Chapter 8, Assignment 1

1. (10 pts.) Consider the transportation problem having the following parameter table:

Destination

1 2 3 4 5

1 2 4 6 5 7

2 7 6 3 M 4

Source 3 8 7 5 2 5

4 0 0 0 0 0

Demand 4 4 2 5 5

Use each of the following methods to obtain an initial basic feasible solution.
a. Northwest Corner Rule
b. Vogel's Approximation method
c. Russell's Approximation method

From one of the initial BF solutions (your choice), conduct the optimality test, and show
iterations to determine the optimal solutions.

2. (4 pts.) Two reservoirs are available to supply the water needs of three cities. Each reservoir
can supply up to 50 million gallons of water per day. Each city would like to receive 40 million
gallons per day. For each million gallons per day of unmet demand, there is a penalty. At city 1,
the penalty is $20; at city 2, the penalty is $22; and at city 3, the penalty is $23. The cost of
transporting 1 million gallons of water from each reservoir to each city are shown in the
following table. Formulate a balanced transportation problem (by introducing dummy demands
and/or dummy supplies) that can be used to minimize the sum of shortage and transport costs.
Do not work iterations, just set up the new table.

To
From City 1 City 2 City 3
Reservoir 1 $7 $8 $10
Reservoir 2 $9 $7 $8

3. (6 pts.) A company supplies goods to three customers, who each require 30 units. The
company has two warehouses. Warehouse 1 has 40 units available and warehouse 2 has 30 units
available. The costs of shipping 1 unit from warehouse to customer are shown in the following
table. There is a penalty for each unmet customer unit of demand; with customer 1 a penalty
cost of $90 is incurred; with customer 2, $80; and with customer 3, $110. Formulate a balanced
transportation problem to minimize the sum of shortage and shipping costs.

To
From Customer 1 Customer 2 Customer 3
Warehouse 1 $15 $35 $25
Warehouse 2 $10 $50 $40

Use Vogel's approximation followed by iterations to optimize this transportation problem.