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TEACHING SUGGESTIONS

Teaching Suggestion 10.1: Transportation Models in the Chapter.

This is a long chapter, in part, because of the four transportation

algorithms that are discussed. If time is an issue in your course, se-

lect one of the two initial solution methods and one of the two

nal solution methods to cover in class. The easiest, but not most

efcient, are the northwest corner and stepping-stone rules.

Teaching Suggestion 10.2: Using the Northwest Corner Rule.

This approach is easily understood by students and is appealing to

teach for that very reason. Make sure the students understand the

weakness of the algorithm (that is, it ignores costs totally). Ask

them to come up with their own approaches that could improve on

this. Invariably, a good student will present an approach that

comes very close to VAM. Name the students approach after him

(or her) and tell him he could have been famous if he had devised

it 50 years earlier.

Teaching Suggestion 10.3: Using the Stepping-Stone Method.

Students usually pick up the concept of a closed path and learn to

trace the pluses and minuses fairly quickly. But they run into prob-

lems when they have to cross over an empty cell. Stress that the cities

in the tableau are just in random order, so crossing an unoccupied

box is ne. The big test is Table 10.5. Once students comprehend

this tracing, they are usually ready to move on. Remind students that

there is only one closed path that can be traced for each unused cell.

Teaching Suggestion 10.4: Dummy Rows and Columns.

Another confusing issue to students is whether to add a dummy

row (source) or dummy column (destination) in a transportation

problem. A slow and careful explanation is valuable so that stu-

dents can reach an intuitive understanding as to the correct choice.

Also note that the software adds these dummies automatically.

Teaching Suggestion 10.5: Handling Degeneracy in

Transportation Problems.

Just as a warning, be aware that students are often confused by the

concept of where to place the zero so that the closed paths can be

traced. Carefully explain why you chose or didnt choose a certain

cell. The choice of cell can affect the number of iterations that fol-

low.

Teaching Suggestion 10.6: Facility Location Problems.

These are an important application of the transportation model and

make it easy to compare how a new city will t into an existing

shipping network. It is an application that has intuitive appeal.

Both QM for Windows and Excel QM software are easy to run on

these problems.

Teaching Suggestion 10.7: Sensitivity Analysis on the

Assignment Problem.

This algorithm is easy to use and understand. Tell about solving a

large stafng problem, then discuss the cost implications if one

worker is not available or insists on doing a particular task. It is

easy, with the software, to recompute the answers and conduct a

sensitivity analysis. This is the basis of Problem 10-37.

Teaching Suggestion 10.8: Maximizing Assignment Problems.

This section is needed if students are to solve maximization prob-

lems by hand, but QM for Windows and Excel QM software

negate the need by handling both types of problems. The section

can be skipped if the software is being used.

Teaching Suggestion 10.9: Problem 10-37.

In assigning this challenging aggregate planning problem, you

may wish to rst provide some background information on how to

structure the plan. Remind students that back ordering is not per-

mitted, so very large costs must be inserted in many cells. Note

that Problem 10-23 (Mehta Company) is a warm-up exercise for

this data set problem.

ALTERNATIVE EXAMPLES

Alternative Example 10.1: Let us presume that a product is

made at two of our factories which we wish to ship to three of our

warehouses. We produce 18 at factory A and 22 at factory B; we

want 10 in warehouse 1, 20 in warehouse 2, and 10 in warehouse

3. Per unit transportation costs are A to 1, $4; A to 2, $2; A to 3,

$3; B to 1, $3; B to 2, $2; B to 3, $1. The corresponding trans-

portation table is

10

C H A P T E R

Transportation and Assignment Models

TO

Warehouses

FROM

1 2 3

Total

4 2 3

Factory A 18

3 2 1

Factory B 22

Total 10 20 10 40

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 130

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 131

The northwest corner approach follows:

Let us determine the total cost of transportation with this initial

northwest corner solution. For each lled cell, simply multiply the

number of units being shipped by the unit shipping cost and then

add those transhipment costs. Thus, in the order in which the cells

were lled, we have 10($4) 8($2) 12($2) 10($1) $90.

Using stepping-stone or MODI, we can nd the optimal

solution:

SOLUTION:

Cost 18($2) 10($3) 2($2) 10($1) $80.

Alternative Example 10.2: There is often an imbalance be-

tween the amounts produced and the amounts desired in the ware-

houses. In Alternative Example 10.1, there were 40 units produced

and forty units demanded for warehousing. Let us presume that an

additional 4 units are desired at each warehouse, increasing the

total demand to 14 24 14 52. The supply shortage of 12

units prevents a solution of this problem until we create a dummy

factory that produces a fake 12 units. The cost to ship a false unit

from a dummy factory or to a dummy warehouse is zero. After the

nal optimal solution is computed, the false units and dummy fa-

cilities are ignored. Our new example with a dummy factory and a

northwest corner initial solution would look like this:

Alternative Example 10.3: Here is a production application of

the transportation problem. Set up the following problem in a

transportation format and solve for the minimum-cost plan:

See the bottom of the next page for the solution.

Alternative Example 10.4: As an example of an assignment

problem, let us assume that Susan is a sorority pledge coordinator

with four jobs and only three pledges. Susan decides that the as-

signment problem is appropriate except that she will attempt to

minimize total time instead of money (since the pledges arent

paid). Susan also realizes that she will have to create a ctitious

fourth pledge and she knows that whatever job gets assigned to

that pledge will not be done (this semester, anyhow). She creates

estimates for the respective times and places them in the following

table:

Zingo is, of course, a ctitious pledge, so her times are all zero.

(a) The rst step in this algorithm is to develop the opportu-

nity cost table. This is done by subtracting the smallest num-

ber in each row from every other value in that row, then,

using these newly created gures, by subtracting the smallest

number in each column from every other value in that col-

umn. Whenever these smallest values are zero, the subtrac-

tion results in no change. Susans resulting matrix is

No change was produced when dealing with the columns

since the smallest values were always the zeros from row four.

(b) The next step is to draw lines through all of the zeros.

The lines are to be straight and either horizontal or vertical.

Furthermore, you are to use as few lines as possible. If it re-

quires four of these lines (four because it is a 4 4 matrix),

an optimal assignment is already possible. If it requires fewer

than four lines, another step is required before optimal as-

signments may be made. In our example, draw a line through:

row four, column three, either column one or row three. One

version of the matrix is

TO

Warehouses

FROM

1 2 3

Total

4 2 3

Factory A 10 8 18

3 2 1

Factory B 12 10 22

Total 10 20 10 40

TO

Warehouses

FROM

1 2 3

Total

4 2 3

Factory A 18 18

3 2 1

Factory B 10 2 10 22

Total 10 20 10 40

TO

Warehouses

FROM

1 2 3

Total

4 2 3

Factory A 14 4 18

3 2 1

Factory B 20 2 22

Dummy 0 0 0

Factory C 12 12

Total 14 24 14 52

PERIOD

Feb. Mar. Apr.

Demand 55 70 75

Capacity

Regular 50 50 50

Overtime 5 5 5

Subcontract 12 12 10

Beginning inventory 10

Costs

Regular time $60 per unit

Overtime 80 per unit

Subcontract 90 per unit

Inventory carrying cost $1 per unit per month

Job 1 Job 2 Job 3 Job 4

Barb 4 9 3 8

Cindy 7 8 2 6

Donna 3 4 5 7

Zingo 0 0 0 0

Job 1 Job 2 Job 3 Job 4

Barb 1 6 0 5

Cindy 5 6 0 4

Donna 0 1 2 4

Zingo 0 0 0 0

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 131

REVISED

132 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

(c) Since the number of lines required was less than the

number of assignees, a third step is required (as is normally

the case). Looking at the version of the matrix with the lines

through it, determine the smallest number. Subtract this

smallest number from every number not covered by a line

and add it to every number at the intersection of two lines.

Repeat the lining out process, with the following result:

Which is still not an optimum solution.

(d) Since all of the zeros can be lined out with three lines,

this is still not optimal. Hence, we repeat the step of nding

the smallest uncovered number and both subtracting that

quantity from uncovered numbers and adding it to those

numbers at line intersections. The resultant matrix, after

being lined again, is

Since this matrix requires four lines to cover all zeros, we

have now reached an optimal solution stage.

(e) Although there is more than one sequence in which to

make the assignments, in our example the assignments must

be: Cindy, job 3; Barb, job 1; Donna, job 2; Zingo, job 4.

Since Zingo is a dummy row, the job labeled job 4 does not

get completed. The total time is 10.

