1) Suppose that England, France, and Spain produce all the wheat, barley, and oats in the

world. The world demand for wheat requires 125 million acres of land devoted to wheat
production. Similarly, 60 million acres of land are required for barley and 75 million
acres of land for oats. The total amount of land available for these purposes in England,
France, and Spain is 70 million acres, 110 million acres, and 80 million acres,
respectively. The number of hours of labor needed in England, France, and Spain to
produce an acre of wheat is 18, 13, and 16, respectively. The number of hours of labor
needed in England, France, and Spain to produce an acre of barley is 15, 12, and 12,
respectively. The number of hours of labor needed in England, France, and Spain to
produce an acre of oats is 12, 10, and 16, respectively. The labor cost per hour in
producing wheat is $9.00, $7.20, and $9.90 in England, France, and Spain, respectively.
The labor cost per hour in producing barley is $8.10, $9.00, and $8.40 in England,
France, and Spain, respectively. The labor cost per hour in producing oats is $6.90, $7.50,
and $6.30 in England, France, and Spain, respectively. The problem is to allocate land
use in each country so as to meet the world food requirement and minimize the total labor
cost.

(a) Formulate this problem as a transportation problem by constructing the appropriate

parameter table.

(b) Draw the network representation of this problem.

(c) Obtain an optimal solution. (Use Northwest Corner Method to find the initial solution)

2) Consider the transportation problem having the following parameter table:

Destination Supply
Source 1 2 3 4 5
1 8 6 3 7 5 20
2 5 M 8 4 7 30
3 6 3 9 6 8 30
4 (Dummy) 0 0 0 0 0 20
Demand 25 25 20 10 20 100

After several iterations of the transportation simplex method, a BF solution is obtained that has
the following basic variables: x13 = 20, x21 = 25, x24 = 5, x32 = 25, x34 = 5, x42 = 0, x43 = 0,
x45 = 20. Continue the transportation simplex method for two more iterations by hand. After two
iterations, state whether the solution is optimal and, if so, why.
3) A contractor, Susan Meyer, has to haul gravel to three building sites. She can purchase as
much as 18 tons at a gravel pit in the north of the city and 14 tons at one in the south. She
needs 10, 5, and 10 tons at sites 1, 2, and 3, respectively. The purchase price per ton at
each gravel pit and the hauling cost per ton are given in the table below.

Hauling Cost Per Ton at Site Price Per Ton

Pit 1 2 3
North $30 $60 $50 $100
South $60 $30 $40 $120

Susan wishes to determine how much to haul from each pit to each site to minimize the
total cost for purchasing and hauling gravel.

(a) Formulate a linear programming model for this problem. Using the Big M method,
construct the initial simplex tableau ready to apply the simplex method (but do not
actually solve).
(b) Now formulate this problem as a transportation problem by constructing the
appropriate parameter table. Compare the size of this table (and the corresponding
transportation simplex tableau) used by the transportation simplex method with the
size of the simplex tableaux from part (a) that would be needed by the simplex
method.
(c) Susan Meyer notices that she can supply sites 1 and 2 completely from the north pit
and site 3 completely from the south pit. Use the optimality test (but no iterations) of
the transportation simplex method to check whether the corresponding BF solution is
optimal.
(d) Starting with the northwest corner rule, interactively apply the transportation simplex
method to solve the problem as formulated in part (b).
(e) As usual, let cij denote the unit cost associated with source i and destination j as given
in the parameter table constructed in part (b). For the optimal solution obtained in part
(d), suppose that the value of cij for each basic variable xij is fixed at the value given
in the parameter table, but that the value of cij for each nonbasic variable xij possibly
can be altered through bargaining because the site manager wants to pick up the
business. Use sensitivity analysis to determine the allowable range to stay optimal
for each of the latter cij, and explain how this information is useful to the contractor.