REVISED

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 130

C H A P T E R

Transportation and Assignment Models

10

TEACHING SUGGESTIONS
Teaching Suggestion 10.1: Transportation Models in the Chapter. This is a long chapter, in part, because of the four transportation algorithms that are discussed. If time is an issue in your course, select one of the two initial solution methods and one of the two nal solution methods to cover in class. The easiest, but not most efcient, are the northwest corner and stepping-stone rules. Teaching Suggestion 10.2: Using the Northwest Corner Rule. This approach is easily understood by students and is appealing to teach for that very reason. Make sure the students understand the weakness of the algorithm (that is, it ignores costs totally). Ask them to come up with their own approaches that could improve on this. Invariably, a good student will present an approach that comes very close to VAM. Name the students approach after him (or her) and tell him he could have been famous if he had devised it 50 years earlier. Teaching Suggestion 10.3: Using the Stepping-Stone Method. Students usually pick up the concept of a closed path and learn to trace the pluses and minuses fairly quickly. But they run into problems when they have to cross over an empty cell. Stress that the cities in the tableau are just in random order, so crossing an unoccupied box is ne. The big test is Table 10.5. Once students comprehend this tracing, they are usually ready to move on. Remind students that there is only one closed path that can be traced for each unused cell. Teaching Suggestion 10.4: Dummy Rows and Columns. Another confusing issue to students is whether to add a dummy row (source) or dummy column (destination) in a transportation problem. A slow and careful explanation is valuable so that students can reach an intuitive understanding as to the correct choice. Also note that the software adds these dummies automatically. Teaching Suggestion 10.5: Handling Degeneracy in Transportation Problems. Just as a warning, be aware that students are often confused by the concept of where to place the zero so that the closed paths can be traced. Carefully explain why you chose or didnt choose a certain cell. The choice of cell can affect the number of iterations that follow. Teaching Suggestion 10.6: Facility Location Problems. These are an important application of the transportation model and make it easy to compare how a new city will t into an existing

shipping network. It is an application that has intuitive appeal. Both QM for Windows and Excel QM software are easy to run on these problems. Teaching Suggestion 10.7: Sensitivity Analysis on the Assignment Problem. This algorithm is easy to use and understand. Tell about solving a large stafng problem, then discuss the cost implications if one worker is not available or insists on doing a particular task. It is easy, with the software, to recompute the answers and conduct a sensitivity analysis. This is the basis of Problem 10-37. Teaching Suggestion 10.8: Maximizing Assignment Problems. This section is needed if students are to solve maximization problems by hand, but QM for Windows and Excel QM software negate the need by handling both types of problems. The section can be skipped if the software is being used. Teaching Suggestion 10.9: Problem 10-37. In assigning this challenging aggregate planning problem, you may wish to rst provide some background information on how to structure the plan. Remind students that back ordering is not permitted, so very large costs must be inserted in many cells. Note that Problem 10-23 (Mehta Company) is a warm-up exercise for this data set problem.

ALTERNATIVE EXAMPLES
Alternative Example 10.1: Let us presume that a product is made at two of our factories which we wish to ship to three of our warehouses. We produce 18 at factory A and 22 at factory B; we want 10 in warehouse 1, 20 in warehouse 2, and 10 in warehouse 3. Per unit transportation costs are A to 1, $4; A to 2, $2; A to 3, $3; B to 1, $3; B to 2, $2; B to 3, $1. The corresponding transportation table is
TO FROM Factory A 3 Factory B Total 10 20 10 2 1 22 40 1 4 Warehouses 2 2 3 3 18 Total

130

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 131

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

131

The northwest corner approach follows:

TO FROM Factory A Factory B Total 10 1 4 10 3 12 20 8 2 10 10 1 22 40 Warehouses 2 2 3 3 18 Total Feb. Demand Capacity Regular Overtime Subcontract Beginning inventory Costs Regular time Overtime Subcontract Inventory carrying cost 55 50 5 12 10

PERIOD Mar. 70 50 5 12 Apr. 75 50 5 10

Let us determine the total cost of transportation with this initial northwest corner solution. For each lled cell, simply multiply the number of units being shipped by the unit shipping cost and then add those transhipment costs. Thus, in the order in which the cells were lled, we have 10($4) 8($2) 12($2) 10($1) $90. Using stepping-stone or MODI, we can nd the optimal solution: SOLUTION:
TO FROM Factory A 3 Factory B Total 10 10 2 20 1 4 18 2 10 10 1 22 40 Warehouses 2 2 3 3 18 Total

$60 per unit 80 per unit 90 per unit $1 per unit per month

See the bottom of the next page for the solution. Alternative Example 10.4: As an example of an assignment problem, let us assume that Susan is a sorority pledge coordinator with four jobs and only three pledges. Susan decides that the assignment problem is appropriate except that she will attempt to minimize total time instead of money (since the pledges arent paid). Susan also realizes that she will have to create a ctitious fourth pledge and she knows that whatever job gets assigned to that pledge will not be done (this semester, anyhow). She creates estimates for the respective times and places them in the following table:
Job 1 Barb Cindy Donna Zingo 4 7 3 0 Job 2 9 8 4 0 Job 3 3 2 5 0 Job 4 8 6 7 0

Cost 18($2) 10($3) 2($2) 10($1) $80. Alternative Example 10.2: There is often an imbalance between the amounts produced and the amounts desired in the warehouses. In Alternative Example 10.1, there were 40 units produced and forty units demanded for warehousing. Let us presume that an additional 4 units are desired at each warehouse, increasing the total demand to 14 24 14 52. The supply shortage of 12 units prevents a solution of this problem until we create a dummy factory that produces a fake 12 units. The cost to ship a false unit from a dummy factory or to a dummy warehouse is zero. After the nal optimal solution is computed, the false units and dummy facilities are ignored. Our new example with a dummy factory and a northwest corner initial solution would look like this:
TO FROM Factory A Factory B Dummy Factory C Total 14 0 24 1 4 14 3 20 0 12 14 4 2 2 0 12 52 1 22 Warehouses 2 2 3 3 18 Total

Zingo is, of course, a ctitious pledge, so her times are all zero. (a) The rst step in this algorithm is to develop the opportunity cost table. This is done by subtracting the smallest number in each row from every other value in that row, then, using these newly created gures, by subtracting the smallest number in each column from every other value in that column. Whenever these smallest values are zero, the subtraction results in no change. Susans resulting matrix is
Job 1 Barb Cindy Donna Zingo 1 5 0 0 Job 2 6 6 1 0 Job 3 0 0 2 0 Job 4 5 4 4 0

Alternative Example 10.3: Here is a production application of the transportation problem. Set up the following problem in a transportation format and solve for the minimum-cost plan:

No change was produced when dealing with the columns since the smallest values were always the zeros from row four. (b) The next step is to draw lines through all of the zeros. The lines are to be straight and either horizontal or vertical. Furthermore, you are to use as few lines as possible. If it requires four of these lines (four because it is a 4 4 matrix), an optimal assignment is already possible. If it requires fewer than four lines, another step is required before optimal assignments may be made. In our example, draw a line through: row four, column three, either column one or row three. One version of the matrix is

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 132

132

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

Job 1 Barb Cindy Donna Zingo 1 5 0 0

Job 2 6 6 1 0

Job 3 0 0 2 0

Job 4 5 4 4 0

(d) Since all of the zeros can be lined out with three lines, this is still not optimal. Hence, we repeat the step of nding the smallest uncovered number and both subtracting that quantity from uncovered numbers and adding it to those numbers at line intersections. The resultant matrix, after being lined again, is
Job 1 Barb Cindy Donna Zingo 0 4 0 1 Job 2 4 4 0 0 Job 3 0 0 3 2 Job 4 3 2 3 0

(c) Since the number of lines required was less than the number of assignees, a third step is required (as is normally the case). Looking at the version of the matrix with the lines through it, determine the smallest number. Subtract this smallest number from every number not covered by a line and add it to every number at the intersection of two lines. Repeat the lining out process, with the following result:
Job 1 Barb Cindy Donna Zingo 0 4 0 0 Job 2 5 5 1 0 Job 3 0 0 3 1 Job 4 4 3 4 0

Since this matrix requires four lines to cover all zeros, we have now reached an optimal solution stage. (e) Although there is more than one sequence in which to make the assignments, in our example the assignments must be: Cindy, job 3; Barb, job 1; Donna, job 2; Zingo, job 4. Since Zingo is a dummy row, the job labeled job 4 does not get completed. The total time is 10.

