Exercise 2

The Energetic Company needs to make plans for the energy systems for a new
building.
The energy needs in the building fall into three categories: (1) electricity,
(2) heating water, and (3) heating space in the building. The daily requirements for
these three categories (all measured in the same units) are

Electricity 20 units
Water heating 10 units
Space heating 30 units

The three possible sources of energy to meet these needs are electricity, natural
gas, and a solar heating unit that can be installed on the roof. The size of the roof
limits the largest possible solar heater to 30 units. Electricity can supply up to 20
units and natural gas can supply up to 15 units . Electricity needs can be met only
by purchasing electricity (at a cost of $50 per unit). Both other energy needs can be
met by any source or combination of sources. The unit cost are
 Exercise 2
Cont..

Electricity Natural Gas Solar Heater

Water Heating $90 $60 $30
Space Heating $80 $50 $40

The objective is to minimize the total cost of meeting the energy needs.
(a) Formulate this problem as a transportation problem by constructing the
appropriate parameter table.
(b) Use northwest corner rule to obtain the initial solution for this problem.
(c) Starting with the initial solution, apply the stepping stone method to obtain the
optimal solution.
 Heating
Electricity
Water
Space Heating Supply

Electricit $50 $90 $80

y 20
$50 $60 $50
Nat Gas
15
Solar $50 $30 $40
Heating 30

65
Demand 20 10 30
60
 Heating
Electricity
Water
Space Heating Supply

Electricit $50 $90 $80

y 20
$50 $60 $50
Nat Gas
15
Solar $50 $30 $40
Heating 30

65
Demand 20 10 30
60
 E HW SH Dummy Supply
$50 $90 $80 $0
E 20
20 0
$50 $60 $50 $0
NG 15
10 5
$50 $30 $40 $0
SH 5 30
25
5 65
Demand 20 10 30
65

Cost of transport plan: Unused Cell

E-E = 20x50 = 1,000 E-SH = 80-50+60-90 =0
E-HW = 0x90 = 0 E-D = 0-0+40-50+60-90 =-40
NG-E = 50-50+90-60 =30
NG-HW = 10x60 = 600
NG-D = 0-0+40-50 =-10
NH-SH = 5x50 = 250 SH-E = 50-50+90-60+50-40 = 40
SH-SH = 25x40 = 1,000 SH-HW = 30-60+50-40 = -20
SH-D = 5X0 = 0
$2,850
 E HW SH Dummy Supply
$50 $90 $80 $0
E 0 20
20
$50 $60 $50 $0
NG 15
10 5
$50 $30 $40 $0
SH 5 30
25
5 65
Demand 20 10 30
65

Unused Cell
E-HW = 90-0+0-40+50-60 = 40
E-SH = 80-0+0-40 = 40
NG-E = 50-50+0-0+40-50 = -10
NG-D = 0-0+40-50 = -10
SH-E = 50-50+0-0= 0
SH-HW = 30-60+50-40= -20
 E HW SH Dummy Supply
$50 $90 $80 $0
E 0 20
20
$50 $60 $50 $0
NG 15
15
$50 $30 $40 $0
SH 5 30
10 15
5 65
Demand 20 10 30
65

Unused Cell
E-HW = 90-0+0—30 = 60
E-SH = 80-0+0-40 = 40
NG-E = 50-50+0-0+40-50 = -10
NG-HW = 60-50+40-30 = 20
NG-D = 0-0+40-50 = -10
SH-E = 50-50+0-0 = 0
 E HW SH Dummy Supply
$50 $90 $80 $0
E 0 20
20
$50 $60 $50 $0
NG 5 15
10
$50 $30 $40 $0
SH 30
10 20
5 65
Demand 20 10 30
65

Cost of transport plan: Unused Cell

E-E = 20x50 = 1,000 E-HW = 90-0+0-50+40-30= 50
E-D = 0x0 = 0 E-SH = 80-0+0-50 = 30
NG-E = 50-50+0-0= 0
NG-SH = 10x50 = 500
NG-HW = 60-50+40-30 = 20
NG-D = 5x0 = 0 SH-E = 50-50+0-0+50-40 = 10
SH-HW = 10x30 = 300 SH-D = 0-40+50-0 = 10
SH-SH = 20X40 = 800
$2,600
Conclusion
To minimize the cost to $2600, the following energy distribution plan must be
followed.

• Supply 20 units of electricity to electricity requirement of the building

• Supply 10 units of natural gas to space heating requirement of the
building
• Supply 10 units of solar energy to the heating water requirement of the
building
• Supply 20 units of solar energy to solar heating requirements of the
building