Republic of the Philippines

BATANGAS STATE UNIVERSITY

COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS AND
INTERNATIONAL HOSPITALITY MANAGEMENT
CITE Building, Pablo Borbon Main 1, Rizal Avenue, Batangas City

Distribution Models:
Transportation Model
Assignment Method

Submitted by:
Group 3 BSA 2103
Punzalan, Christine M.
Alano, Princess Mae
Alido, Joselito Jr.
Andal, Justine Maureen
Gumban, Fatima
Maala, Edsel
Maulion, Andrew
Morales, Don Carl Allen
Noche, Mary Angelle
Panopio, Julie Anne
Saludes, Joel

Submitted to:
Dr. Romer Castillo
(Instructor)
 Transportation Model

Problem:

Rufina Patis Manufacturing, Inc. wants to find the lowest cost of delivery of its products to Ever
Supermarkets. Ever Caloocan needs 500 bottles, Ever Recto needs 700 bottles, and Ever Concepcion
needs 400 bottles.

The owner has three branches located at three different places. Malabon warehouse has 550
bottles, Caloocan warehouse has 625 bottles, and Valenzuela warehouse with 425 bottles. The cost of
transportation from Malabon warehouse to Ever Caloocan, Ever Recto, and Ever Concepcion is ₱0.20,
₱0.40 and ₱0.80, respectively; Caloocan warehouse to Ever Caloocan, Ever Recto, and Ever Concepcion
is ₱0.10, ₱0.20 and ₱0.40,respectively; Valenzuela warehouse to Ever Caloocan, Ever Recto, and Ever
Concepcion is ₱0.30, ₱0.60 and ₱1.00,respectively.

The objective is to design a plan of distribution at a minimum cost.

Let 𝒙𝟏 be the Malabon warehouse Destinations 𝑦1 𝑦2 𝑦3

𝒙𝟐 be the Caloocan warehouse Ever Ever Ever SUPPLY
Sources Caloocan Recto Concepcion
𝒙𝟑 be the Valenzuela warehouse
Malabon
𝒚𝟏 be the Ever Caloocan
warehouse (𝑥1 )
0.20 0.40 0.80 550
𝒚𝟐 be the Ever Recto
Caloocan
𝒚𝟑 be the Ever Concepcion
warehouse (𝑥2 )
0.10 0.20 0.40 625
Valenzuela
0.30 0.60 1.00 425
warehouse (𝑥3 )
1600
DEMAND 500 700 400
1600

𝐌𝐢𝐧𝐢𝐦𝐢𝐳𝐞 𝐂 = 0.20𝑥1 𝑦1 + 0.40𝑥1 𝑦2 + 0.80𝑥1 𝑦3 + 0.10𝑥2 𝑦1 + 0.20𝑥2 𝑦2 + 0.40𝑥2 𝑦3 + 0.30𝑥3 𝑦1

+ 0.60𝑥3 𝑦2 + 1.00𝑥3 𝑦3

𝐒𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨: 𝑥1 𝑦1 + 𝑥1 𝑦2 + 𝑥1 𝑦3 = 550

𝑥2 𝑦1 + 𝑥2 𝑦2 + 𝑥2 𝑦3 = 625

𝑥3 𝑦1 + 𝑥3 𝑦2 + 𝑥3 𝑦3 = 425

𝑥1 𝑦1 + 𝑥2 𝑦1 + 𝑥3 𝑦1 = 500

𝑥1 𝑦2 + 𝑥2 𝑦2 + 𝑥3 𝑦2 = 700

𝑥1 𝑦3 + 𝑥2 𝑦3 + 𝑥3 𝑦3 = 400

𝑥1 𝑦1 , 𝑥1 𝑦2 , 𝑥1 𝑦3 , 𝑥2 𝑦1 , 𝑥2 𝑦2 , 𝑥2 𝑦3 , 𝑥3 𝑦1 , 𝑥3 𝑦2 , 𝑥3 𝑦3 ≥ 0
 NORTHWEST CORNER RULE – STEPPING STONE METHOD

