Part 1

Management Decision Model

T A B C Supply
1 14 8 3 250

2 9 5 7 280

3 6 12 4 270

Demand 270 280 250 800

Compute transportation cost using:

1. Northwest Corner Rule

a. Balance the problem.

ΣSupply = ΣDemand
800=800 (This is a balance transportation problem)

b. Start allocating from North-West Corner cell.

T A B C Supply
1 250 14 8 3 250
0
2 20 9 260 5 7 280
0
3 6 20 12 250 4 270
0
Demand 270 280 250 800
0 0 0

c. Write the allocations and calculate the transport cost.

T A B C Supply
1 250 14 8 3 250

2 20 9 260 5 7 280

3 6 20 12 250 4 270

Demand 270 280 250 800

 The transportation cost using the Northwest Corner Rule is:

Transportation cost = (14 x 250) + (9 x 20) + (5 x 260) + (12 x 20) + (4 x 250)

Transportation cost = 6,220

2. Hungarian Method

T A B C
1 14 8 3

2 9 5 7

3 6 12 4

Step 1: Find out each row minimum element and subtract it from the row.

T A B C Row Reduction
1 11 5 0 (-3)

2 4 0 2 (-5)

3 2 8 0 (-4)

Step 2: Find out each column minimum element and subtract it from the column.

T A B C Row Reduction
1 9 5 0

2 2 0 2

3 0 8 0

Column (-2) (0) (0)

Reduction
Step 3: Draw a minimum number of lines to cover all zeroes of the matrix.

T A B C
1 9 5 0

2 2 0 2

3 0 8 0

Rows = 3 Squares = 3

Number of squares marked is equal to the number of rows in the matrix. This indicates
that the optimal solution has been reached.

Step 4: Optimal Solution is:

T A B C
1 9 5 0 1C

2 2 0 2 2B

3 0 8 0 3A

T A B C
1 14 8 3 3

2 9 5 7 5

3 6 12 4 6

Step 5: Compute Transportation Cost:

Transportation cost = (3 x 250) + (5 x 280) + (6 x 270)
Transportation cost = 3,770
Part 2

The Omega Department is planning to bid on large project for the development of a new
communication system for commercial planes. The table below shows the activities, times and
sequence required.

Activity Immediate Time

Predecessor (Weeks)
A - 4
B A 3
C A 5
D A 3
E B 2
F C, D 5
G D 2
H C 2
I E, G, H 3

a. Draw the network diagram.

2

E
3

B
2

H
5

4 C I 3
A

F 5

3
G

b. What is the critical path?

 The following possible paths are:

Path Duration Total

(Weeks) (Weeks)
A-B-E-I 4+3+2+3 12
A-C-H-I 4+5+2+3 14
A-C-F 4+5+5 14
A-D-F 4+3+5 12
A-D-G-I 4+3+2+3 12

The critical path consists of the longest sequence of activities from project start to finish
that must be completed to ensure the project is finished by a certain time. The critical
paths in this problem are path A-C-H-I and path A-C-F as it takes 14 weeks to complete
the project.

c. How many weeks will it take to complete project?

The following possible paths are:

Path Duration Total

(Weeks) (Weeks)
A-B-E-I 4+3+2+3 12
A-C-H-I 4+5+2+3 14
A-C-F 4+5+5 14
A-D-F 4+3+5 12
A-D-G-I 4+3+2+3 12

It will take 14 weeks to complete the project.

d. How many slack time does activity D have?

Slack time is the amount of time that can delay the completion of a task without delaying
the other tasks or without delaying the overall deadline of project. Activity D have 2
weeks slack time.

Computation: Slack Time = Late Start (LS) – Early Start (ES) or

Slack Time = Late Finish (LF) – Early Finish (EF)

Slack Time = 6-4 = 2 or Slack Time = 9-7 = 2

Slack Time of Activity D = 2 weeks

Illustration: Critical Path 1: A-C-H-I and Critical Path 2: A-C-F

 2

E
3

B
2

H
5

4 C I 3
A

F 5

3
G