedassignmentproblem:noofrowsnotequaltonoofcolumns 3)WhatisaProhibitedAssignmentProblem? A usual assignment problem presumes that all jobs can be performed by all individuals there can be a free or unrestricted assignment of jobs and individuals. A prohibited assignment problem occurs when a machine may not be in, a position to perform a particular job as there be some technical difficulties in using a certain machine for a certain job. In such cases the assignmentisconstrainedbygivenfacts. To solve this type problem of restriction on job assignment we will have to assign a very high cost M This ensures that restricted or impractical combination does not enter the optimal assignmentplanwhichaimsatminimizationoftotalcost. 4) WhatarethemethodstosolveanAssignmentProblem(HungarianMethod)? DIFFERENT METHODS OF ASSIGNMENT PROBLEM Transportation Complete Problem Enumeration Simplex Method Hungarian method Therearedifferentmethodsofsolvinganassignmentproblem:

1)CompleteEnumerationMethod:Thismethodcanbeusedincaseofassignment.problemsof small size. In such cases a complete enumeration and evaluation of all combinations of persons andjobsispossible. One can select the optimal combination. We may also come across more than one optimal combination The number of combinations increases manifold as the size of the problem increasesasthetotalnumberofpossiblecombinationsdependsonthenumberofsay,jobsand machines.Hencetheuseofenumerationmethodisnotfeasibleinrealworldcases. 2) Simplex Method: The assignment problem can be formulated as a linear programming problem and hence can be solved by using simplex method.However solving the problem using simplexmethodcanbeatediousjob. 3)Transportation Method: The assignment problem is comparable to a transportation problem hencetransportationmethodofsolutioncanbeusedtofindoptimumallocation. Howverthemajorproblemisthatallocationdegenerateastheallocationisonbasisonetoone perpersonperpersonperjobHenceweneedamethodspecially designed tosolveassignment problems. 4)HungarianAssignmentMethod(HAM): This method is based on the concept of opportunity cost and is more efficient in solving assignmentproblems. Methodincaseofaminimizationproblem. As we are using the concept opportunity this means that the cost of any opportunity that is lost while taking a particular decision or action is taken into account while making assignment. GivenbelowarethestepsinvolvedtosolveanassignmentproblembyusingHungarianmethod. Step 1: Determine the opportunity cost table Step 2: Determine the possibility of an optimal assignment Step 3 Modify the second reduced cost table

Step 4:

Make the optimum assignment

Step1: DeterminetheopportunitycosttableI Locate the smallest cost in each row and subtract it from each cost figure in that row. This would result in at least one zero in each row. The new table is called reduced cost table. Locatethelowestcostineachcolumnofthereducedcosttablesubtractthisfigurefrom each cost figure in that column. This would result in at least one zero in each row and eachcolumn,inthesecondreducedcosttable. Step2: Determinethepossibilityofanoptimalassignment: Tomakeanoptimalassignmentinasay3x3table.Weshouldbeinapositiontolocate 3 zeros in the table. Such that 3 jobs are assigned to 3 persons and the total opportunity cost is zero .A very convenient way to determine such an optimal assignmentisasfollows: Draw minimum number of straight lines vertical and horizontal, to cover all the zero elements in the second reduced cost table. One cannot draw a diagonal straight line. The aim is that the number of lines (N) to cover all the zero elements should be minimum.Ifthenumberoflinesisequaltothenumberofrows(orcolumns)(n)i.eN=n itispossibletofindoptimalassignment. Example :for a 3 x 3 assignment table we need 3 straight lines which cover all the zero elements in the second reduced cost table. If the number of lines is less than the number of rows (columns) N < n optimum assignment cannot be made. we then move tothenextstep. Step3: Modifythesecondreducedcosttable: Select the smallest number in the table which is not covered by the lines. Subtract this numberfromalluncoverednumbersaswellasfromitself. Add this number to the element which is at the intersection of any vertical and horizontallines. Draw minimum number of lines to cover all the zeros in the revised opportunity cost table. If the number of straight lines at least equals number of rows (columns) an optimum assignmentispossible. Step4: Maketheoptimumassignment: If the assignment table is small in size it is easy to make assignment after step 3. However, in caseoflargetablesitisnecessarytomaketheassignmentssystematically.Sothatthetotalcost isminimum.Todecideoptimumallocation.

 SelectaroworcolumninwhichthereisonlyonezeroelementandencircleitAssignthe jobcorrespondingtothezeroelementi.e.assignthejobtothecirclewithzeroelement. MarkaXinthecellsofallotherzeroslyinginthecolumn(row)oftheencircledzero.So thatthesezeroscannotbeconsideredfornextassignment. Again select a row with one zero element from the remaining rows or columns. Make thenextassignmentcontinueinthismannerforalltherows. Repeattheprocesstillalltheassignmentsaremadei.e.nounmarkedzeroisleft. now we will have one encircled zero in each row and each column of the cost matrix. TheassignmentmadeinthismannerisOptimal. Calculatethetotalcostofassignmentfromtheoriginalgivencosttable.