Job 1 Job 2 Job 3 Job 4

Barb 1 6 0 5

Cindy 5 6 0 4

Donna 0 1 2 4

Zingo 0 0 0 0

Job 1 Job 2 Job 3 Job 4

Barb 0 5 0 4

Cindy 4 5 0 3

Donna 0 1 3 4

Zingo 0 0 1 0

Job 1 Job 2 Job 3 Job 4

Barb 0 4 0 3

Cindy 4 4 0 2

Donna 0 0 3 3

Zingo 1 0 2 0

Table for Alternative

Example 10-3:

Transportation Solution

Demand for:

Total

Unused Capacity

Capacity Available

Supply from: Feb. Mar. Apr. (Dummy) (Supply)

Beginning 0 1 2 0

inventory 10 10

60 61 62 0

Regular time 45 5 50

80 81 82 0

Overtime 5 5

90 91 92 0

Subcontract 3 9 12

999 60 61 0

Regular time 50 50

999 80 81 0

Overtime 5 5

999 90 91 0

Subcontract 2 10 12

999 999 60 0

Regular time 50 50

999 999 80 0

Overtime 5 5

999 999 90 0

Subcontract 10 10

Demand 55 70 75 9 209

A

p

r

i

l

M

a

r

c

h

F

e

b

r

u

a

r

y

P

e

r

i

o

d

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 132

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 133

SOLUTIONS TO DISCUSSION QUESTIONS

AND PROBLEMS

10-1. The transportation model is an example of decision mak-

ing under certainty where a decision maker knows beforehand

exactly what state of nature will occur (see Chapter 2). In trans-

portation problems, this means that the costs of each shipping

route, the demand at each destination, and the supply at each

source are all known with certainty.

10-2. Vogels approximation method gives a good initial solu-

tion because it makes each allocation on the basis of the opportu-

nity cost, or penalty, that would be incurred if that allocation is not

chosen (see Section 10.6). The northwest corner rule does not take

into account the shipping costs associated with each route alterna-

tive as does VAM. Nevertheless, the northwest corner rule could

provide as low-cost an initial solutionbut only if, by chance, it

turned out that the lowest-cost routes happened to be on the ini-

tially assigned squares.

10-3. A balanced transportation problem is one in which total

demand (from all destinations) is exactly equal to total supply

(from all sources). If a problem is unbalanced, it is necessary to

establish either a dummy source (if demand is greater than supply)

or a dummy destination (if demand is less than supply). Refer to

Section 10.7.

10-4. This would cause two lled cells to become empty simul-

taneously. This means that the solution in the next table will be de-

generate. Placing a 0 in one of these two cells and treating this as a

lled cell can resolve this difculty.

10-5. The total cost will decrease $2 for each unit that is placed

in this empty cell. Since the maximum that can be placed in this

cell is 80 units, the total cost will decrease by 2(80) $160. This

means the total cost for the solution in the next table will be

$900 $160 $740. In general, when moving from one trans-

portation table to the next, the total cost will decrease by the im-

provement index for the cell to be lled times the minimum num-

ber of units in any of the negative cells in the steppingstone path.

10-6. When m n 1 squares (where m number of rows

and n number of columns) are not occupied, the solution is de-

generate. Not enough squares are occupied to allow us to draw a

closed path for all unused squares. Hence we would not be able to

evaluate all of the unused routes. To handle this problem, we se-

lect one empty square, place a zero in it, pretend as if it is occu-

pied, and proceed as in a normal, nondegenerate case. (To bring

the number of allocations to m n 1, it may be necessary to

place a zero in more than one empty square.)

10-7. The enumeration method is not a practical means of solv-

ing 5 5 or 7 7 problems because of the number of possible as-

signments to be considered. In the 5 5 case, 5! ( 5 4 3

2 1) 120 alternatives need to be evaluated. In the 7 7 case,

there are 7! 5,040 alternatives.

10-8. The assignment problem is a special case of the trans-

portation problem and hence can be solved with the approach

shown earlier in this chapter. This is illustrated for the Fix-It Shop

problem. Notice that the column and row requirements will always

be equal to 1.

The northwest corner initial assignment above yields a degenerate

solution (only three squares are lled instead of the required ve).

This will always be a problem when applying the transportation

method to assignment problems. The problem will be degenerate

because there will be only one assignment in a given row or

column.

10-9. It is not necessary to rework the assignment solution.

Changing each entry in the cost table will not result in different

total opportunity cost tables. The optimal cost will, however, be

increased by $25 from $492 to $517 because of the extra $5

charge for each of the ve workers.

10-10. To exclude any unwanted or unacceptable assignment

from occurring, it is necessary only to place a very high articial

cost in the row and column representing that particular assign-

ment. If, for example, all of the relocation costs for Simmonss

rm were in the range $1,000 to $3,000, an articial cost of

$20,000 could be placed on the unwanted assignment. Conversely,

if we were dealing with a maximization problem, a very low rating

would be given to the unacceptable assignment.

10-11. a. Initial solution to modify Executive Furniture Corpo-

ration problem using the northwest corner rule:

Total cost of this initial solution

200($5) 100($4) 100($4) 50($3)

250($5)

1,000 400 400 150 1,250

$3,200

b. To see if this initial solution is optimal, we compute im-

provement indices for each unused square, namely, DC,

EA, FA, and FB:

TO Albu- Factory

FROM querque Boston Cleveland Capacity

5 4 3

Des Moines 200 100 300

8 4 3

Evansville 100 50 150

Fort 9 7 5

Lauderdale 250 250

Warehouse

Requirements 200 200 300 700

TO Project Project Project Personnel

FROM 1 2 3 Available

$11 $14 $6

Adams 1 1

8 10 11

Brown 1 1

9 12 7

Cooper 1 1

Project Needs 1 1 1 3

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 133

REVISED

134 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

DC index path DC to EC to EB to DB

$3 3 4 4 $0

EA index path EA to EB to DB to DA

$8 4 4 5 $3

FA index path FA to FC to EC to EB to DB to DA

$9 5 3 4 4 5 $2

FB index path FB to FC to EC to EB

$7 5 3 4 $1

This solution is optimal, so further steppingstone computations

are not necessary.

c. The improvement index for square DC is zero. This im-

plies the presence of multiple optimal solutions. Practically

speaking, management could close the EC shipping route and

send 50 units on the DC route instead. The table below illus-

trates the overall changes in this alternative optimal solution.

We eliminate the Albuquerque column from consideration be-

cause all 200 units in this column have been allocated. We nd

new opportunity costs based on the remaining rows and columns.

In the next iteration of this process, the opportunity costs are the

same as in the original table.

Total cost of alternative optimal solution

200($5) 50($4) 50($3) 150($4) 250($5)

$3,200

10-12. Using VAM, we nd the opportunity costs by compar-

ing the lowest cost cell in each row (and column) with the second

lowest cost cell in that row (or column). The results are given in

the table below. We avoid the high opportunity cost by putting as

many units as possible in the lowest cost cell for the row or col-

umn with the highest opportunity cost.

When the Ft. Lauderdale row is eliminated from further considera-

tion, we have the opportunity costs shown below. We assign

50 units from Des Moines to Cleveland. Then the only remaining

column is Boston, so the assignments are made where possible.

Evaluating the empty cells indicates that this is the optimal solution

with a cost of $3,200.

10-13. a. Hardrocks initial solution using the northwest corner

rule is shown below.

Cost 40($10) 30($4) 20($5) 30($8) 30($6)

$1,040

Using the stepping-stone method, the following improvement in-

dices are computed:

plant 1project C $11 $4 $5 $8 $4

(closed path: 1-C to 1-B to 2-B to 2-C)

plant 2project A $12 $5 $4 $10 $1

(closed path: 2-A to 2-B to 1-B to 1-A)

plant 3project A $9 $6 $8 $5 $4 $10 $0

(closed path: 3-A to 3-C to 2-C to 2-B to 1-B to 1-A)

plant 3project B $7 $6 $8 $5 $4

(closed path: 3-B to 3-C to 2-C to 2-B)

Since all indices are greater than or equal to zero, this initial solu-

tion provides the optimal transportation schedule, namely, 40 units

TO Albu- Factory

FROM querque Boston Cleveland Capacity

5 4 3

Des Moines 200 50 50 300

8 4 3

Evansville 150 0 150

Fort 9 7 5

Lauderdale 250 250

Warehouse

Requirements 200 200 300 700

TO Albu- Factory

FROM querque Boston Cleveland Capacity

5 4 3

Des Moines 200 300 1

8 4 3

Evansville 150 1

Fort 9 7 5

Lauderdale 250 2

Warehouse

Requirements 200 200 300

TO Albu- Factory

FROM querque Boston Cleveland Capacity

5 4 3

Des Moines 200 300 1

8 4 3

Evansville 150 1

Fort 9 7 5

Lauderdale 250 250 2

Warehouse

Requirements 200 200 300

TO Albu- Factory

FROM querque Boston Cleveland Capacity

5 4 3

Des Moines 200 50 50 300 1

8 4 3

Evansville 150 150 1

Fort 9 7 5

Lauderdale 250 250 -

Warehouse

Requirements 200 200 300

TO Plant

FROM A B C Capacity

10 4 11

1 40 30 70

12 5 8

2 20 30 50

9 7 6

3 30 30

Project

Requirements 40 50 60 150

3 0 0

0 0

0 0

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 134

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 135

TO

FROM A B C Dummy Capacity

10 4 11 0

1 40 30 70

12 5 8 0

2 20 30 50

9 7 6 0

3 30 30 60

Requirements 40 50 60 30 180

from 1 to A, 30 units from 1 to B, 20 units from 2 to B, 30 units

from 2 to C, and 30 units from 3 to C.

b. There is an alternative optimal solution to this problem.

