Chapter08S

Chapter08S - SUPPLEMENT TO CHAPTER 8 THE TRANSPORTATION...

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SUPPLEMENT TO CHAPTER 8: THE TRANSPORTATION MODEL Teaching Notes The transportation method seems to be middle-of-the-road in terms of students’ abilities to develop an intuitive feel for what is happening during the process. Although in practice much of the actual computations are done by computers using the simplex algorithm, I feel that students gain a certain amount of insight and intuitive understanding by going through the calculations. Cell evaluations are illustrated using the stepping-stone method and the MODI method. While it may be more efficient to use the MODI method, note that for the size of the problems students will encounter, the two methods are probably fairly similar in terms of efficiency. Consequently, I think it is more a matter of personal preference which method is used. Solutions to Problems 1. Ship 15 units from source 1 to destination 2 Ship 75 units from source 1 to destination 3 Ship 105 units from source 2 to destination 1 Ship 45 units from source 3 to destination 1 Ship 60 units from source 3 to destination 2 Total cost of this transportation schedule is = \$1,050. 2. If N1 is opened, then the shipment schedule is as follows: Ship 500 units from warehouse 1 to store B at a cost of \$1,500 Ship 400 units from warehouse 2 to store A at a cost of \$2,000 Ship 100 units from warehouse N1 to store B at a cost of \$800 Ship 350 units from warehouse N1 to store C at a cost of \$2,450 Excess supply at warehouse N1 is 50 units Total cost of the transportation schedule if N1 is opened is \$6,750. If N2 is opened, then the shipment schedule is as follows: Ship 500 units from warehouse 1 to store B at a cost of \$1,500 Ship 400 units from warehouse 2 to store A at a cost of \$2,000 Ship 100 units from warehouse N2 to store B at a cost of \$600 Ship 350 units from warehouse N2 to store C at a cost of \$ 1,400 Instructor’s Manual, Chapter 8 Supplement 227

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Excess supply at warehouse N2 is 50 units Total cost of the transportation schedule if N2 is opened is \$5,500. Since 5,500 < 6,750, open the warehouse in location N2. 3. If the plant is located in Toledo, the shipment schedule is as follows: Ship 210 units from Plant 1 to Destination C at a cost of \$2,100 Ship 140 units from plant 2 to destination A at a cost of \$1,680 Ship 80 units from plant 3 to destination A at a cost of \$880 Ship 60 units from plant 3 to destination B at a cost of \$660 Ship 10 units from plant 3 to destination C at a cost of \$120 Ship 160 units from Toledo to destination B at a cost of \$1,280 Total cost of the shipment schedule if the plant is constructed in Toledo is \$6,720. If the plant is located in Cincinnati, the shipment schedule is as follows: Ship 210 units from plant 1 to destination C at a cost of \$2,100 Ship 60 units from plant 2 to destination A at a cost of \$720 Ship 80 units from plant 2 to destination B at a cost of \$1,360 Ship 140 units from plant 3 to destination B at a cost of \$1540 Ship 10 units from plant 3 to destination C at a cost of \$120 Ship 160 units from Cincinnati to destination A at a cost of \$1,120
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Chapter08S - SUPPLEMENT TO CHAPTER 8 THE TRANSPORTATION...

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