Maximizationmethod In order to solve a maximization type problem we find the regret values instead of opportunity cost.theproblemcanbesolvedintwoways The first method is by putting a negative sign before the values in the assignment matrix and then solves the sum as a minimization case using Hungarian methods as shownabove. Second method is to locate the largest value in the given matrix and subtract each element in the matrix from this value. Then one can solve this problem as a minimizationcaseusingthenewmodifiedmatrix. Hence there are mainly four methods to solve assignment problem but the most efficient and mostwidelyusedmethodistheHungarianmethod Q5)NoteonTravelingSalesmenproblem. Traveling salesman problem is a routine problem. It can be considered as a typical assignment problem with certain restrictions. Consider a salesman who is assigned the job of visiting n different cities. He knows (is given) the distances between all pairs of cities. He is asked to visit each of the cities only once. The trip should be continuous and he should come back to the city from where he started using the shortest route. It does not matter, from which city he starts. Theserestrictionsimply. (1) Noassignmentshouldbemadealongthediagonal. (2) Nocityshouldbeincludedontheroutemorethanonce This type of problem is quite simple but there is no general algorithm available for its solution. The problem is usually solved by enumeration method, where the number of enumerations is verylarge. For example for a salesman who is instructed to visit five cities we shall have to consider more than100possibleroutes.Themethodisthereforeimpracticalforlargesizeproblemsanditalso impliesapproximationsinfindingroutewithminimumdistance. The peculiar nature of the problem and the various restrictions imposed on resulting solution indicatethatthemethodofsolutiontoatravelingsalesmanproblemshouldinclude: (1)AssigninganinfinitelylargeelementMinthediagonalofthedistancematrix. (2)SolvetheproblemusingHungarianMethodasitgivesshortcutroutebut,

(3)Testthesolutionforfeasibilitywhetheritsatisfiestheconditionofacontinuesroutewithout visitingacitymorethanonce. If the route is not feasible, make adjustments with minimum increase in the total distance traveledbythesalesman.Thisishowonecansolvetravelingsalesmanproblem 6)WhatisaTransportationProblem? A transportation problem is concerned with transportation methods or selecting routes in a product distribution network among the manufacturing plants and distribution warehousessituatedindifferentregionsorlocaloutlets. In applying the transportation method, management is searching for a distribution route,whichcanleadtominimizationoftransportationcostormaximizationofprofit. TheprobleminvolvedbelongstoafamilyofspeciallystructuredLPPcallednetworkflow problems. 7)WhatisaBalancedandUnbalancedTransportationProblem? Balancedtransportationproblem Transportation problems that have the supply and demand equal is a balanced transportation problem. In other words requirements for the rows must equal the requirements for the columns. Unbalancedtransportationproblem An Unbalanced transportation problem is that in which the supply and demand are unequal. Thereare2possibilitiesthatmaketheproblemunbalancedwhichare

2 Possibilities That Make The Problem Unbalanced

Aggregate supply exceeds the aggregate demand

Aggregate demand exceeds the aggregate supply

(i) Aggregatesupplyexceedstheaggregatedemandor (ii) Aggregatedemandexceedstheaggregatesupply. Such problems are called unbalanced problems. It is necessary to balance them before they are solved.

Balancingthetransportationproblem WheretotalSupplyexceedstotaldemand. In such a case the excess supply is, assumed to go to inventory and costs nothing for shipping(transporting). This type of problem is balanced by creating a fictitious destination. This servesthesamepurposeastheslackvariableinthesimplex/methodAcolumnofslackvariables is added to the transportation tableau which represents a dummy destination with a requirement equal to the amount of excess supply and the transportation cost equal to zero. Thisproblemcannowbesolvedusingtheusualtransportationmethods. Whenaggregatedemandexceedsaggregatesupplyinatransportationproblem Whenaggregatedemandexceedsaggregatesupplyinatransportationproblemadummyrowis added to restore the balance. This row has an availability equal to the excess demand and each cell of this row has a zero transportation cost per unit. Once the problem is balanced it can be solvedbytheproceduresnormallyusedtosolveatransportationproblem. 8)WhatisaProhibitedTransportationProblem? Sometimesinagiventransportationproblemsomeroute(s)maynotbeavailable. Thiscouldbeduetoavarietyofreasonslike

REASONS FOR UNAVAILABILITY OF ROUTES

Strikes in certain region

Unfavorable weather conditions on a particular route

Entry restriction.