This fact is seen by the index for plant 3project A being

equal to zero. The other optimal solution, should you wish for

students to pursue it, is as follows:

plant 1project A 20 units

plant 1project B 50 units

plant 2project C 50 units

plant 3project A 20 units

plant 3project C 10 units

Total cost remains unchanged at $1,040.

10-14. Hardrocks problem now requires the addition of a

dummy project (destination) because supply exceeds demand. The

northwest corner initial solution is as follows:

Cost of initial solution 40($10) 30($4) 20($5)

30($8) 30($6) 30($0)

$1,040

This is the same initial assignment and cost as that found in Prob-

lem 10-13. This coincidence occurs because the change in plant

capacity is at the lower right-hand corner of the table and is unaf-

fected by the northwest corner rule.

The second table involves bringing the plant 2dummy route

into the solution as follows:

Cost of this iteration $980.

Testing the unused routes:

plant 1project C index $11 8 5 4 $4

plant 1dummy index $0 0 6 8 5 4 $1

plant 2project A index $12 5 4 10 $1

plant 2dummy index $0 0 6 8 $2

plant 3project A index $9 6 8 5 4 10 $0

plant 3project B index $7 6 8 5 $4

TO

FROM A B C Dummy Capacity

10 4 11 0

1 40 30 70

12 5 8 0

2 20 0 30 50

9 7 6 0

3 60 60

Requirements 40 50 60 30 180

best

improvement

index

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 135

REVISED

136 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

Because two squares became zero by opening the plant 2dummy

route, the current solution is degenerate (fewer than 3 rows 4

columns 1 square are occupied). We will need to place an arti-

cial zero in an unused square (such as plant 2project C) to be able

to trace all of the closed paths and evaluate where this solution is

optimal.

We now trace the closed paths for the six unused squares (we

assume that the plant 2project C square has a zero in it). The in-

dices are:

plant 1project C $11 8 5 4 $4

plant 1dummy $0 0 5 4 $1

plant 2project A $12 5 4 10 $1

plant 3project A $9 6 8 5 4 10 $0

plant 3project B $7 6 8 5 $4

plant 3dummy $0 0 8 6 $2

Since all indices are zero or positive, an optimal solution has been

reached. Again, note that the plant 3project A route has an im-

provement index of $0, implying that an alternative optimal solu-

tion exists. The alternative optimal solution, whose total cost is

also $980, is shown in the following table.

10-15. a. Using the northwest corner rule for the Saussy Lum-

ber Company data, the following initial solution is

reached:

TO

FROM A B C Dummy Capacity

10 4 11 0

1 20 50 70

12 5 8 0

2 20 30 50

9 7 6 0

3 20 40 60

Requirements 40 50 60 30 180

TO Customer Customer Customer

FROM 1 2 3 Capacity

3 3 2

Pineville 25 25

4 2 3

Oak Ridge 5 30 5 40

3 2 3

Mapletown 30 30

Demand 30 30 35 95

Initial cost 25($3) 5($4) 30($2) 5($3) 30($3)

$260

b. Applying the stepping-stone method, the improvement

indices are computed:

The improved solution is shown in the following table. Its

cost is $255.

Pinevillecustomer 2 $3 2 4 3 $2

Pinevillecustomer 3 $2 3 4 3 $0

Mapletowncustomer 1 $3 3 3 4

$1

Mapletowncustomer 2 $2 3 3 2 $0

best

improve-

ment

index

TO Customer Customer Customer

FROM 1 2 3 Capacity

3 3 2

Pineville 25 25

4 2 3

Oak Ridge 30 10 40

3 2 3

Mapletown 5 25 30

Demand 30 30 35 95

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 136

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 137

K

1

3 K

2

1 K

3

2

TO Customer Customer Customer

FROM 1 2 3 Capacity

3 3 2

R

1

0 Pineville 0 25 25

4 2 3

R

2

1 Oak Ridge 30 10 40

3 2 3

R

3

0 Mapletown 30 30

Demand 30 30 35 95

R

1

0

R

1

K

1

C

11

0 K

1

3 or K

1

3

R

2

K

1

C

21

R

2

3 4 or R

2

1

R

2

K

2

C

22

1 K

2

2 or K

2

1

R

2

K

3

C

23

1 K

3

3 or K

3

2

R

3

K

3

C

33

R

3

2 3 or R

3

1

Improvement indices are as follows:

Pinevillecustomer 2 I

12

C

12

R

1

K

2

3 0 1 2

Pinevillecustomer 3 I

13

C

13

R

1

K

3

2 0 2 0

Mapletowncustomer 1 I

31

C

31

R

3

K

1

3 1 3 1

Mapletowncustomer 2 I

32

C

32

R

3

K

2

2 1 1 0

The nal solution is also evaluated using MODI below and to the

right.

Calculations of the R

i

s, K

j

s, and improvement indices are

R

1

K

1

C

11

0 K

1

3 or K

1

3

R

3

K

1

C

31

R

3

3 3 or R

3

0

R

1

K

3

C

13

0 K

3

2 or K

3

2

R

2

K

3

C

23

R

2

2 3 or R

2

1

R

2

K

2

C

22

1 K

2

2 or K

2

1

Improvement indices:

Pinevillecustomer 2 I

12

C

12

R

1

K

2

3 0 1 2

Oak Ridgecustomer 1 I

21

C

21

R

2

K

1

4 1 3 0

Mapletowncustomer 2 I

32

C

32

R

3

K

2

2 0 1 1

Mapletowncustomer 3 I

33

C

33

R

3

K

3

3 0 2 1

Final solution with R

i

and K

j

values:

K

1

K

2

K

3

TO Customer Customer Customer

FROM 1 2 3 Capacity

3 3 2

R

1

Pineville 25 25

4 2 3

R

2

Oak Ridge 5 30 5 40

3 2 3

R

3

Mapletown 30 30

Demand 30 30 35 95

Checking improvement indices again, we nd that this improved

solution is still not optimal. The improvement index for the

Pinevillecustomer 3 route $2 3 3 3 $1. Hence

another shift is necessary. The third iteration is shown in the fol-

lowing table:

The cost of this solution is $230. Since two squares went to zero

simultaneously in this last table, the solution has become degener-

ate. However, an examination of improvement indices reveals that

this current solution is optimal.

10-16. Solving the Saussy Lumber Company problem with

MODI, we begin with the same initial solution as found in Prob-

lem 10-15:

TO Customer Customer Customer

FROM 1 2 3 Capacity

3 3 2

Pineville 0 25 25

4 2 3

Oak Ridge 30 10 40

3 2 3

Mapletown 30 0 30

Demand 30 30 35 95

best

improvement

index

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 137

REVISED

138 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

K

1

50 K

2

30 K

3

40 K

4

90

TO Coal Coal

FROM Valley Coaltown Junction Coalsburg Supply

50 30 60 70

R

1

0 Morgantown 30 5 35

20 80 10 90

R

2

50 Youngstown 40 20 60

100 40 80 30

R

3

120 Pittsburgh 5 20 25

Demand 30 45 25 20 120

10-17. Krampf Lines Railway Companys initial northwest cor-

ner solution is shown below.