Which is still not an optimum solution.

Table for Alternative Example 10-3: Transportation Solution

Demand for: Unused Capacity (Dummy) 2 62 82 92 9 60 50 999 Overtime 999 Subcontract 999 Regular time April 999 Overtime 999 Subcontract Demand 55 70 999 10 75 9 999 5 90 0 10 209 2 999 50 80 0 5 5 90 10 60 0 50 91 0 12 80 81 0 5 61 0 50 0 10 60 Regular time February Overtime 90 Subcontract 999 Regular time March 3 45 80 5 91 0 12 5 81 0 5 61 0 50 Total Capacity Available (Supply)

Supply from: Period Beginning inventory

Feb. 0 10

Mar. 1

Apr.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 133

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

133

SOLUTIONS TO DISCUSSION QUESTIONS AND PROBLEMS

10-1. The transportation model is an example of decision making under certainty where a decision maker knows beforehand exactly what state of nature will occur (see Chapter 2). In transportation problems, this means that the costs of each shipping route, the demand at each destination, and the supply at each source are all known with certainty. 10-2. Vogels approximation method gives a good initial solution because it makes each allocation on the basis of the opportunity cost, or penalty, that would be incurred if that allocation is not chosen (see Section 10.6). The northwest corner rule does not take into account the shipping costs associated with each route alternative as does VAM. Nevertheless, the northwest corner rule could provide as low-cost an initial solutionbut only if, by chance, it turned out that the lowest-cost routes happened to be on the initially assigned squares. 10-3. A balanced transportation problem is one in which total demand (from all destinations) is exactly equal to total supply (from all sources). If a problem is unbalanced, it is necessary to establish either a dummy source (if demand is greater than supply) or a dummy destination (if demand is less than supply). Refer to Section 10.7. 10-4. This would cause two lled cells to become empty simultaneously. This means that the solution in the next table will be degenerate. Placing a 0 in one of these two cells and treating this as a lled cell can resolve this difculty. 10-5. The total cost will decrease $2 for each unit that is placed in this empty cell. Since the maximum that can be placed in this cell is 80 units, the total cost will decrease by 2(80) $160. This means the total cost for the solution in the next table will be $900 $160 $740. In general, when moving from one transportation table to the next, the total cost will decrease by the improvement index for the cell to be lled times the minimum number of units in any of the negative cells in the steppingstone path. 10-6. When m n 1 squares (where m number of rows and n number of columns) are not occupied, the solution is degenerate. Not enough squares are occupied to allow us to draw a closed path for all unused squares. Hence we would not be able to evaluate all of the unused routes. To handle this problem, we select one empty square, place a zero in it, pretend as if it is occupied, and proceed as in a normal, nondegenerate case. (To bring the number of allocations to m n 1, it may be necessary to place a zero in more than one empty square.) 10-7. The enumeration method is not a practical means of solving 5 5 or 7 7 problems because of the number of possible assignments to be considered. In the 5 5 case, 5! ( 5 4 3 2 1) 120 alternatives need to be evaluated. In the 7 7 case, there are 7! 5,040 alternatives. 10-8. The assignment problem is a special case of the transportation problem and hence can be solved with the approach shown earlier in this chapter. This is illustrated for the Fix-It Shop problem. Notice that the column and row requirements will always be equal to 1.

TO FROM Adams Brown

Project 1 $11 1 8

Project 2 $14 10 1 9 12

Project 3 $6

Personnel Available 1

11 1 7 1 1 3 1

Cooper Project Needs 1 1

The northwest corner initial assignment above yields a degenerate solution (only three squares are lled instead of the required ve). This will always be a problem when applying the transportation method to assignment problems. The problem will be degenerate because there will be only one assignment in a given row or column. 10-9. It is not necessary to rework the assignment solution. Changing each entry in the cost table will not result in different total opportunity cost tables. The optimal cost will, however, be increased by $25 from $492 to $517 because of the extra $5 charge for each of the ve workers. 10-10. To exclude any unwanted or unacceptable assignment from occurring, it is necessary only to place a very high articial cost in the row and column representing that particular assignment. If, for example, all of the relocation costs for Simmonss rm were in the range $1,000 to $3,000, an articial cost of $20,000 could be placed on the unwanted assignment. Conversely, if we were dealing with a maximization problem, a very low rating would be given to the unacceptable assignment. 10-11. a. Initial solution to modify Executive Furniture Corporation problem using the northwest corner rule:
TO FROM Des Moines Evansville Fort Lauderdale Warehouse Requirements 200 9 Albuquerque 5 200 8 100 7 250 200 300 100 4 50 5 250 700 3 150 Factory Cleveland Capacity 4 3 300

Boston

Total cost of this initial solution 200($5) 100($4) 100($4) 50($3) 250($5) 1,000 400 400 150 1,250 $3,200 b. To see if this initial solution is optimal, we compute improvement indices for each unused square, namely, DC, EA, FA, and FB:

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 134

134

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

DC index path DC to EC to EB to DB $3 3 4 4 $0 EA index path EA to EB to DB to DA $8 4 4 5 $3 FA index path FA to FC to EC to EB to DB to DA $9 5 3 4 4 5 $2 FB index path FB to FC to EC to EB $7 5 3 4 $1 This solution is optimal, so further steppingstone computations are not necessary. c. The improvement index for square DC is zero. This implies the presence of multiple optimal solutions. Practically speaking, management could close the EC shipping route and send 50 units on the DC route instead. The table below illustrates the overall changes in this alternative optimal solution.
TO FROM Des Moines Evansville Fort Lauderdale Warehouse Requirements 200 9 Albuquerque 5 200 8 150 7 250 200 300 50 4 0 5 250 700 Factory Cleveland Capacity 4 50 3 150 3 300 FROM Des Moines Evansville Fort Lauderdale Warehouse Requirements 200 9 TO Albuquerque 5 200 8

0 Boston 4 4 7

0 Factory Cleveland Capacity 3 300 1 3 150 1 5 250 250 2

200

300

When the Ft. Lauderdale row is eliminated from further consideration, we have the opportunity costs shown below. We assign 50 units from Des Moines to Cleveland. Then the only remaining column is Boston, so the assignments are made where possible. Evaluating the empty cells indicates that this is the optimal solution with a cost of $3,200.
0 TO FROM Des Moines Evansville Fort Lauderdale Warehouse Requirements 200 9 Albuquerque 5 200 8 150 7 250 200 300 5 250 50 4 Boston 4 50 3 150 1 0 Factory Cleveland Capacity 3 300 1

Boston

Total cost of alternative optimal solution 200($5) 50($4) 50($3) 150($4) 250($5) $3,200 10-12. Using VAM, we nd the opportunity costs by comparing the lowest cost cell in each row (and column) with the second lowest cost cell in that row (or column). The results are given in the table below. We avoid the high opportunity cost by putting as many units as possible in the lowest cost cell for the row or column with the highest opportunity cost.
3 Albuquerque 5 Des Moines Evansville Fort Lauderdale Warehouse Requirements 200 9 7 5 250 2 200 300 200 8 4 3 150 1 0 Boston 4 0 Factory Cleveland Capacity 3 300 1

10-13. a. Hardrocks initial solution using the northwest corner rule is shown below.
TO FROM 1 2 9 3 Project Requirements 40 50 A 10 40 12 20 7 30 60 30 5 30 6 30 150 8 50 B 4 C 11 70 Plant Capacity

TO FROM

Cost 40($10) 30($4) 20($5) 30($8) 30($6) $1,040 Using the stepping-stone method, the following improvement indices are computed: plant 1project C $11 $4 $5 $8 $4 (closed path: 1-C to 1-B to 2-B to 2-C) plant 2project A $12 $5 $4 $10 $1 (closed path: 2-A to 2-B to 1-B to 1-A) plant 3project A $9 $6 $8 $5 $4 $10 $0 (closed path: 3-A to 3-C to 2-C to 2-B to 1-B to 1-A) plant 3project B $7 $6 $8 $5 $4 (closed path: 3-B to 3-C to 2-C to 2-B) Since all indices are greater than or equal to zero, this initial solution provides the optimal transportation schedule, namely, 40 units