(i) Strikesincertainregion (ii) Unfavorableweatherconditionsonaparticularroute (iii) Entryrestriction. In such situations there is a restriction on the routes available for transportation. To overcome this difficulty we assign a very large cost M or infinity to such routes. When a large cost is added to these routes they are automatically eliminated form the solution. The problemthencanbesolvedusingusualmethods.

9)WhatisDegeneracyinaTransportationProblem? The initial basic feasible solution to a transportation problem should have a total number of occupiedcell(stonesquares)whichisequaltothetotalnumberofrimrequirementsminusone i.e.m+n1.Whenthisruleisnotmetthesolutionisdegenerate. Degeneracymayoccur Ifthenumberofoccupiedcellsismorethanm+n1. This type of degeneracy arises only in developing the initial solution. It is caused by an improper assignment of frequencies or an error in formulating the problem. In such cases one mustmodifytheinitialsolutioninordertogetasolutionwhichsatisfiestherulem+ni. Theproblembecomesdegenerateatthe (i) Initialstage When in the initial solution the number of occupied cells is less than m + n 1 (rim requirementsminus1)i.e.thenumberofstonesquaresininsufficient (ii) Whentwoormorecellsarevacatedsimultaneously Degeneracy may appear subsequently when two or more cells are vacated simultaneously intheprocessoftransferringtheunits,alongtheclosedlooptoobtainanoptimalsolution. Whentransportationproblembecomesdegenerate Whentransportationproblembecomesdegenerateitcannotbetestedforoptimalitybecauseit is impossible to compute u and, v values with MODI method. To overcome the problem of insufficient number of occupied cell we proceed by assigning an infinitesimally small amount (close to zero) to one or more (if needed) empty cell and treat that cell as occupied cell. This amount is represented by the Greek letter E (epsilon). It is an insignificant value and does not affect the total cost. But it is appreciable enough to be considered a basic variable. When the initial basic solution is degenerate, we assign c to an independent empty cell. An independent cell is one from which a closed loop cannot be traced. It is preferably assigned to a cell which has minimum per unit cost. After introducing e we solve the problem using usual methods of solution. 10)StepstosolveaTransportationProblem. Atransportationproblemcanbesolvedin2phases PHASEI Step 1: Check whether the given T.P. is balanced or not Step 2: Develop initial feasible solution by any of the five methods Step1:

Check whether the given T.P. is balanced or not. If it is unbalanced then balance it by adding a roworacolumn. Step2: Developinitialfeasiblesolutionbyanyofthefivemethods: a)NorthWestCornerRule(NWCR)orSouthWestCornerRule(SWCR) b)RowMinimaMethod(RMM) c)ColumnMinimaMethod(CMM) d)MatrixMinimaMethod(MMM) e)VogelsApproximationMethod(VAM) Wediscussherethetwocommonlyusedmethodstomakeinitialassignments (1)Northwestcornerrule(2)VogelsApproximationMethod(VAM) (1)NorthwestCornerRule: Start with the northwest corner of the transportation tableau and consider the cell in the first column and first row. We have values a1 and b1 at the end on the first row and column i.e. the availabilityatrowoneisa1andrequirementofcolumn1isb1. (i) If al > b1 assign quantity b1 in the cell, i.e. x1 b1. Then proceed horizontally to the next columninthefirstrowuntila1isexhaustedi.e.assigntheremainingnumbera1b1inthenext column. (ii)Ifal<b1thenputXlalandthenproceedverticallydowntothenextrowuntilb1issatisfied. i.e.assignb1a1inthenextrow. (iii) If a1 = b1 then put XII = a1 and proceed diagonally to the next cell or square determined by nextrowandnextcolumn. In this way move horizontally until a supply source is exhausted, and vertically down until destination demand is completed and diagonally when a1 = b1, until the southeast corner of thetableisreached. (2)VogelsApproximationMethod(VAM): The northwest corner rule for initial allocation considers only the requirements and availability of the goods. It does not take into account shipping costs given in the tableau. It is therefore, not a very sound method as it ignores the important factor, namely cost whih we seek to minimize. The VAM, on the other hand considers the cost in each cell while making the allocationsweexplainbelowthismethod. (i) Consider each row of the cost matrix individually and find the difference between two least cost cells in it. Then repeat this exercise for each column. Identify the row or column with the Largestdifference(selectanyoneincaseofatie). (ii) Now consider the cell with minimum cost in that column (or row) and assign the maximum unitspossibletothatcell.