To test for improvement with MODI, we set up an equation for

each occupied square:

R

1

0

R

1

K

1

50 0 K

1

50 or K

1

50

R

1

K

2

30 0 K

2

30 or K

2

30

R

2

K

2

80 R

2

30 80 or R

2

50

R

2

K

3

10 50 K

3

10 or K

3

40

R

3

K

3

80 R

3

40 80 or R

3

120

R

3

K

4

30 120 K

4

30 or K

4

90

index

13

C

13

R

1

K

3

60 0 (40)

100

index

14

C

14

R

1

K

4

70 0 (90)

160

index

21

C

21

R

2

K

1

20 50 50

80

index

24

C

24

R

2

K

4

90 50 (90)

130

index

31

C

31

R

3

K

1

100 120 50

70

index

32

C

32

R

3

K

2

40 120 30

110

Second Krampf solutioncost 5,500 miles:

best

improvement

index

K

1

50 K

2

30 K

3

40 K

4

20

TO Coal Coal

FROM Valley Coaltown Junction Coalsburg Supply

50 30 60 70

R

1

0 Morgantown 30 5 35

20 80 10 90

R

2

50 Youngstown 35 25 60

100 40 80 30

R

3

10 Pittsburgh 5 20 25

Demand 30 45 25 20 120

Initial solutions total cost

30(50 miles) 5(30 miles) 40(80 miles) 20(10 miles) 5(80 miles) 20(30 miles)

6,050 car-miles

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 138

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 139

TO Factory

FROM Dallas Atlanta Denver Dummy Capacity

8 12 10

Houston 800 50 850

10 14 9

Phoenix 250 200 200 650

11 8 12

Memphis 300 300

Warehouse 800 600 200 200

Requirements

R

1

0

R

1

K

1

50 K

1

50

R

1

K

2

30 K

2

30

R

2

K

2

80 R

2

50

R

2

K

3

10 K

3

40

R

3

K

2

40 R

3

10

R

3

K

4

30 K

4

20

index

13

C

13

R

1

K

3

60 0 (40)

100

index

14

C

14

R

1

K

4

70 0 20

50

index

21

C

21

R

2

K

1

20 50 50

80

index

24

C

24

R

2

K

4

90 50 20

20

index

31

C

31

R

3

K

1

100 10 50

40

index

33

C

33

R

3

K

3

80 10 (40)

110

Third and optimal Krampf solution 3,100 miles:

10-18. A dummy destination (column) is added. Using VAM,

the initial solution is the optimal solution.

In the optimal solution we ship 800 from Houston to Dallas, 50

from Houston to Atlanta, 250 from Phoenix to Atlanta, 200 from

Phoenix to Denver, and 300 from Memphis to Atlanta. The total

cost is $14,700.

10-19. If Vogels Approximation is used, the initial solution is

the optimal solution. This is to ship 120 from Reno to Phoenix, 20

from Denver to Phoenix, 160 from Pittsburgh to Cleveland, and

180 from Denver to Chicago. The total cost is $5,700.

10-20. The problem is unbalanced and a dummy destination

must be added. The optimal solution is to ship 120 from Reno to

Phoenix, 20 from Denver to Phoenix, 160 from Pittsburgh to

TO Coal Coal

FROM Valley Coaltown Junction Coalsburg Supply

50 30 60 70

Morgantown 35 35

20 80 10 90

Youngstown 30 5 25 60

100 40 80 30

Pittsburgh 5 20 25

Demand 30 45 25 20 120

best

improvement

index

Cleveland, and 130 from Denver to Chicago. There will be 30

units left in Denver that are not needed. The total cost is $5,310.

10-21. a. VAM steps are as follows:

1. Assign 30 units to CW (the W column has the

greatest difference, 7) and place Xs in all other

row C squares.

2. Assign 20 units to BX.

3. Assign 10 units to BW.

4. Assign 20 units to AZ.

5. Assign 35 units to AY and 15 units to BY.

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140 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

TO Excess

FROM W X Y Z Supply

12 4 9 5

A X X 35 20 55 4

8 1 6 6

B 10 20 15 X 45 0

1 12 4 7

C 30 X X X 30

Power Demand 40 20 50 20 130

Total VAM cost 35(9) 20(5) 10(8) 20(1)

15(6) 30(1)

635

b. MODI technique to test for optimality:

K

1

11 K

2

4 K

3

9 K

4

5

TO Excess

FROM W X Y Z Supply

12 4 9 5

R

1

0 A 35 20 55

8 1 6 6

R

2

3 B 10 20 15 45

1 12 4 7

R

3

10 C 30 30

Power Demand 40 20 50 20 130

R

1

0

R

1

K

3

9 K

3

9

R

1

K

4

5 K

4

5

R

2

K

3

6 R

2

3

R

2

K

1

8 K

1

11

R

2

K

2

1 K

2

4

R

3

K

1

1 R

3

10

index

11

C

11

R

1

K

1

12 0 11 1

index

12

C

12

R

1

K

2

4 0 4 0

index

24

C

24

R

2

K

4

6 (3) 5 4

index

32

C

32

R

3

K

2

12 (10) 4 18

index

33

C

33

R

3

K

3

4 (10) 9 5

index

34

C

34

R

3

K

4

7 (10) 5 12

Since all improvement indices are zero or positive, this solution

is optimal. An alternative optimal solution, however, is AX 20,

AY 15, AZ 20, BW 10, BY 35, CW 30, cost

$635.

10-22. The initial solution using the northwest corner rule shows

that degeneracy exists. The number of rows plus the number of

columns minus 1 4 3 1 6. But the number of occupied

squares is only 5. Refer to the numbers not circled. To solve the

problem a zero will have to be placed in a square (such as 2C).

This will enable all unused paths to be closed.

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CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 141

TO Hospital Hospital Hospital Hospital

FROM 1 2 3 4 Supply

8 9 11 16

Bank 1 50 50

12 7 5 8

Bank 2 10 70 80

14 10 6 7

Bank 3 30 40 50 120

Demand 90 70 40 50 250

10-23. Using VAM to nd an initial solution, we make the fol-

lowing assignment:

Cost of VAM 50($8) 70($7) 10($5)

assignment 40($14) 30($6) 50($7)

$2,030

Application of the MODI or stepping-stone methods will

yield the following solution in one more iteration. The optimal

cost is $2,020.

TO Hospital Hospital Hospital Hospital

FROM 1 2 3 4 Supply

8 9 11 16

Bank 1 50 X X X 50 1

12 7 5 8

Bank 2 X 70 10 X 80

14 10 6 7

Bank 3 40 X 30 50 120 1

Demand 90 70 40 50 250

The optimal solution to Problem 10-22, through the use of

our computer program, is circled. Cost $1,036.

TO

FROM A B C Supply

72 8 9 4

1 26 15 31 72

38 5 6 8

2 38 38

7 9 6

3 46 34 12 46

5 3 7

4 19 19 19

Demand 110 34 31 175

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142 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

TO Drury Max.

FROM Hill St. Banks St. Park Ave. Lane Avail.

8% 8% 10% 11%

First Homestead $40,000 $40,000 $ 80,000

9% 10% 12% 10%

Commonwealth $60,000 $40,000 $100,000

9% 11% 10% 9%

Washington Federal $90,000 $30,000 $120,000

Loan Needed $60,000 $40,000 $130,000 $70,000 $300,000

10-24. The optimal solution to the Hall Real Estate decision is

shown in the table below.

The total interest cost would be $28,300, or an average rate of

9.43%. An alternative optimal solution exists. It is

First HomesteadHill Street 30,000

First HomesteadBanks Street 40,000

First HomesteadPark Avenue 10,000

CommonwealthHill Street 30,000

CommonwealthDrury Lane 70,000

Washington FederalPark Avenue 120,000

10-25. Mehtas production smoothing problem is a good exer-

cise in the formulation of transportation problems and applying

them to real-world issues. The problem may be set up as in the

table on the top of the next page. All squares with Xs represent

nonfeasible (backorder) solutions. In applying a computer pro-

gram to solve such a problem, a very large cost (say about $5,000)

would be assigned to each of these squares. This would assure that

they would not appear in the nal solution. The dummy destina-

tion (month) is added to balance the problem.

The initial solution has a cost of $65,700.

The costs for the beginning inventory in months 1, 2, 3, and 4

could be 0, 10, 20, and 30 respectively if the carrying cost for the

beginning inventory has already been considered. The solution is

the same but the cost would be $65,300.

10-26. To determine which new plant will yield the lowest cost

for Ashley in combination with the existing plants, we need to

solve two transportation problems. We begin by setting up a trans-

portation table that represents the opening of the third plant in

New Orleans (see the table). The northwest corner method is used

to provide an initial solution. The total cost of this rst solution is

seen to be $23,600. You should note that the cost of each individ-

ual plant to distribution center route is found by adding the

distribution costs to the respective unit production costs. Thus

the total production plus shipping cost of one auto top carrier

from Atlanta to Los Angeles is $14 ($8 for shipping plus $6 for

production).

Table for Problem 10-26

Total cost (600 units $14) (200 units $9)

(700 units $12) (500 units $10)

$8,400 $1,800 $8,400 $5,000

$23,600

Is this initial solution optimal? We once again employ the step-

ping-stone method to test it and to compute improvement indices

for unused routes.