We eliminate the Albuquerque column from consideration because all 200 units in this column have been allocated. We nd new opportunity costs based on the remaining rows and columns. In the next iteration of this process, the opportunity costs are the same as in the original table.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 135

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

135

from 1 to A, 30 units from 1 to B, 20 units from 2 to B, 30 units from 2 to C, and 30 units from 3 to C. b. There is an alternative optimal solution to this problem. This fact is seen by the index for plant 3project A being equal to zero. The other optimal solution, should you wish for students to pursue it, is as follows: plant 1project A 20 units plant 1project B 50 units plant 2project C 50 units plant 3project A 20 units plant 3project C 10 units Total cost remains unchanged at $1,040. 10-14. Hardrocks problem now requires the addition of a dummy project (destination) because supply exceeds demand. The northwest corner initial solution is as follows:
TO FROM 1 2 9 3 Requirements 40 50 A 10 40 12 20 7 30 60 30 5 30 6 30 30 0 60 180 8 0 50 B 4 C 11 Dummy 0 70 Capacity

Cost of initial solution 40($10) 30($4) 20($5) 30($8) 30($6) 30($0) $1,040 This is the same initial assignment and cost as that found in Problem 10-13. This coincidence occurs because the change in plant capacity is at the lower right-hand corner of the table and is unaffected by the northwest corner rule. Testing the unused routes: plant 1project C index $11 8 5 4 $4 plant 1dummy index $0 0 6 8 5 4 $1 best improvement index plant 2project A index $12 5 4 10 $1 plant 2dummy index $0 0 6 8 $2 plant 3project A index $9 6 8 5 4 10 $0 plant 3project B index $7 6 8 5 $4 The second table involves bringing the plant 2dummy route into the solution as follows:
TO FROM 1 2 9 3 Requirements 40 50 A 10 40 12 20 7 60 60 30 30 5 0 6 8 30 0 60 180 0 50 B 4 C 11 Dummy 0 70 Capacity

Cost of this iteration $980.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 136

136

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

Because two squares became zero by opening the plant 2dummy route, the current solution is degenerate (fewer than 3 rows 4 columns 1 square are occupied). We will need to place an articial zero in an unused square (such as plant 2project C) to be able to trace all of the closed paths and evaluate where this solution is optimal. We now trace the closed paths for the six unused squares (we assume that the plant 2project C square has a zero in it). The indices are: plant 1project C $11 8 5 4 $4 plant 1dummy $0 0 5 4 $1 plant 2project A $12 5 4 10 $1 plant 3project A $9 6 8 5 4 10 $0 plant 3project B $7 6 8 5 $4 plant 3dummy $0 0 8 6 $2 Since all indices are zero or positive, an optimal solution has been reached. Again, note that the plant 3project A route has an improvement index of $0, implying that an alternative optimal solution exists. The alternative optimal solution, whose total cost is also $980, is shown in the following table.
TO FROM 1 2 9 3 Requirements 20 40 50 7 40 60 30 A 10 20 12 50 5 20 6 8 30 0 60 180 0 50 B 4 C 11 Dummy 0 70 Capacity

10-15. a. Using the northwest corner rule for the Saussy Lumber Company data, the following initial solution is reached:
TO FROM Pineville Oak Ridge Mapletown Demand 30 30 Customer 1 3 25 4 5 3 30 2 30 35 2 5 3 30 95 3 40 Customer 2 3 Customer 3 2 25 Capacity

The improved solution is shown in the following table. Its cost is $255.
TO FROM Pineville Oak Ridge 3 Mapletown Demand 5 30 30 Customer 1 3 25 4 30 2 25 35 2 10 3 30 95 3 40 Customer 2 3 Customer 3 2 25

Capacity

Initial cost 25($3) 5($4) 30($2) 5($3) 30($3) $260 b. Applying the stepping-stone method, the improvement indices are computed: Pinevillecustomer 2 $3 2 4 3 $2 best Pinevillecustomer 3 improveMapletowncustomer 1 ment index Mapletowncustomer 2 $2 3 4 3 $0 $3 3 3 4 $1 $2 3 3 2 $0

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 137

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

137

Checking improvement indices again, we nd that this improved solution is still not optimal. The improvement index for the Pinevillecustomer 3 route $2 3 3 3 $1. Hence another shift is necessary. The third iteration is shown in the following table:
TO FROM Pineville Oak Ridge 3 Mapletown Demand 30 30 30 Customer 1 3 0 4 30 2 0 35 2 10 3 30 95 Customer 2 3 25 3 40 Customer 3 2 25

Calculations of the Ris, Kjs, and improvement indices are R1 K1 C11 0 K1 3 or K1 3 R3 K1 C31 R3 3 3 or R3 0 R1 K3 C13 0 K3 2 or K3 2 R2 K3 C23 R2 2 3 or R2 1 R2 K2 C22 1 K2 2 or K2 1 Improvement indices: Pinevillecustomer 2 I12 C12 R1 K2 3 0 1 2

Capacity

Oak Ridgecustomer 1 I21 C21 R2 K1 4 1 3 0 Mapletowncustomer 2 I32 C32 R3 K2 2 0 1 1 Mapletowncustomer 3 I33 C33 R3 K3 3 0 2 1 Final solution with Ri and Kj values:
K1 3 TO FROM R1 0 Pineville R2 1 Oak Ridge 3 R3 0 Mapletown Demand 30 30 30 35 K2 1 K3 2

The cost of this solution is $230. Since two squares went to zero simultaneously in this last table, the solution has become degenerate. However, an examination of improvement indices reveals that this current solution is optimal. 10-16. Solving the Saussy Lumber Company problem with MODI, we begin with the same initial solution as found in Problem 10-15:
K1 TO FROM R1 Pineville R2 Oak Ridge R3 Mapletown Demand 30 30 Customer 1 3 25 4 5 3 30 2 30 35 2 5 3 30 95 3 40 K2 Customer 2 3 K3 Customer 3 2 25 Capacity

Customer Customer Customer 1 2 3 Capacity 3 0 4 30 2 2 10 3 30 95 3 25 3 40 2 25

R1 0 R1 K1 C11 0 K1 3 R2 K1 C21 R2 3 4 R2 K2 C22 1 K2 2 R2 K3 C23 1 K3 3 R3 K3 C33 R3 2 3 Improvement indices are as follows: Pinevillecustomer 2 I12 C12 R1 K2 3 0 1 2 best improvement index Pinevillecustomer 3 I13 C13 R1 K3 2 0 2 0 Mapletowncustomer 1 I31 C31 R3 K1 3 1 3 1 Mapletowncustomer 2 I32 C32 R3 K2 2 1 1 0 The nal solution is also evaluated using MODI below and to the right. or or or or or K1 3 R2 1 K2 1 K3 2 R3 1

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 138

138

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

10-17. Krampf Lines Railway Companys initial northwest corner solution is shown below.
K1 50 TO FROM R1 0 R2 50 R3 120 Morgantown Youngstown 100 Pittsburgh Demand 30 45 Coal Valley 50 30 20 40 40 5 25 5 80 20 80 20 20 30 25 120 10 90 60 K2 30 Coaltown 30 K3 40 Coal Junction 60 K4 90 Coalsburg 70 35 Supply

Initial solutions total cost 30(50 miles) 5(30 miles) 40(80 miles) 20(10 miles) 5(80 miles) 20(30 miles) 6,050 car-miles To test for improvement with MODI, we set up an equation for each occupied square: R1 0 R1 K1 50 R1 K2 30 R2 K2 80 R2 K3 10 R3 K3 80 R3 K4 30 0 0 K1 50 or K1 50 K2 30 or K2 30

R2 30 80 or R2 50 50 K3 10 or K3 40 R3 40 80 or R3 120 120 K4 30 or K4 90

index13 C13 R1 K3 60 0 (40) 100 index14 C14 R1 K4 70 0 (90) 160 index21 C21 R2 K1 20 50 50 80 best improvement index index24 C24 R2 K4 90 50 (90) 130 index31 C31 R3 K1 100 120 50 70 index32 C32 R3 K2 40 120 30 110 Second Krampf solutioncost 5,500 miles:
K1 50 TO FROM R1 0 R2 50 R3 10 Morgantown Youngstown 100 Pittsburgh Demand 30 5 45 25 Coal Valley 50 30 20 35 40 5 80 25 80 20 20 30 25 120 10 90 60 K2 30 Coaltown 30 K3 40 Coal Junction 60 K4 20 Coalsburg 70 35 Supply