(iii)Deletetherow/columnthatissatisfied. (iv) Again find out the differences and proceed in the same manner as stated in earlier paragraphandcontinueuntilallunitshavebeenassigned. PHASEIITESTFOROPTIMALITY BeforeweenterphaseII,thefollowingtwoconditionsshouldbefulfilledinthatorder. (i) Obtaining a basic feasible solution implies finding a minimum number of ij values. This minimum number is m + n 1. Where m is the number of origins n is the number of destinations. Thus initial assignment should occupy m + n I cells i.e. requirements of demand andsupplycellsminus1. (ii)Theseijshouldbeatindependentpositions TheserequirementsarecalledRIMrequirements. Testforoptimality(orimprovement): Afterobtainingtheinitialfeasiblesolution,thenextstepistotestwhetheritisoptimalornot. WeexplainheretheModifiedDistribution(MODI)Methodfortestingtheoptimality. If the solution is nonoptimal as found from MODI method then we improve the solution by exchangingnonbasicvariableforabasicvariable.Inotherwordswerearrangetheallocationby transferring units from an occupied cell to an empty cell that has the largest net cost change or improvement index, and then shift the units from other related cells so that all the rim (supply, demand)requirementsaresatisfied.Thisisdonebytracingaclosedpathorclosedloop. Step 1: Add a column u to the RHS of the transportation tableau and a row v at the bottom of the tableau. Step 2: Assign, arbitrarily, any value to u or v generally u = 0. Step 3 Having determined u1 and v calculate ij = (u1 + v1) for every unoccupied cell. Step 4: If the solution is not optimal select the cell with largest positive improvement index. Step 5: Test the solution again for optimality and improve fit if necessary

StepI: Add a column u to the RHS of the transportation tableau and a row v at the bottom of the tableau. Step2: Assign,arbitrarily,anyvaluetouorvgenerallyu=0.Thismethodofassigningvaluestou1and v1 is workable only if the initial solution is nondegenerate i.e., for a table there are exactly m + n1occupiedcells. Step3: Havingdeterminedu1andvcalculateij=(u1+v1)foreveryunoccupiedcell.Thisrepresents thenetcostchangeorimprovementindexofthesecells (1)Ifalltheemptycellshavenegativenetcostchangeij,thesolutionisoptimalandunique (2) If an empty cell has a zero Xij and all other empty cells have negative Xij the solution is optimalbutnotunique. (3)IfthesolutionhaspositiveAiforoneormoreemptycellsthesolutionisnotoptimal. Step4: Ifthesolutionisnotoptimalselectthecellwithlargestpositiveimprovementindex.Thentrace aclosedloopandtransfertheunitsalongtheroute. Tracingloop(closedpath): 1)Choosetheunusedsquaretobeevaluated. (2)Beginningwiththeselectedunused squaretrace aloopviausedsquares back totheoriginal unusedsquares.Onlyoneloopexistsforanyunusedsquareinagivensolution. (3) Assign (+) and () signs alternately at each square of the loop beginning with a plus sign at the unused square. Assign these sign in clockwise or anticlockwise direction. These signs indicateadditionorsubtractionofunitstoasquare. (4) Determine the per unit net change in cost as a result of the changes made in tracing the loop. Compare the addition to the decrease in cost. It will give the improvement index. (It is equivalenttojinaLPP). (5)Determinetheimprovementindexforeachunusedsquare. (6) In a minimization case. If all the indices are greater than or equal to zero, the solution is optimal.Ifnotoptimal,weshouldfindabettersolution. Wemayalsonotethefollowingpoints: (i) An even number of at least four cells participate in a closed loop. An occupied cell can be consideredonlyonce.

(ii)Ifthereexistsabasicfeasiblesolutionwithm+n1positivevariables,thentherewouldbe oneandonlyoneclosedloopforeachcell. (iii) All cells that receive a plus or minus sign except the starting empty cell, must be the occupiedcells. (iv) Closed loops may or may not be square or rectangular in shape. They may have peculiar configurationsandaloopmaycrossoveritself. Step5: Test the solution again for optimality and improve fit if necessary. Repeat the process until an optimumsolutionisobtained. 11)SWhatarethedifferencesbetweenassignmentproblemandtransportationproblem? ThedifferencesbetweenAPandTParethefollowing: 1. TPhassupplyanddemandconstraintswhileAPdoesnothavethesame. 2. The optimal test for TP is when all cell evaluation \s are greater than or equal to zero whereasinAPthenumberoflinesmustbeequaltothesizeofmatrix. 3. A TP sum is balanced when demand is equal to supply and an AP sum is balanced when numberofrowsareequaltothenumberofcolumns. 4. forAP.WeuseHungarianmethodandfortransportationweuseMODImethod 5. In AP. We have to assign different jobs to different entities while in transportation we havetofindoptimumtransportationcost.