Improvement index for Atlanta to New York route:

$11 (Atlanta to New York)

$14 (Atlanta to Los Angeles)

$9 (Tulsa to Los Angeles)

$12 (Tulsa to New York)

$6

TO Production

FROM Los Angeles New York Capacity

$14 $11

Atlanta 600 600

$9 $12

Tulsa 200 700 900

$9 $10

New Orleans 500 500

Demand 800 1,200 2,000

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 142

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CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 143

10-26 (continued)

Improvement index for New Orleans to Los Angeles route:

$9 (New Orleans to Los Angeles)

$10 (New Orleans to New York)

$12 (Tulsa to New York)

$9 (Tulsa to Los Angeles)

$2

Since the rm can save $6 for every unit it ships from Atlanta to

New York, it will want to improve the initial solution and send as

many as possible (600 in this case) on this currently unused route.

You may want to conrm that the total cost is now $20,000, a

savings of $3,600 over the initial solution.

Again, we must test the two unused routes to see if their im-

provement indices are negative numbers.

index for Atlanta to Los Angeles

$14 $11 $12 $9 $6

index for New Orleans to Los Angeles

$9 $10 $12 $9 $2

Since both indices are greater than zero, we have reached an opti-

mal solution. If Ashley selects to open the New Orleans plant, the

rms total distribution system cost will be $20,000. If the Houston

plant site is chosen, the initial solution is as follows:

Total cost of initial solution

$8,400 $1,800 $8,400 $4,500

$23,100

Improvement index for Atlanta to New York

$11 $14 $9 $12

$6

Table for Problem 10-25

Destination (Month)

Sources 1 2 3 4 Dummy Capacity

10 20 30 40 0

Beginning inventory 40 40

100 110 120 130 0

Regular prod. (month 1) 80 20 100

130 140 150 160 0

Overtime (month 1) 50 50

100 110 120 0

Regular prod. (month 2) 90 10 100

130 140 150 0

Overtime (month 2) 50 50

100 110 0

Regular prod. (month 3) 100 100

130 140 0

Overtime (month 3) 50 50

100 0

Regular prod. (month 4) 100 100

130 0

Overtime (month 4) 50 50

150 150 150 150 0

Outside purchases 30 420 450

Demand 120 160 240 100 470 1,090

TO Production

FROM Los Angeles New York Capacity

$14 $11

Atlanta 600 600

$9 $12

Tulsa 800 100 900

$9 $10

New Orleans 500 500

Demand 800 1,200 2,000

TO Production

FROM Los Angeles New York Capacity

$14 $11

Atlanta 600 600

$9 $12

Tulsa 200 700 900

$7 $9

Houston 500 500

Demand 800 1,200 2,000

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 143

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144 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

Improvement index for Houston to Los Angeles

$7 $9 $12 $9

$1

The improved solution by opening Atlanta to New York

route is shown below.

Total cost of improved solution $19,500.

Improvement indices for Atlanta to New York and Houston

to Los Angeles routes are both positive at this point. Hence an op-

timal solution has been reached. Upon comparing total costs for

the Houston option ($19,500) to those for the New Orleans option

($20,000), we would recommend to Ashley that all factors being

equal, the Houston site should be selected.

10-27. Considering Fontainebleau, we have

Optimal cost $1,530,000.

Considering Dublin, we have the following initial northwest corner

solution:

TO Production

FROM Los Angeles New York Capacity

$14 $11

Atlanta 600 600

$9 $12

Tulsa 800 100 900

$7 $9

Houston 500 500

Demand 800 1,200 2,000

South Pacic

Canada America Rim Europe Capacity

60 70 75 75

Waterloo 4,000 4,000 8,000

55 55 40 70

Pusan 2,000 2,000

60 50 65 70

Bogota 5,000 5,000

75 80 90 60

Fontainebleau 4,000 5,000 9,000

Market Demand 4,000 5,000 10,000 5,000 24,000

South Pacic

Canada America Rim Europe Capacity

60 70 75 75

Waterloo 4,000 4,000 8,000

55 55 40 70

Pusan 1,000 1,000 2,000

60 50 65 70

Bogota 5,000 5,000

70 75 85 65

Dublin 4,000 5,000 9,000

Market Demand 4,000 5,000 10,000 5,000 24,000

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REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 145

Optimal cost $1,535,000.

There is no difference in the routing of shipments, but the

Fontainebleau location is $5,000 less expensive than the Dublin

location. As a practical matter, changes in exchange rates, subjec-

tive factors, or evaluation of future intangibles may overwhelm

such a small difference in cost.

10-28. Considering East St. Louis, we have:

Initial solutionnorthwest corner rule:

Final solution

Optimal solution:

South Pacic

Canada America Rim Europe Capacity

60 70 75 75

Waterloo 4,000 4,000 8,000

55 55 40 70

Pusan 2,000 2,000

60 50 65 70

Bogota 5,000 5,000

70 75 85 65

Dublin 4,000 5,000 9,000

Market Demand 4,000 5,000 10,000 5,000 24,000

Decatur Minn. Cdale E. St. L. Demand

20 17 21 29

Blue Earth 250 250

25 27 20 30

Ciro 50 150 200

22 25 22 30

Des Moines 50 150 150 350

Capacity 300 200 150 150 800

Decatur Minn. Cdale E. St. L. Demand

20 17 21 29

Blue Earth 50 200 250

25 27 20 30

Ciro 150 50 200

22 25 22 30

Des Moines 250 100 350

Capacity 300 200 150 150 800

Decatur Minn. Cdale St. Louis Demand

20 17 21 27

Blue Earth 250 250

25 27 20 28

Ciro 50 150 200

22 25 22 31

Des Moines 50 150 150 350

Capacity 300 200 150 150 800

Optimal cost using East St. Louis: $17,400.

Considering St. Louis, we have:

Initial solutionnorthwest corner rule:

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146 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

Optimal solution:

Optimal cost using St. Louis: $17,250.

Therefore, St. Louis is $150 per week less expensive than East St.

Louis.

10-29. Considering East St. Louis, we have:

Initial solutionnorthwest corner rule:

Optimal solution:

Optimal cost using East St. Louis: $60,900.

Considering St. Louis, we have:

Initial solutionnorthwest corner rule:

Decatur Minn. Cdale St. Louis Demand

20 17 21 27

Blue Earth 200 50 250

25 27 20 28

Ciro 100 100 200

22 25 22 31

Des Moines 300 50 350

Capacity 300 200 150 150

Decatur Minn. Cdale E. St. L. Demand

70 77 91 69

Blue Earth 250 250

75 87 90 70

Ciro 50 150 200

72 85 92 70

Des Moines 50 150 150 350

Capacity 300 200 150 150

Decatur Minn. Cdale E. St. L. Demand

70 77 91 69

Blue Earth 50 200 250

75 87 90 70

Ciro 150 50 200

72 85 92 70

Des Moines 250 100 350

Capacity 300 200 150 150

Decatur Minn. Cdale St. Louis Demand

70 77 91 77

Blue Earth 250 250

75 87 90 78

Ciro 50 150 200

72 85 92 81

Des Moines 50 150 150 350

Capacity 300 200 150 150

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CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 147

Optimal solution:

Optimal cost using St. Louis: $62,250.

Therefore, East St. Louis is $1,350 per week less expensive than

St. Louis.

10-30. Step 1row subtraction:

Column subtraction:

Step 2minimum straight lines to cover zeros:

Step 3subtract the smallest uncovered number from all the un-

covered numbersadd it to numbers at intersections of two lines:

Return to step 2cover all zeros:

Assignment can be made:

Job A12 to machine W

Job A15 to machine Z

Job B2 to machine Y

Job B9 to machine X

Time 10 12 12 16 50 hours

10-31. The initial table used for the assignment problem is:

Job 1 Job 2 Job 3 Job 4

Billy 400 90 60 120

Taylor 650 120 90 180

Mark 480 120 80 180

John 500 110 90 150

Solving this using the assignment module in QM for Windows,

the following assignments are made:

BillyJob 1; TaylorJob 2; MarkJob 3; JohnJob 4

The total time is 750 minutes.

10-32. For the prohibited route where no assignment may be

made, a very high cost (10,000 miles) used to prevent anything

from being assigned here. The initial assignment table is:

Kansas City Chicago Detroit Toronto

Seattle 1500 1730 1940 2070

Arlington 460 810 1020 1270

Oakland 1500 1850 2080 10000

Baltimore 960 610 400 330

The optimal solution found using the QM for Windows assign-

ment module is:

The Seattle crew will go to Detroit.

The Arlington crew will go to Kansas City.

The Oakland crew will go to Chicago.

The Baltimore crew will go to Toronto.

The total distance is 4,580 miles.