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 139

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

139

R1 0 R1 K1 50 K1 50 R1 K2 30 K2 30 R2 K2 80 R2 50 R2 K3 10 K3 40 R3 K2 40 R3 10 R3 K4 30 K4 20 best improvement index

index13 C13 R1 K3 60 0 (40) 100 index14 C14 R1 K4 70 0 20 50 index21 C21 R2 K1 20 50 50 80 index24 C24 R2 K4 90 50 20 20 index31 C31 R3 K1 100 10 50 40 index33 C33 R3 K3 80 10 (40) 110 Third and optimal Krampf solution 3,100 miles:

TO FROM Morgantown

Coal Valley 50

Coaltown 30 35 20 80 5 100 40 5 45

Coal Junction 60 10 25 80

Coalsburg 70

Supply 35 90 60 30

Youngstown Pittsburgh Demand

30

20 25 20

25 120

30

10-18. A dummy destination (column) is added. Using VAM, the initial solution is the optimal solution.
TO FROM Houston Phoenix 11 Memphis Warehouse Requirements 800 300 600 200 200 Dallas 8 800 10 250 8 50 14 200 12 300 9 200 650 Atlanta 12 Denver 10 850 Dummy Factory Capacity

In the optimal solution we ship 800 from Houston to Dallas, 50 from Houston to Atlanta, 250 from Phoenix to Atlanta, 200 from Phoenix to Denver, and 300 from Memphis to Atlanta. The total cost is $14,700. 10-19. If Vogels Approximation is used, the initial solution is the optimal solution. This is to ship 120 from Reno to Phoenix, 20 from Denver to Phoenix, 160 from Pittsburgh to Cleveland, and 180 from Denver to Chicago. The total cost is $5,700. 10-20. The problem is unbalanced and a dummy destination must be added. The optimal solution is to ship 120 from Reno to Phoenix, 20 from Denver to Phoenix, 160 from Pittsburgh to

Cleveland, and 130 from Denver to Chicago. There will be 30 units left in Denver that are not needed. The total cost is $5,310. 10-21. a. VAM steps are as follows: 1. Assign 30 units to CW (the W column has the greatest difference, 7) and place Xs in all other row C squares. 2. Assign 20 units to BX. 3. Assign 10 units to BW. 4. Assign 20 units to AZ. 5. Assign 35 units to AY and 15 units to BY.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 140

140

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

TO FROM A B C Power Demand W 12 X 8 10 1 30 40 X 20 20 12 X 50 X 1 15 4 X 20 X 4 35 6 X 7 Y 9 20 6 Z 5

Excess Supply 55 45 30 130 4 0

Total VAM cost 35(9) 20(5) 10(8) 20(1) 15(6) 30(1) 635 b. MODI technique to test for optimality:
K1 11 TO FROM R1 0 R2 3 R3 10 A 8 B C Power Demand 10 1 30 40 20 50 20 20 12 1 15 4 7 30 130 W 12 X 4 35 6 Y 9 20 6 45 Z 5 55 K2 4 K3 9 K4 5 Excess Supply

R1 0 R1 K3 9 K3 9 R1 K4 5 K4 5 R2 K3 6 R2 3 R2 K1 8 K1 11 R2 K2 1 K2 4 R3 K1 1 R3 10 index11 C11 R1 K1 12 0 11 1 index12 C12 R1 K2 4 0 4 0 index24 C24 R2 K4 6 (3) 5 4 index32 C32 R3 K2 12 (10) 4 18 index33 C33 R3 K3 4 (10) 9 5 index34 C34 R3 K4 7 (10) 5 12 Since all improvement indices are zero or positive, this solution is optimal. An alternative optimal solution, however, is AX 20, AY 15, AZ 20, BW 10, BY 35, CW 30, cost $635. 10-22. The initial solution using the northwest corner rule shows that degeneracy exists. The number of rows plus the number of columns minus 1 4 3 1 6. But the number of occupied squares is only 5. Refer to the numbers not circled. To solve the problem a zero will have to be placed in a square (such as 2C). This will enable all unused paths to be closed.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 141

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

141

The optimal solution to Problem 10-22, through the use of our computer program, is circled. Cost $1,036.
TO FROM 72 1 38 2 3 4 Demand 110 38 7 46 5 19 34 34 3 19 31 9 12 7 19 175 6 46 26 5 A 8 15 6 B 9 31 8 38 C 4 72 Supply

10-23. Using VAM to nd an initial solution, we make the following assignment:

TO FROM Bank 1 Bank 2 Bank 3 Demand Hospital 1 8 50 12 X 14 40 90 X 70 70 10 30 40 X 7 10 6 50 50 Hospital 2 9 X 5 X 7 120 250 1 Hospital 3 11 X 8 80 Hospital 4 16 50 1

Supply

Cost of VAM 50($8) 70($7) 10($5) assignment 40($14) 30($6) 50($7) $2,030 Application of the MODI or stepping-stone methods will yield the following solution in one more iteration. The optimal cost is $2,020.

TO FROM Bank 1 Bank 2 Bank 3 Demand

Hospital 1 8 50 12 10 14 30 90

Hospital 2 9 7 70 10

Hospital 3 11 5 6 40

Hospital 4 16

Supply 50 8 80 7

50 50

120 250

70

40

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 142

142

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

10-24. The optimal solution to the Hall Real Estate decision is shown in the table below.

TO FROM First Homestead 9% Commonwealth Washington Federal Loan Needed $60,000 $40,000 $60,000 9% 11% 10% $90,000 $130,000 Hill St. 8% $40,000 10% Banks St. 8% Park Ave. 10% $40,000 12%

Drury Lane 11%

Max. Avail. $ 80,000

10% $40,000 9% $30,000 $70,000

$100,000 $120,000 $300,000

The total interest cost would be $28,300, or an average rate of 9.43%. An alternative optimal solution exists. It is First HomesteadHill Street First HomesteadBanks Street First HomesteadPark Avenue CommonwealthHill Street CommonwealthDrury Lane Washington FederalPark Avenue 30,000 40,000 10,000 30,000 70,000 120,000

Table for Problem 10-26

TO FROM Atlanta Tulsa Los Angeles $14 600 $9 200 $9 700 $10 500 800 1,200 500 2,000 $12 900 New York $11 600 Production Capacity

10-25. Mehtas production smoothing problem is a good exercise in the formulation of transportation problems and applying them to real-world issues. The problem may be set up as in the table on the top of the next page. All squares with Xs represent nonfeasible (backorder) solutions. In applying a computer program to solve such a problem, a very large cost (say about $5,000) would be assigned to each of these squares. This would assure that they would not appear in the nal solution. The dummy destination (month) is added to balance the problem. The initial solution has a cost of $65,700. The costs for the beginning inventory in months 1, 2, 3, and 4 could be 0, 10, 20, and 30 respectively if the carrying cost for the beginning inventory has already been considered. The solution is the same but the cost would be $65,300. 10-26. To determine which new plant will yield the lowest cost for Ashley in combination with the existing plants, we need to solve two transportation problems. We begin by setting up a transportation table that represents the opening of the third plant in New Orleans (see the table). The northwest corner method is used to provide an initial solution. The total cost of this rst solution is seen to be $23,600. You should note that the cost of each individual plant to distribution center route is found by adding the distribution costs to the respective unit production costs. Thus the total production plus shipping cost of one auto top carrier from Atlanta to Los Angeles is $14 ($8 for shipping plus $6 for production).