Decatur Minn. Cdale St. Louis Demand

70 77 91 77

Blue Earth 200 50 250

75 87 90 78

Ciro 100 100 200

72 85 92 81

Des Moines 300 50 350

Capacity 300 200 150 150

MACHINE

JOB W X Y Z

A12 0 4 6 3

A15 0 1 3 0

B2 0 3 3 2

B9 0 2 4 2

MACHINE

JOB W X Y Z

A12 0 2 3 2

A15 1 0 1 0

B2 0 1 0 1

B9 0 0 1 1

MACHINE

JOB W X Y Z

A12 0 3 3 3

A15 0 0 0 0

B2 0 2 0 2

B9 0 1 1 2

MACHINE

JOB W X Y Z

A12 0 3 3 3

A15 0 0 0 0

B2 0 2 0 2

B9 0 1 1 2

MACHINE

JOB W X Y Z

A12 0 2 3 2

A15 1 0 1 0

B2 0 1 0 1

B9 0 0 1 1

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 147

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148 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

10-33. If the total distance is maximized, we assign a very low

cost (miles) to the prohibited route to prevent this assignment. A

cost of 0 is used. The initial table is:

Kansas City Chicago Detroit Toronto

Seattle 1500 1730 1940 2070

Arlington 460 810 1020 1270

Oakland 1500 1850 2080 0

Baltimore 960 610 400 330

With the solution found using QM for Windows, the Seattle crew

will go to Chicago; the Arlington crew will go to Toronto; the

Oakland crew will go to Detroit; the Baltimore crew will go to

Kansas City; and the total distance is 6,040 miles. This maximum

distance is 1,460 miles more than the minimum distance (4,580).

10-34. Because this is a maximization problem, each number is

subtracted from 95. The problem is then solved using the mini-

mization algorithm.

10-35.

10-36. Each rating is subtracted from 27.1 because this is a max-

imization problem.

Assignment Rating

Andersonnance 95

Sweeneyeconomics 75

Williamsstatistics 85

McKinneymanagement 380

Total rating 335

Assignment Rating

Hawkins to cardiology 18

Condriac to urology 32

Bardot to orthopedics 24

Hoolihan to obstetrics 12

Total cost scale 86

Assignment Rating

12 P.M. on A 27.1

23 P.M. on C 17.1

34 P.M. on B 18.5

45 P.M. on independent 12.8

Overall rating 75.5

10-37.

Thus, the optimal solution does not change by adding a fourth

member. Davis is assigned to the dummy (nonexistent project).

This is because Davis is not the relatively least-cost assignment to

any of the rst three projects.

10-38. The following optimal assignments can be made:

10-39. Students should note the large numbers used to block in-

feasible production plans (see Printout 1 on the next

page).

a. The solution yields a cost of $2,591,200. The plan is

shown in Printout 2. There are multiple optimal solutions.

b. Yes, the solution now costs $2,640,500 with 275 per

month in regular time.

c. If overtime rises by $100 per unit to $1,400 per unit,

the cost increases, from part a, to $2,610,100. The pro-

duction plan remains the same as in Printout 2.

If overtime cost is $1,200 per unit, the total cost is

$2,572,100.

Assignment Rating

Adams to project 3 $ 6

Brown to project 2 10

Cooper to project 1 9

Davis to dummy $00

$25

Assignment Cost

Component C53 to plant 6 0.06

Component C81 to plant 3 0.04

Component D5 to plant 4 0.30

Component D44 to plant 5 0.10

Component E2 to plant 2 0.07

Component E35 to plant 8 0.06

Component G99 to plant 1 0.55

Total cost $1.18

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CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 149

Printout 1 for Problem 10-39 (Computer Data Entry. The costs are in $1,000s.)

JAN FEB MARCH APR MAY JUNE JULY AUG Supply

REG 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 235

OT 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2. 20

SUB 1.5 1.6 1.7 1.8 1.9 2. 2.1 2.2 12

REG 10. 1. 1.1 1.2 1.3 1.4 1.5 1.6 255

OT 10. 1.3 1.4 1.5 1.6 1.7 1.8 1.9 24

SUB 10. 1.5 1.6 1.7 1.8 1.9 2. 2.1 15

REG 10. 10. 1. 1.1 1.2 1.3 1.4 1.5 290

OT 10. 10. 1.3 1.4 1.5 1.6 1.7 1.8 26

SUB 10. 10. 1.5 1.6 1.7 1.8 1.9 2. 15

REG 10. 10. 10. 1. 1.1 1.2 1.3 1.4 300

OT 10. 10. 10. 1.3 1.4 1.5 1.6 1.7 24

SUB 10. 10. 10. 1.5 1.6 1.7 1.8 1.9 17

REG 10. 10. 10. 10. 1. 1.1 1.2 1.3 300

OT 10. 10. 10. 10. 1.3 1.4 1.5 1.6 30

SUB 10. 10. 10. 10. 1.5 1.6 1.7 1.8 17

REG 10. 10. 10. 10. 10. 1. 1.1 1.2 290

OT 10. 10. 10. 10. 10. 1.3 1.4 1.5 28

SUB 10. 10. 10. 10. 10. 1.5 1.6 1.7 19

REG 10. 10. 10. 10. 10. 10. 1. 1.1 300

OT 10. 10. 10. 10. 10. 10. 1.3 1.4 30

SUB 10. 10. 10. 10. 10. 10. 1.5 1.6 19

REG 10. 10. 10. 10. 10. 10. 10. 1. 290

OT 10. 10. 10. 10. 10. 10. 10. 1.3 30

SUB 10. 10. 10. 10. 10. 10. 10. 1.5 20

Demand 255. 294. 321. 301. 330. 320. 345. 340.

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 149

REVISED

150 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

10-40. a. Here is the rst schedule using our software.

RT regular time; OT overtime; SUB subcontracting

b. The revised schedule is

Printout 2 for Problem 10-39 (Computer Solution to HAIFA. Multiple Optimal Solutions)

Optimal Solution: 96.0

1 2 3 4 5 6 7 8 9 10

1 0 0 0 0 1 0 0 0 0 0

2 0 0 0 0 0 1 0 0 0 0

3 0 0 0 1 0 0 0 0 0 0

4 0 0 1 0 0 0 0 0 0 0

5 1 0 0 0 0 0 0 0 0 0

6 0 0 0 0 0 0 0 1 0 0

7 0 0 0 0 0 0 0 0 0 1

8 0 0 0 0 0 0 1 0 0 0

9 0 0 0 0 0 0 0 0 1 0

10 0 1 0 0 0 0 0 0 0 0

Optimal Solution: 92.0

1 2 3 4 5 6 7 8 9 10

1 0 0 0 0 1 0 0 0 0 0

2 0 0 0 0 0 1 0 0 0 0

3 0 0 0 0 0 0 1 0 0 0

4 0 0 1 0 0 0 0 0 0 0

5 1 0 0 0 0 0 0 0 0 0

6 0 0 0 0 0 0 0 1 0 0

7 0 0 0 1 0 0 0 0 0 0

8 0 0 0 0 0 0 0 0 0 1

9 0 0 0 0 0 0 0 0 1 0

10 0 1 0 0 0 0 0 0 0 0

Optimal cost JAN FEB MARCH APR MAY JUNE JULY AUG Dummy

$2,591,200

REG 235.

OT 20.

SUB 0. 0. 12.

REG 255.

OT 24.

SUB 15.

REG 290.

OT 26.

SUB 5. 10.

REG 300.

OT 1. 0. 23.

SUB 17.

REG 300.

OT 30.

SUB 17.

REG 290.

OT 28.

SUB 2. 17.

REG 300.

OT 30.

SUB 15. 0. 4.

REG 290.

OT 30.

SUB 20.

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 150

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 151

c. Yes, there is a new schedule:

Optimum Solution: 93.0

1 2 3 4 5 6 7 8 9 10

1 0 0 0 0 1 0 0 0 0 0

2 0 0 0 0 0 1 0 0 0 0

3 0 0 0 0 0 0 1 0 0 0

4 0 0 1 0 0 0 0 0 0 0

5 0 0 0 1 0 0 0 0 0 0

6 0 0 0 0 0 0 0 1 0 0

7 1 0 0 0 0 0 0 0 0 0

8 0 0 0 0 0 0 0 0 0 1

9 0 0 0 0 0 0 0 0 1 0

10 0 1 0 0 0 0 0 0 0 0

2 4 3

TO

FROM A B C Available

4 3 3

W 15 35 0

6 7 6

Y X 50 0

8 2 5

Z X 50 X 50 3

Demand 30 65 40 135

2 4 3

TO

FROM A B C Available

4 3 3

W X 15 20 35 1

6 7 6

Y X 50 0

8 2 5

Z X 50 X 50 3

Demand 30 65 40 135

2 4 3

TO

FROM A B C Available

4 3 3

W X 15 20 35 0

6 7 6

Y 30 X 20 50 0

8 2 5

Z X 50 X 50 3

Demand 30 65 40 135

2 1 2

TO Factory

FROM A B C Availability

4 3 3

W 35 0

6 7 6

Y 50 0

8 2 5

Z X 50 X 50 3

Store Demand 30 65 40 135

SOLUTIONS TO INTERNET HOMEWORK PROBLEMS

10-41. Jessie Cohen Clothing Groups rst VAM assignment

table:

In the initial assignment table above, we see that the Z row has the

greatest difference (3). We assign the minimum possible number

of units (50) to the least-cost route (ZB) in that row.

Second VAM assignment with Bs requirement satised:

This second VAM table (above) indicates that the greatest differ-

ence is now in the B column (4). We may assign up to 15 units to

the WB square without exceeding the demand at store B.

Third VAM assignment with Ws requirement satised:

The third VAM table involves assigning 20 units to the WC

route. This is done because column C has the highest difference

and square WC the lowest cost in that column.

Final assignment for Cohen Clothing Group:

The nal assignment (above) is made by completing the row and

column requirements. This means that 30 units must be assigned

to YA and 20 units to YC.

The total cost of this VAM assignment (15 units $3)

(20 units $3) (30 units $6) (20 units $6) (50

units $2) $505. A quick check using the stepping-stone index

method indicates that this VAM solution is optimal.

10-42.

OFFICE

MAN Omaha Miami Dallas

Jones 800 1,100 1,200

Smith 500 1,600 1,300

Wilson 500 1,000 2,300

Row subtraction

is done next.

OFFICE

MAN Omaha Miami Dallas

Jones 0 300 400

Smith 0 1,100 800

Wilson 0 500 1,800

Column

subtraction

is done next.

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 151

REVISED

152 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

Optimal assignment:

Jones to Dallas

Smith to Omaha

Wilson to Miami

Cost $1,200 $500 $1,000

$2,700

10-43. Original problem:

Optimal assignment:

taxi at post 1 to customer C

taxi at post 2 to customer B

taxi at post 3 to customer A

taxi at post 4 to customer D

Total distance traveled 4 4 6 4 18 miles.

10-44. Original problem:

OFFICE

MAN Omaha Miami Dallas

Jones 0 0 0

Smith 0 800 400

Wilson 0 200 1,400

Cover zeros

with lines next.

OFFICE

MAN Omaha Miami Dallas

Jones 0 0 0

Smith 0 800 400

Wilson 0 200 1,400

Subtract

smallest

number next.

OFFICE

MAN Omaha Miami Dallas

Jones 200 0 0

Smith 0 600 200

Wilson 0 0 1,200

Cover zeros

with lines next.

OFFICE

MAN Omaha Miami Dallas

Jones 200 0 0

Smith 0 600 200

Wilson 0 0 1,200

CUSTOMER

SITE A B C D

1 7 3 4 8

2 5 4 6 5

3 6 7 9 6

4 8 6 7 4

Row

subtraction

is done

next.

CUSTOMER

SITE A B C D

1 4 0 1 5

2 1 0 2 1

3 0 1 3 0

4 4 2 3 0

Column

subtraction

is done next.

CUSTOMER

SITE A B C D

1 4 0 0 5

2 1 0 1 1

3 0 1 2 0

4 4 2 2 0

Cover zeros

with lines.

CUSTOMER

SITE A B C D

1 4 0 0 5

2 1 0 0 1

3 0 1 2 0

4 4 2 2 0

CASE

SQUAD A B C D E

1 14 7 3 7 27

2 20 7 12 6 30

3 10 3 4 5 21

4 8 12 7 12 21

5 13 25 24 26 8

Row sub-

traction

is

done

next.

CASE

SQUAD A B C D E

1 11 4 0 4 24

2 14 1 6 0 24

3 7 0 1 2 18

4 1 5 0 5 14

5 5 17 16 18 0

Column

subtrac-

tion is

done

next.

CASE

SQUAD A B C D E

1 10 4 0 4 24

2 13 1 6 0 24

3 6 0 1 2 18

4 0 5 0 5 14

5 4 17 16 18 0

Cover

zeros

with

lines.

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 152

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 153

Optimal assignment:

squad 1 to case C

squad 2 to case D

squad 3 to case B

squad 4 to case A

squad 5 to case E

Total person-days projected using this assignment 3 6 3

8 8 28 days.

10-45.

10-46. The major difference between the MODI and stepping-

stone methods is in the procedure used to test for optimality. In the

stepping-stone method, we rst draw a closed path for each of the

empty squares to calculate its improvement index. Then, the most

favorable square (i.e., the one with the largest negative index) is

identied. In MODI, however, we rst identify the most favorable

square (by using row and column numbers) and then draw a closed

path (only for that path) to direct us in improving the solution.

10-47. A northeast corner rule would be directly analogous

to the northwest corner rule, but it would simply begin in the

upper right-hand corner instead of the upper left-hand corner. We

see in the table that this initial solution is degenerate because only

four squares (instead of the expected ve) are occupied. The de-

generacy condition, by the way, is just a peculiarity of the Execu-

tive Furniture Corporation data.

SOLUTION TO ANDREWCARTER, INC., CASE

This case presents some of the basic concepts of aggregate plan-

ning by the transportation method. The case involves solving a

rather complex set of transportation problems. Four different con-

gurations of operating plants have to be tested. The solutions, al-

though requiring relatively few iterations to optimality, involve

degeneracy if solved manually. The costs are:

The lowest weekly total cost, operating plants 1 and 3 with 2

closed, is $217,430. This is $3,300 per week ($171,600 per year)

or 1.5% less than the next most economical solution, operating all

three plants. Closing a plant without expanding the capacity of the

remaining plants means unemployment. The optimum solution,

using plants 1 and 3, indicates overtime production of 4,000 units

at plant 1 and 0 overtime at plant 3. The all-plant optima have no

use of overtime and include substantial idle regular time capacity:

11,000 units (55%) in plant 2 and either 5,000 units in plant 1

(19% of capacity) or 5,000 in plant 3 (20% of capacity). The idled

capacity versus unemployment question is an interesting, non-

quantitative aspect of the case and could lead to a discussion of the

forecasts for the housing market and thus the plants product.

The optimum producing and shipping pattern is

There are three alternative optimal producing and shipping pat-

terns, where R.T. regular time, O.T. overtime, and W

warehouse.

Getting the solution manually should not be attempted using

the northwest corner rule. It will take eight tableaux to do the all

plants conguration, with degeneracy appearing in the seventh

tableau; the 1 and 2 conguration takes ve tableaux; and so on.

It is strongly suggested that software be used.

SOLUTION TO OLD OREGON WOOD STORE CASE

1. The assignment algorithm can be utilized to yield the fastest

time to complete a table with each person assigned one task.

Total Total

Variable Fixed Total

Conguration Cost Cost Cost

All plants operating $179,730 $41,000 $220,730

1 and 2 operating, 3 closed 188,930 33,500 222,430

1 and 3 operating, 2 closed 183,430 34,000 217,430

2 and 3 operating, 1 closed 188,360 33,000 221,360

From To (Amount)

Plant 1 (R.T.) W2 (13,000); W4 (14,000)

Plant 3 (R.T.) W1 (5,000); W3 (11,000);

W4 (1,000); W5 (8,000)

Plant 3 (O.T.) W1 (4,000)

CASE

SQUAD A B C D E

1 10 4 0 4 24

2 13 1 6 0 24

3 6 0 1 2 18

4 0 5 0 5 14

5 4 17 16 18 0

Assignment Rating

C53 at plant 1 10 cents

C81 at plant 3 4 cents

D5 at plant 4 30 cents

D44 at plant 2 14 cents

Total manufacturing cost 58 cents

TO Albu- Factory

FROM querque Boston Cleveland Capacity

5 4 3

Des Moines 100 100

8 4 3

Evansville 200 100 300

Fort 9 7 5

Lauderdale 300 300

Warehouse

Requirements 300 200 200 700

Time

Person Job (Minutes)

Tom Preparation 100

Cathy Assembly 70

George Finishing 60

Leon Packaging 210

Total time 240

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 153

REVISED

154 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

2. If Randy is used, the assignment problem becomes unbal-

anced and a dummy job must be added. The optimum assignment

would be

This is a savings of 10 minutes with Cathy becoming the backup.

3. If Cathy is given the preparation task, the solution of the as-

signment with the remaining three workers assigned to the remain-

ing three tasks is

If Cathy is assigned to the nishing task, the optimum assign-

ment is

4. One possibility would be to combine the packaging operation

with nishing. Then, George could build an entire table by himself

(in 230 minutes) and Tom could do preparation (100 minutes),

Randy the assembly (80 minutes), and Leon the nishing and

packaging (90 minutes). This crew could build 4.8 tables in a 480-

minute workday, while George himself could build 2.09 tablesa

total of almost 7 tables per day.