New Orleans Demand

Total cost (600 units $14) (200 units $9) (700 units $12) (500 units $10) $8,400 $1,800 $8,400 $5,000 $23,600 Is this initial solution optimal? We once again employ the stepping-stone method to test it and to compute improvement indices for unused routes. Improvement index for Atlanta to New York route: $11 (Atlanta to New York) $14 (Atlanta to Los Angeles) $9 (Tulsa to Los Angeles) $12 (Tulsa to New York) $6

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 143

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

143

Table for Problem 10-25

Destination (Month) Sources Beginning inventory Regular prod. (month 1) Overtime (month 1) Regular prod. (month 2) Overtime (month 2) Regular prod. (month 3) Overtime (month 3) Regular prod. (month 4) Overtime (month 4) 150 Outside purchases Demand 120 160 150 30 240 100 150 150 420 470 1 10 40 100 80 130 50 100 90 130 50 100 100 130 50 100 100 130 50 0 450 1,090 0 50 0 100 140 0 50 110 0 100 10 140 150 0 50 110 120 0 100 20 140 150 160 0 50 110 120 130 0 100 2 20 3 30 4 40 Dummy 0 40 Capacity

10-26 (continued) Improvement index for New Orleans to Los Angeles route: $9 (New Orleans to Los Angeles) $10 (New Orleans to New York) $12 (Tulsa to New York) $9 (Tulsa to Los Angeles) $2 Since the rm can save $6 for every unit it ships from Atlanta to New York, it will want to improve the initial solution and send as many as possible (600 in this case) on this currently unused route.
TO FROM Atlanta $9 Tulsa New Orleans Demand 800 800 $9 500 1,200 100 $10 500 2,000 Los Angeles $14 600 $12 900 New York $11 600 Production Capacity

index for Atlanta to Los Angeles $14 $11 $12 $9 $6 index for New Orleans to Los Angeles $9 $10 $12 $9 $2 Since both indices are greater than zero, we have reached an optimal solution. If Ashley selects to open the New Orleans plant, the rms total distribution system cost will be $20,000. If the Houston plant site is chosen, the initial solution is as follows:
TO FROM Atlanta Tulsa Houston Demand 800 Los Angeles $14 600 $9 200 $7 500 1,200 700 $9 500 2,000 $12 900 New York $11 600 Production Capacity

Total cost of initial solution $8,400 $1,800 $8,400 $4,500 $23,100 Improvement index for Atlanta to New York $11 $14 $9 $12 $6

You may want to conrm that the total cost is now $20,000, a savings of $3,600 over the initial solution. Again, we must test the two unused routes to see if their improvement indices are negative numbers.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 144

144

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

Improvement index for Houston to Los Angeles $7 $9 $12 $9 $1 The improved solution by opening Atlanta to New York route is shown below.
TO FROM Atlanta $9 Tulsa Houston Demand 800 800 $7 500 1,200 100 $9 500 2,000 Los Angeles $14 600 $12 900 New York $11 600 Production Capacity

Total cost of improved solution $19,500. Improvement indices for Atlanta to New York and Houston to Los Angeles routes are both positive at this point. Hence an optimal solution has been reached. Upon comparing total costs for the Houston option ($19,500) to those for the New Orleans option ($20,000), we would recommend to Ashley that all factors being equal, the Houston site should be selected. 10-27. Considering Fontainebleau, we have
South America 60 Waterloo Pusan 60 Bogota 75 Fontainebleau Market Demand 4,000 5,000 5,000 80 4,000 10,000 90 5,000 5,000 60 9,000 24,000 50 4,000 55 55 2,000 65 70 5,000 70 4,000 40 70 2,000 Pacic Rim 75

Canada

Europe 75

Capacity 8,000

Optimal cost $1,530,000. Considering Dublin, we have the following initial northwest corner solution:
South America 60 Waterloo Pusan 60 Bogota 70 Dublin Market Demand 4,000 5,000 75 4,000 10,000 4,000 55 1,000 50 5,000 85 5,000 5,000 65 9,000 24,000 4,000 55 1,000 65 70 5,000 40 70 2,000 70 Pacic Rim 75

Canada

Europe 75

Capacity 8,000

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 145

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

145

Final solution
Canada 60 Waterloo Pusan 60 Bogota 70 Dublin Market Demand 4,000 5,000 5,000 75 4,000 10,000 85 5,000 5,000 65 9,000 24,000 50 4,000 55 55 2,000 65 70 5,000 South America 70 4,000 40 70 2,000 Pacic Rim 75 Europe 75 8,000 Capacity

Optimal cost $1,535,000. There is no difference in the routing of shipments, but the Fontainebleau location is $5,000 less expensive than the Dublin location. As a practical matter, changes in exchange rates, subjective factors, or evaluation of future intangibles may overwhelm such a small difference in cost. 10-28. Considering East St. Louis, we have: Initial solutionnorthwest corner rule:
Decatur 20 Blue Earth Ciro Des Moines Capacity 300 250 25 50 22 50 200 150 25 150 150 22 150 150 30 350 800 27 20 30 200 Minn. 17 Cdale 21 E. St. L. 29 250 Demand

Optimal solution:
Decatur 20 Blue Earth Ciro 22 Des Moines Capacity 250 300 200 150 25 50 25 200 27 150 22 100 150 20 50 30 350 800 30 200 Minn. 17 Cdale 21 E. St. L. 29 250 Demand

Optimal cost using East St. Louis: $17,400. Considering St. Louis, we have: Initial solutionnorthwest corner rule:
Decatur 20 Blue Earth Ciro Des Moines Capacity 300 250 25 50 22 50 200 150 25 150 150 22 150 150 31 350 800 27 20 28 200 Minn. 17 Cdale 21 St. Louis 27 250 Demand

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 146

146

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

Optimal solution:
Decatur 20 Blue Earth 25 Ciro 22 Des Moines Capacity 300 300 200 25 50 150 150 200 27 100 22 20 100 31 350 Minn. 17 Cdale 21 50 28 200 St. Louis 27 250 Demand

Optimal cost using St. Louis: $17,250. Therefore, St. Louis is $150 per week less expensive than East St. Louis. 10-29. Considering East St. Louis, we have: Initial solutionnorthwest corner rule:
Decatur 70 Blue Earth Ciro Des Moines Capacity 300 250 75 50 72 50 200 150 85 150 150 92 150 150 70 350 87 90 70 200 Minn. 77 Cdale 91 E. St. L. 69 250 Demand

Optimal solution:
Decatur 70 Blue Earth Ciro 72 Des Moines Capacity 250 300 200 150 85 50 75 200 87 150 92 100 150 90 50 70 350 70 200 Minn. 77 Cdale 91 E. St. L. 69 250 Demand

Optimal cost using East St. Louis: $60,900. Considering St. Louis, we have: Initial solutionnorthwest corner rule:
Decatur 70 Blue Earth Ciro Des Moines Capacity 300 250 75 50 72 50 200 150 85 150 150 92 150 150 81 350 87 90 78 200 Minn. 77 Cdale 91 St. Louis 77 250 Demand

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 147

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

147

Optimal solution:
Decatur 70 Blue Earth 75 Ciro 72 Des Moines Capacity 300 300 200 85 50 150 150 200 87 100 92 90 100 81 350 Minn. 77 Cdale 91 50 78 200 St. Louis 77 250 Demand

Optimal cost using St. Louis: $62,250. Therefore, East St. Louis is $1,350 per week less expensive than St. Louis. 10-30. Step 1row subtraction:
MACHINE JOB A12 A15 B2 B9 W 0 0 0 0 X 4 1 3 2 Y 6 3 3 4 Z 3 0 2 2

Return to step 2cover all zeros:

MACHINE JOB A12 A15 B2 B9 W 0 1 0 0 X 2 0 1 0 Y 3 1 0 1 Z 2 0 1 1

Assignment can be made: Job A12 to machine W Job A15 to machine Z Job B2 to machine Y Job B9 to machine X Time 10 12 12 16 50 hours 10-31. The initial table used for the assignment problem is:
Job 1 Billy Taylor Mark John 400 650 480 500 Job 2 90 120 120 110 Job 3 60 90 80 90 Job 4 120 180 180 150

Column subtraction:
MACHINE JOB A12 A15 B2 B9 W 0 0 0 0 X 3 0 2 1 Y 3 0 0 1 Z 3 0 2 2

Step 2minimum straight lines to cover zeros:

MACHINE JOB A12 A15 B2 B9 W 0 0 0 0 X 3 0 2 1 Y 3 0 0 1 Z 3 0 2 2

Solving this using the assignment module in QM for Windows, the following assignments are made: BillyJob 1; TaylorJob 2; MarkJob 3; JohnJob 4 The total time is 750 minutes. 10-32. For the prohibited route where no assignment may be made, a very high cost (10,000 miles) used to prevent anything from being assigned here. The initial assignment table is:
Kansas City Seattle Arlington Oakland Baltimore 1500 460 1500 960 Chicago 1730 810 1850 610 Detroit 1940 1020 2080 400 Toronto 2070 1270 10000 330

Step 3subtract the smallest uncovered number from all the uncovered numbersadd it to numbers at intersections of two lines:
MACHINE JOB A12 A15 B2 B9 W 0 1 0 0 X 2 0 1 0 Y 3 1 0 1 Z 2 0 1 1

The optimal solution found using the QM for Windows assignment module is: The Seattle crew will go to Detroit. The Arlington crew will go to Kansas City. The Oakland crew will go to Chicago. The Baltimore crew will go to Toronto. The total distance is 4,580 miles.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 148

148

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

10-33. If the total distance is maximized, we assign a very low cost (miles) to the prohibited route to prevent this assignment. A cost of 0 is used. The initial table is:
Kansas City Seattle Arlington Oakland Baltimore 1500 460 1500 960 Chicago 1730 810 1850 610 Detroit 1940 1020 2080 400 Toronto 2070 1270 0 330

10-38.