To utilize all ve workers, George and Tom could each build

entire tables, 2.09 and 1.75 per day, respectively. Letting Randy

do preparation (110 minutes), Cathy the assembly (70 minutes),

and Leon the nishing and packaging (90 minutes) allows an addi-

tional 4.36 tables per day for a total of 8.2 per day.

Nine tables per day could be achieved by having Tom pre-

pare and assemble 3 tables, George prepare and nish 3 tables,

Cathy assemble 6 tables, Leon nish 6 tables, and Randy prepare

3 tables and package all 9. George, Cathy, and Randy would each

have 60 minutes per day unutilized and could build 0.6 table hav-

ing George do preparation (80 minutes), Cathy assembly and

packaging (95 minutes), and Randy the nishing (100 minutes).

INTERNET CASE STUDY

Northwest General Hospital

SOLUTION TO CUSTOM VANS, INC. CASE

To determine whether the shipping pattern can be improved and

where the two new plants should be located, the total costs for the

entire transportation system for each combination of plants, as

well as the existing shipping pattern costs, will have to be deter-

mined. In the headings identifying the combination being dis-

cussed, Gary and Fort Wayne will be omitted since they appear in

every possible combination.

Total costs and optimal solutions for each combination are

given on succeeding pages. A summary of the total costs and the

respective systems is listed below:

DetroitMadison $10,200

MadisonRockford $10,550

DetroitRockford $11,400

Since the total cost is lowest in the GaryFort Wayne

DetroitMadison combination ($10,200), the new plants should be

located in Detroit and Madison. This system is also an improve-

ment over the existing pattern, which costs $9,000, on a cost-per-

unit basis.

Status quo: $9,000/450 units $20/unit

Proposed: $10,200/750 units $13.60/unit

Thus the two new plants would denitely be advantageous,

both in satisfying demand and in minimizing transportation costs.

Time

Person Job (Minutes)

George Preparation 80

Tom Assembly 60

Leon Finishing 80

Randy Packaging 210

Total time 230

Time

Person Job (Minutes)

Cathy Preparation 120

Tom Assembly 60

George Finishing 60

Leon Packaging 210

Total time 250

Time

Person Job (Minutes)

George Preparation 80

Tom Assembly 60

Cathy Finishing 100

Leon Packaging 210

Total time 250

Optimal Solution

Source Destination Number of Trays

From: Station 5A To: Wing 5 60

5A 6 80

5A 3 60

3G 1 80

3G 3 90

3G 4 55

1S 4 155

1S 2 120

Optimal Cost: 4,825 minutes

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 154

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 155

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity R

i

10 20 40 25

Gary 200 100 300

20 30 50 15

Fort Wayne 50 100 150

0 0 0 0

Dummy 100 50 50 100 300

Demand 300 100 150 200 750

K

j

Total costs 200(10) 50(30) 100(40) 100(15)

$9,000

The costs for the additional plants are shown below.

Cost Table for Custom Vans, Inc.

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity

Gary 10 20 40 25 300

Existing

Fort Wayne 20 30 50 15 150

Detroit* 26 36 56 1 150

Proposed Madison** 7 2 22 37 150

Rockford 5 10 30 35 150

Forecast Demand 300 100 150 200

*Since a plant at Detroit could purchase a gallon of berglass for $2 less than any other plant, and one Shower-Ric takes 2 gallons

of berglass, a systems approach to transportation warrants that $2(2), $4, be deducted from each price quoted in the case for ship-

ments from Detroit.

**Since a plant at Madison could hire labor for $1 less per hour than the other plants, and one Shower-Ric takes 3 labor hours to

build, $1(3) or $3 should be deducted from each price quoted for shipments from Madison.

The total cost is 300($10) 100($0) 150($0) 150($15)

50($0) $5,250. This is also the optimal solution with no addi-

tional plants. The cost of the existing shipping pattern is $9,000

and is shown below. Thus the existing shipping pattern can be

improved.

Existing Shipping Pattern

10 20 40 15

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity

Gary 300 X X X 300

Fort Wayne X X X 150 150

Dummy X 100 150 50 300

750

Demand 300 100 150 200

750

The optimal solution is:

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 155

REVISED

156 CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS

Improvement indices (MODI method):

G to Milw: 20 20 0 0

G to D: 25 5 0 20

FW to Milw: 30 20 10 0

FW to Minn: 50 40 10 0

D to C: 26 10 (4) 20

D to Milw: 36 20 (4) 20

D to Minn: 56 40 (4) 20

M to C: 7 10 (18) 15

M to D: 37 5 (18) 50

Improvement indices (MODI method):

G to Milw: 20 5 0 15

G to Minn: 40 25 0 15

FW to Milw: 30 5 (10) 35

FW to C: 20 10 (10) 20

FW to Minn: 50 25 (10) 35

M to D: 37 25 (3) 15

R to C: 5 10 5 10 best improvement

(see iteration 2)

R to Minn: 10 5 5 0

R to D: 35 25 5 5

All solutions are positive; solution is optimal as shown:

G to C: 200 units

G to Minn: 100 units

FW to C: 100 units

FW to D: 50 units

D to D: 150 units

M to Milw: 100 units

M to Minn: 50 units

Total cost 200(10) 100(20) 100(2) 100(40)

50(22) 50(15) 150(1) $10,200

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity R

i

10 20 40 25

Gary 200 100 300 0 (10)

20 30 50 15 (5)

Fort Wayne 100 50 150 10 (10)

26 36 56 1

Detroit 150 150 4 (25)

7 2 22 37 (5)

Madison 100 50 150 18 15

Demand 300 100 150 200 750

K

j

10 20 40 5

(3) (18) (13) (14)

10 10

DetroitMadison, Iteration 1 (Vogels Approximation Method)

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity R

i

10 20 40 25

Gary 250 50 300 0 (10)

20 30 50 15

Fort Wayne 150 150 10 (5)

7 2 22 37 (5)

Madison 50 100 0* 150 3 (15)

5 10 30 35

Rockford 150 150 5 (1)

Demand 300 100 150 200 750

K

j

10 5 25 25

(2) (8) (8) (10)

(10)

*0 supplied to avoid degeneracy.

MadisonRockford, Iteration 1 (Vogels Approximation Method)

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 156

REVISED

CHAPTER 10 TRANSPORTATI ON AND ASSI GNMENT MODELS 157

Improvement indices (MODI method):

G to Milw: 20 15 0 5

G to Minn: 40 35 0 5

FW to C: 20 10 (10) 20

FW to Milw: 30 15 (10) 25

FW to Minn: 50 35 (10) 25

M to C: 7 10 (13) 10

M to D: 37 25 (13) 25

R to Milw: 10 15 (5) 0

R to D: 35 25 (5) 15

Improvement indices (MODI method) for Detroit-Rockford:

G to Minn: 40 40 0 0

G to D: 25 5 0 20

FW to Milw: 30 20 10 0

FW to Minn: 50 40 10 0

D to C: 26 10 (4) 20

D to Milw: 36 20 (4) 20

D to Minn: 56 40 (4) 20

R to C: 5 10 (10) 5

R to D: 35 5 (10) 40

Optimal solution:

G to C: 200 units

G to Milw: 100 units

FW to C: 100 units

D to D: 150 units

FW to D: 50 units

R to Minn: 150 units

Total costs 200(10) 100(20) 100(20) 50(15) 150(1)

150(30)

$11,400

Optimal solution:

G to C: 250 units

G to D: 50 units

FW to D: 150 units

M to Milw: 100 units

M to Minn: 50 units

R to C: 50 units

R to Minn: 100 units

Total cost 250(10) 50(5) 100(2) 50(22) 100(30)

50(25) 150(15)

$10,550

10 15 35 25

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity R

i

10 20 40 25

0 Gary 250 50 300 0

20 30 50 15

10 Fort Wayne 150 150 10

7 2 22 37

13 Madison 100 50 150 13

5 10 30 35

5 Rockford 50 100 150 5

Demand 300 100 150 200 750

K

j

10 15 35 25

MadisonRockford, Iteration 2

DetroitRockford (Vogels Approximation Method)

10 30 40 5

SHOP

PLANT Chicago Milwaukee Minneapolis Detroit Capacity R

i

10 20 40 25 (10)

0 Gary 200 100 300 0 (30)

20 30 50 15 (5)

10 Fort Wayne 100 50 150 10 (10)

26 36 56 1

4 Detroit 150 150 4 (25)

5 10 30 35

10 Rockford 0* 150 150 10 (5)

Demand 300 100 150 200 750

K

j

10 20 40 5

(5) (10) (10) (14)

(15) (10)

*0 supplied to avoid degeneracy.

M10_REND6289_10_IM_C10.QXD 5/12/08 11:26 AM Page 157

REVISED

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