The following optimal assignments can be made:

Assignment Component C53 to plant 6 Component C81 to plant 3 Component D5 to plant 4 Component D44 to plant 5 Component E2 to plant 2 Component E35 to plant 8 Component G99 to plant 1 Cost 0.06 0.04 0.30 0.10 0.07 0.06 0.55 Total cost $1.18

With the solution found using QM for Windows, the Seattle crew will go to Chicago; the Arlington crew will go to Toronto; the Oakland crew will go to Detroit; the Baltimore crew will go to Kansas City; and the total distance is 6,040 miles. This maximum distance is 1,460 miles more than the minimum distance (4,580). 10-34. Because this is a maximization problem, each number is subtracted from 95. The problem is then solved using the minimization algorithm.
Assignment Andersonnance Sweeneyeconomics Williamsstatistics McKinneymanagement Rating 95 75 85 380 Total rating 335

10-39. Students should note the large numbers used to block infeasible production plans (see Printout 1 on the next page). a. The solution yields a cost of $2,591,200. The plan is shown in Printout 2. There are multiple optimal solutions. b. Yes, the solution now costs $2,640,500 with 275 per month in regular time. c. If overtime rises by $100 per unit to $1,400 per unit, the cost increases, from part a, to $2,610,100. The production plan remains the same as in Printout 2. If overtime cost is $1,200 per unit, the total cost is $2,572,100.

10-35.

Assignment Hawkins to cardiology Condriac to urology Bardot to orthopedics Hoolihan to obstetrics

Rating 18 32 24 12 Total cost scale 86

10-36. Each rating is subtracted from 27.1 because this is a maximization problem.
Assignment 12 P.M. on A 23 P.M. on C 34 P.M. on B 45 P.M. on independent Rating 27.1 17.1 18.5 12.8 Overall rating 75.5 Rating $ 6 10 9 $00 $25

10-37.

Assignment Adams to project 3 Brown to project 2 Cooper to project 1 Davis to dummy

Thus, the optimal solution does not change by adding a fourth member. Davis is assigned to the dummy (nonexistent project). This is because Davis is not the relatively least-cost assignment to any of the rst three projects.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 149

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

149

Printout 1 for Problem 10-39 (Computer Data Entry. The costs are in $1,000s.)
JAN REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB Demand 1. 1.3 1.5 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 255. FEB 1.1 1.4 1.6 1. 1.3 1.5 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 294. MARCH 1.2 1.5 1.7 1.1 1.4 1.6 1. 1.3 1.5 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 321. APR 1.3 1.6 1.8 1.2 1.5 1.7 1.1 1.4 1.6 1. 1.3 1.5 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 10. 301. MAY 1.4 1.7 1.9 1.3 1.6 1.8 1.2 1.5 1.7 1.1 1.4 1.6 1. 1.3 1.5 10. 10. 10. 10. 10. 10. 10. 10. 10. 330. JUNE 1.5 1.8 2. 1.4 1.7 1.9 1.3 1.6 1.8 1.2 1.5 1.7 1.1 1.4 1.6 1. 1.3 1.5 10. 10. 10. 10. 10. 10. 320. JULY 1.6 1.9 2.1 1.5 1.8 2. 1.4 1.7 1.9 1.3 1.6 1.8 1.2 1.5 1.7 1.1 1.4 1.6 1. 1.3 1.5 10. 10. 10. 345. AUG 1.7 2. 2.2 1.6 1.9 2.1 1.5 1.8 2. 1.4 1.7 1.9 1.3 1.6 1.8 1.2 1.5 1.7 1.1 1.4 1.6 1. 1.3 1.5 340. Supply 235 20 12 255 24 15 290 26 15 300 24 17 300 30 17 290 28 19 300 30 19 290 30 20

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 150

150

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

Printout 2 for Problem 10-39 (Computer Solution to HAIFA. Multiple Optimal Solutions)
Optimal cost $2,591,200 REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB REG OT SUB JAN 235. 20. 0. FEB MARCH APR MAY JUNE JULY AUG Dummy

0. 255. 24. 15. 290. 26. 5. 300. 1. 0. 300. 30.

12.

10. 23. 17.

17. 290. 28. 2. 300. 30. 15.

17.

0. 290. 30. 20.

4.

RT regular time; OT overtime; SUB subcontracting

10-40.

a. Here is the rst schedule using our software.

b. The revised schedule is

Optimal Solution: 1 1 2 3 4 5 6 7 8 9 10 0 0 0 0 1 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 1 3 0 0 0 1 0 0 0 0 0 0 4 0 0 1 0 0 0 0 0 0 0 5 1 0 0 0 0 0 0 0 0 0 6 0 1 0 0 0 0 0 0 0 0 7 0 0 0 0 0 0 0 1 0 0

96.0 8 0 0 0 0 0 1 0 0 0 0 9 0 0 0 0 0 0 0 0 1 0 10 0 0 0 0 0 0 1 0 0 0

Optimal Solution: 1 1 2 3 4 5 6 7 8 9 10 0 0 0 0 1 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 1 3 0 0 0 1 0 0 0 0 0 0 4 0 0 0 0 0 0 1 0 0 0 5 1 0 0 0 0 0 0 0 0 0 6 0 1 0 0 0 0 0 0 0 0 7 0 0 1 0 0 0 0 0 0 0

92.0 8 0 0 0 0 0 1 0 0 0 0 9 0 0 0 0 0 0 0 0 1 0 10 0 0 0 0 0 0 0 1 0 0

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 151

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

151

c. Yes, there is a new schedule:

Optimum Solution: 1 1 2 3 4 5 6 7 8 9 10 0 0 0 0 0 0 1 0 0 0 2 0 0 0 0 0 0 0 0 0 1 3 0 0 0 1 0 0 0 0 0 0 4 0 0 0 0 1 0 0 0 0 0 5 1 0 0 0 0 0 0 0 0 0 6 0 1 0 0 0 0 0 0 0 0 7 0 0 1 0 0 0 0 0 0 0 93.0 8 0 0 0 0 0 1 0 0 0 0 9 0 0 0 0 0 0 0 0 1 0 10 0 0 0 0 0 0 0 1 0 0

Third VAM assignment with Ws requirement satised:

2 TO FROM W Y 8 Z Demand X 30 50 65 A 4 X 6 X 2 X 40 5 50 135 3 15 7 B 3 20 6 50 0 C 3 35 1 Available 4 3

SOLUTIONS TO INTERNET HOMEWORK PROBLEMS

10-41. table: Jessie Cohen Clothing Groups rst VAM assignment

The third VAM table involves assigning 20 units to the WC route. This is done because column C has the highest difference and square WC the lowest cost in that column. Final assignment for Cohen Clothing Group:
2 TO FROM A 4 W 0 0 3 Y Z Demand X 6 30 8 X 30 15 7 X 2 50 65 X 40 20 5 50 135 3 4 B 3 20 6 50 0 3 C 3 35 0 Available

2 TO FROM W 6 Y 8 Z Store Demand X 30 A 4

1 B 3 7 2 50 65

2 C 3 35 6 50 5 X 40 50 135 Factory Availability

In the initial assignment table above, we see that the Z row has the greatest difference (3). We assign the minimum possible number of units (50) to the least-cost route (ZB) in that row. Second VAM assignment with Bs requirement satised:
2 TO FROM W 6 Y 8 Z Demand X 30 50 65 X 2 X 40 5 50 135 3 A 4 15 7 6 50 0 B 3 C 3 35 0 Available 4 3

The nal assignment (above) is made by completing the row and column requirements. This means that 30 units must be assigned to YA and 20 units to YC. The total cost of this VAM assignment (15 units $3) (20 units $3) (30 units $6) (20 units $6) (50 units $2) $505. A quick check using the stepping-stone index method indicates that this VAM solution is optimal. 10-42.
OFFICE MAN Jones Smith Wilson OFFICE MAN Jones Omaha 0 0 0 Miami 300 1,100 500 Dallas 400 800 1,800 Column subtraction is done next. Omaha 800 500 500 Miami 1,100 1,600 1,000 Dallas 1,200 1,300 2,300 Row subtraction is done next.

This second VAM table (above) indicates that the greatest difference is now in the B column (4). We may assign up to 15 units to the WB square without exceeding the demand at store B.

Smith Wilson

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 152

152

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

OFFICE MAN Jones Smith Wilson OFFICE MAN Jones Smith Wilson Omaha 0 0 0 Miami 0 800 200 Dallas 0 400 1,400 Subtract smallest number next. SITE 1 2 3 OFFICE MAN Jones Smith Wilson Omaha 200 0 0 Miami 0 600 0 Dallas 0 200 1,200 Cover zeros with lines next. 4 Omaha 0 0 0 Miami 0 800 200 Dallas 0 400 1,400 Cover zeros with lines next. SITE 1 2 3 4

CUSTOMER A 4 1 0 4 CUSTOMER A 4 1 0 4 B 0 0 1 2 C 0 0 2 2 D 5 1 0 0 B 0 0 1 2 C 0 1 2 2 D 5 1 0 0 Cover zeros with lines.

Optimal assignment: taxi at post 1 to customer C taxi at post 2 to customer B taxi at post 3 to customer A taxi at post 4 to customer D Total distance traveled 4 4 6 4 18 miles. 10-44. Original problem:
CASE SQUAD 1 2 3 4 5 CASE SQUAD 1 A 11 14 7 1 5 CASE B 4 1 0 5 17 C 0 6 1 0 16 D 4 0 2 5 18 E 24 24 18 14 0 Column subtraction is done next. A 14 20 10 8 13 B 7 7 3 12 25 C 3 12 4 7 24 D 7 6 5 12 26 E 27 30 21 21 8 Row subtraction is done next.

OFFICE MAN Jones Smith Wilson Omaha 200 0 0 Miami 0 600 0 Dallas 0 200 1,200

Optimal assignment: Jones to Dallas Smith to Omaha Wilson to Miami Cost $1,200 $500 $1,000 $2,700 10-43.
SITE 1 2 3 4 CUSTOMER SITE 1 2 3 4 A 4 1 0 4 B 0 0 1 2 C 1 2 3 3 D 5 1 0 0 Column subtraction is done next.

Original problem:
CUSTOMER A 7 5 6 8 B 3 4 7 6 C 4 6 9 7 D 8 5 6 4 Row subtraction is done next.

2 3 4 5

SQUAD 1 2 3 4 5

A 10 13 6 0 4

B 4 1 0 5 17

C 0 6 1 0 16

D 4 0 2 5 18

E 24 24 18 14 0 Cover zeros with lines.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 153

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

153

CASE SQUAD 1 2 3 4 5 A 10 13 6 0 4 B 4 1 0 5 17 C 0 6 1 0 16 D 4 0 2 5 18 E 24 24 18 14 0

SOLUTION TO ANDREWCARTER, INC., CASE

This case presents some of the basic concepts of aggregate planning by the transportation method. The case involves solving a rather complex set of transportation problems. Four different congurations of operating plants have to be tested. The solutions, although requiring relatively few iterations to optimality, involve degeneracy if solved manually. The costs are:
Total Variable Cost $179,730 188,930 183,430 188,360 Total Fixed Cost $41,000 33,500 34,000 33,000

Optimal assignment: squad 1 to case C squad 2 to case D squad 3 to case B squad 4 to case A squad 5 to case E Total person-days projected using this assignment 3 6 3 8 8 28 days. 10-45.
Assignment C53 at plant 1 C81 at plant 3 D5 at plant 4 D44 at plant 2 Rating 10 cents 4 cents 30 cents 14 cents Total manufacturing cost 58 cents Conguration All plants operating 1 and 2 operating, 3 closed 1 and 3 operating, 2 closed 2 and 3 operating, 1 closed

Total Cost $220,730 222,430 217,430 221,360

10-46. The major difference between the MODI and steppingstone methods is in the procedure used to test for optimality. In the stepping-stone method, we rst draw a closed path for each of the empty squares to calculate its improvement index. Then, the most favorable square (i.e., the one with the largest negative index) is identied. In MODI, however, we rst identify the most favorable square (by using row and column numbers) and then draw a closed path (only for that path) to direct us in improving the solution. 10-47. A northeast corner rule would be directly analogous to the northwest corner rule, but it would simply begin in the upper right-hand corner instead of the upper left-hand corner. We see in the table that this initial solution is degenerate because only four squares (instead of the expected ve) are occupied. The degeneracy condition, by the way, is just a peculiarity of the Executive Furniture Corporation data.
TO FROM Des Moines 8 Evansville Fort Lauderdale Warehouse Requirements 9 300 300 200 200 200 7 4 100 5 300 700 Albuquerque 5 Factory Cleveland Capacity 4 100 3 300 3 100

The lowest weekly total cost, operating plants 1 and 3 with 2 closed, is $217,430. This is $3,300 per week ($171,600 per year) or 1.5% less than the next most economical solution, operating all three plants. Closing a plant without expanding the capacity of the remaining plants means unemployment. The optimum solution, using plants 1 and 3, indicates overtime production of 4,000 units at plant 1 and 0 overtime at plant 3. The all-plant optima have no use of overtime and include substantial idle regular time capacity: 11,000 units (55%) in plant 2 and either 5,000 units in plant 1 (19% of capacity) or 5,000 in plant 3 (20% of capacity). The idled capacity versus unemployment question is an interesting, nonquantitative aspect of the case and could lead to a discussion of the forecasts for the housing market and thus the plants product. The optimum producing and shipping pattern is
From Plant 1 (R.T.) Plant 3 (R.T.) Plant 3 (O.T.) To (Amount) W2 (13,000); W4 (14,000) W1 (5,000); W3 (11,000); W4 (1,000); W5 (8,000) W1 (4,000)

Boston

There are three alternative optimal producing and shipping patterns, where R.T. regular time, O.T. overtime, and W warehouse. Getting the solution manually should not be attempted using the northwest corner rule. It will take eight tableaux to do the all plants conguration, with degeneracy appearing in the seventh tableau; the 1 and 2 conguration takes ve tableaux; and so on. It is strongly suggested that software be used.

SOLUTION TO OLD OREGON WOOD STORE CASE

1. The assignment algorithm can be utilized to yield the fastest time to complete a table with each person assigned one task.
Time (Minutes) 100 70 60 210 240

Person Tom Cathy George Leon

Job Preparation Assembly Finishing Packaging Total time

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 154

154

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

2. If Randy is used, the assignment problem becomes unbalanced and a dummy job must be added. The optimum assignment would be
Person George Tom Leon Randy Job Preparation Assembly Finishing Packaging Total time Time (Minutes) 80 60 80 210 230

INTERNET CASE STUDY

Northwest General Hospital
Optimal Solution
Source From: Station 5A 5A 5A 3G 3G 3G 1S 1S Destination To: Wing 5 6 3 1 3 4 4 2 Number of Trays 60 80 60 80 90 55 155 120

This is a savings of 10 minutes with Cathy becoming the backup. 3. If Cathy is given the preparation task, the solution of the assignment with the remaining three workers assigned to the remaining three tasks is
Time (Minutes) 120 60 60 210 250

Optimal Cost: 4,825 minutes

SOLUTION TO CUSTOM VANS, INC. CASE

Person Cathy Tom George Leon Job Preparation Assembly Finishing Packaging Total time

If Cathy is assigned to the nishing task, the optimum assignment is

Time (Minutes) 80 60 100 210 250

To determine whether the shipping pattern can be improved and where the two new plants should be located, the total costs for the entire transportation system for each combination of plants, as well as the existing shipping pattern costs, will have to be determined. In the headings identifying the combination being discussed, Gary and Fort Wayne will be omitted since they appear in every possible combination. Total costs and optimal solutions for each combination are given on succeeding pages. A summary of the total costs and the respective systems is listed below: DetroitMadison $10,200 MadisonRockford $10,550 DetroitRockford $11,400 Since the total cost is lowest in the GaryFort Wayne DetroitMadison combination ($10,200), the new plants should be located in Detroit and Madison. This system is also an improvement over the existing pattern, which costs $9,000, on a cost-perunit basis. Status quo: $9,000/450 units $20/unit Proposed: $10,200/750 units $13.60/unit Thus the two new plants would denitely be advantageous, both in satisfying demand and in minimizing transportation costs.

Person George Tom Cathy Leon

Job Preparation Assembly Finishing Packaging Total time

4. One possibility would be to combine the packaging operation with nishing. Then, George could build an entire table by himself (in 230 minutes) and Tom could do preparation (100 minutes), Randy the assembly (80 minutes), and Leon the nishing and packaging (90 minutes). This crew could build 4.8 tables in a 480minute workday, while George himself could build 2.09 tablesa total of almost 7 tables per day. To utilize all ve workers, George and Tom could each build entire tables, 2.09 and 1.75 per day, respectively. Letting Randy do preparation (110 minutes), Cathy the assembly (70 minutes), and Leon the nishing and packaging (90 minutes) allows an additional 4.36 tables per day for a total of 8.2 per day. Nine tables per day could be achieved by having Tom prepare and assemble 3 tables, George prepare and nish 3 tables, Cathy assemble 6 tables, Leon nish 6 tables, and Randy prepare 3 tables and package all 9. George, Cathy, and Randy would each have 60 minutes per day unutilized and could build 0.6 table having George do preparation (80 minutes), Cathy assembly and packaging (95 minutes), and Randy the nishing (100 minutes).

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 155

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

155

The optimal solution is:

10 SHOP PLANT Gary Fort Wayne Dummy Demand Chicago 300 X X 300 Milwaukee X X 100 100 Minneapolis X X 150 150 Detroit X 150 50 200 750 Capacity 300 150 300 750 20 40 15

The total cost is 300($10) 100($0) 150($0) 150($15) 50($0) $5,250. This is also the optimal solution with no additional plants. The cost of the existing shipping pattern is $9,000 and is shown below. Thus the existing shipping pattern can be improved. Existing Shipping Pattern
SHOP PLANT Gary Fort Wayne 0 Dummy Demand Kj 100 300 50 100 Chicago 10 200 20 50 0 50 150 0 100 200 30 Milwaukee 20 100 50 100 0 300 750 15 150 Minneapolis 40 Detroit 25 300 Capacity Ri

Total costs 200(10) 50(30) 100(40) 100(15) $9,000

The costs for the additional plants are shown below. Cost Table for Custom Vans, Inc.
SHOP PLANT Existing Gary Fort Wayne Chicago 10 20 Milwaukee 20 30 Minneapolis 40 50 Detroit 25 15 Capacity 300 150

Detroit* Proposed Madison** Rockford Forecast Demand

26 7 5 300

36 2 10 100

56 22 30 150

1 37 35 200

150 150 150

*Since a plant at Detroit could purchase a gallon of berglass for $2 less than any other plant, and one Shower-Ric takes 2 gallons of berglass, a systems approach to transportation warrants that $2(2), $4, be deducted from each price quoted in the case for shipments from Detroit. **Since a plant at Madison could hire labor for $1 less per hour than the other plants, and one Shower-Ric takes 3 labor hours to build, $1(3) or $3 should be deducted from each price quoted for shipments from Madison.

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 156

156

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

DetroitMadison, Iteration 1 (Vogels Approximation Method)

SHOP PLANT Gary Fort Wayne Detroit 7 Madison Demand Kj 300 10 (3) 100 100 20 (18) 2 50 150 40 (13) 10 200 5 (14) 10 22 Chicago 10 200 20 100 26 36 56 150 37 150 750 18 30 Milwaukee 20 100 50 50 1 150 4 (25) (5) 15 15 150 10 Minneapolis 40 Detroit 25 300 0 (10) (5) (10) Capacity Ri

Improvement indices (MODI method): G to Milw: G to D: FW to Milw: FW to Minn: D to C: D to Milw: D to Minn: M to C: M to D: 20 20 0 0 25 5 0 20 30 20 10 0 50 40 10 0 26 10 (4) 20 36 20 (4) 20 56 40 (4) 20 7 10 (18) 15 37 5 (18) 50

All solutions are positive; solution is optimal as shown: G to C: G to Minn: FW to C: FW to D: D to D: M to Milw: M to Minn: 200 units 100 units 100 units 50 units 150 units 100 units 50 units

Total cost 200(10) 100(20) 100(2) 100(40) 50(22) 50(15) 150(1) $10,200

MadisonRockford, Iteration 1 (Vogels Approximation Method)

SHOP PLANT Gary Fort Wayne 7 Madison Rockford Demand Kj 300 10 (2) *0 supplied to avoid degeneracy. 100 5 (8) 50 5 100 10 150 150 25 (8) 200 25 (10) (10) 2 0* 30 35 150 750 5 (1) 22 Chicago 10 250 20 30 50 150 37 150 3 Milwaukee 20 Minneapolis 40 50 15 150 10 (5) (5) (15) Detroit 25 300 0 (10) Capacity Ri

Improvement indices (MODI method): G to Milw: G to Minn: FW to Milw: FW to C: FW to Minn: 20 5 0 15 40 25 0 15 30 5 (10) 35 20 10 (10) 20 50 25 (10) 35

M to D: R to C:

37 25 (3) 15 5 10 5 10 best improvement (see iteration 2) R to Minn: 10 5 5 0 R to D: 35 25 5 5

REVISED
M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 157

CHAPTER 10

TRANSPORTATION

AND

ASSIGNMENT MODELS

157

MadisonRockford, Iteration 2
10 SHOP PLANT 0 Gary 10 Fort Wayne 7 13 Madison 5 5 Rockford Demand Kj 50 300 10 100 15 100 10 100 150 35 200 25 2 50 30 35 150 750 5 22 Chicago 10 250 20 30 50 150 37 150 13 Milwaukee 20 Minneapolis 40 50 15 150 10 Detroit 25 300 0 Capacity Ri 15 35 25

Improvement indices (MODI method): G to Milw: G to Minn: FW to C: FW to Milw: FW to Minn: M to C: M to D: R to Milw: R to D: 20 15 0 5 40 35 0 5 20 10 (10) 20 30 15 (10) 25 50 35 (10) 25 7 10 (13) 10 37 25 (13) 25 10 15 (5) 0 35 25 (5) 15

Optimal solution: G to C: G to D: FW to D: M to Milw: M to Minn: R to C: R to Minn: 250 units 50 units 150 units 100 units 50 units 50 units 100 units

Total cost 250(10) 50(5) 100(2) 50(22) 100(30) 50(25) 150(15) $10,550

DetroitRockford (Vogels Approximation Method)

10 SHOP PLANT 0 Gary 10 Fort Wayne 4 Detroit 5 10 Rockford Demand Kj 300 10 (5) (15) *0 supplied to avoid degeneracy. 0* 100 20 (10) 10 150 150 40 (10) 200 5 (14) (10) 30 Chicago 10 200 20 100 26 36 56 150 35 150 750 10 (5) 100 30 50 50 1 150 4 (25) 15 150 10 Milwaukee 20 Minneapolis 40 Detroit 25 300 0 Capacity Ri (10) (30) (5) (10) 30 40 5

Improvement indices (MODI method) for Detroit-Rockford: G to Minn: G to D: FW to Milw: FW to Minn: D to C: D to Milw: D to Minn: R to C: R to D: 40 40 0 0 25 5 0 20 30 20 10 0 50 40 10 0 26 10 (4) 20 36 20 (4) 20 56 40 (4) 20 5 10 (10) 5 35 5 (10) 40

Optimal solution: G to C: G to Milw: FW to C: D to D: FW to D: R to Minn: 200 units 100 units 100 units 150 units 50 units 150 units

Total costs 200(10) 100(20) 100(20) 50(15) 150(1) 150(30) $11,400