Table 1: Initial Feasible Solution

SUPERMARKETS

𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
WAREHOUSE

𝐱𝟏 500 50
550 Improvement Index:
0.10 0.20 0.40 𝒙𝟏 𝒚𝟑 : 0.80 − 1.00 + 0.60 − 0.40 = 𝟎
𝐱𝟐 625
625 𝒙𝟐 𝒚𝟏 : 0.10 − 0.20 + 0.40 − 0.20 = 𝟎. 𝟏𝟎
𝒙𝟐 𝒚𝟑 : 0.40 − 1.00 + 0.60 − 0.20 = −𝟎. 𝟐𝟎
0.30 0.60 1.00
𝒙𝟑 𝒚𝟏 : 0.30 − 0.20 + 0.40 − 0.60 = −𝟎. 𝟏𝟎
𝐱𝟑 25 400
425

Demand 500 700 400 1600

Transportation Cost: ₱ 660.00

Table 2: Improved Solution

SUPERMARKETS

𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
WAREHOUSE

𝐱𝟏 500 50
550 Improvement Index:
0.10 0.20 0.40 𝒙𝟏 𝒚𝟑 : 0.80 − 0.40 + 0.20 − 0.40 = 𝟎. 𝟐𝟎
𝐱𝟐 225 400
625 𝒙𝟐 𝒚𝟏 : 0.10 − 0.20 + 0.40 − 0.20 = 𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟏 : 0.30 − 0.20 + 0.40 − 0.60 = −𝟎. 𝟏𝟎
0.30 0.60 1.00
𝒙𝟑 𝒚𝟑 : 1.00 − 0.60 + 0.20 − 0.40 = 𝟎. 𝟐𝟎
𝐱𝟑 425
425

Demand 500 700 400 1600

Transportation Cost: ₱ 580.00

 Table 3: Optimum Solution

SUPERMARKETS

𝒚𝟏 𝒚𝟐 𝒚𝟑 Supply
0.20 0.40 0.80
WAREHOUSE

𝐱𝟏
75 475
550 Improvement Index:
𝒙𝟏 𝒚𝟑 : 0.80 − 0.40 + 0.20 − 0.40 = 𝟎. 𝟐𝟎
0.10 0.20 0.40 𝒙𝟐 𝒚𝟏 : 0.10 − 0.20 + 0.40 − 0.20 = 𝟎. 𝟏𝟎
𝐱𝟐 625 𝒙𝟑 𝒚𝟐 : 0.60 − 0.30 + 0.20 − 0.40 = 𝟎. 𝟏𝟎
225 400
𝒙𝟑 𝒚𝟑 : 1.00 − 0.30 + 0.20 − 0.40 + 0.20 −
0.30 0.60 1.00
𝐱𝟑 425 0.40 = 𝟎. 𝟑𝟎
425
Demand 500 700 400 1600

Transportation Cost: ₱ 537.50

DECISION
To minimize the transportation cost which
is ₱ 537.50, Malabon warehouse and Valenzuela
warehouse should transport 75 bottles and 425
bottles, respectively to Ever Caloocan; Malabon
warehouse and Caloocan warehouse should
transport 475 bottles and 225 bottles, respectively
to Ever Recto; and Caloocan warehouse should
transport 400 bottles to Ever Concepcion. With this
schedule, the required demand of supermarkets
and the available supply of warehouses are
considered and satisfied.
 NORTHWEST CORNER RULE – MODI METHOD

Table 1: Initial Feasible Solution

𝐖𝟏 = 𝟎. 𝟐𝟎 𝐖𝟐 = 𝟎. 𝟒𝟎 𝐖𝟑 = 𝟎. 𝟖𝟎
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
𝐕𝟏 = 𝟎
𝐱𝟏 550
500 50
0.10 0.20 0.40
𝐕𝟐 = −𝟎. 𝟐𝟎 𝐱𝟐 625
625
0.30 0.60 1.00
𝐕𝟑 = 𝟎. 𝟐𝟎 𝐱𝟑 425
25 400
Demand 500 700 400 1600
Transportation Cost: ₱ 660.00 Improvement Index:

𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.80 = 𝟎
𝒙𝟐 𝒚𝟏 : 0.10 − (−0.20) − 0.20 = 𝟎. 𝟏𝟎
𝒙𝟐 𝒚𝟑 : 0.40 − (−0.20) − 0.80 = −𝟎. 𝟐𝟎
𝒙𝟑 𝒚𝟏 : 0.30 − 0.20 − 0.20 = −𝟎. 𝟏𝟎

Table 2: Improved Solution

𝐖𝟏 = 𝟎. 𝟐𝟎 𝐖𝟐 = 𝟎. 𝟒𝟎 𝐖𝟑 = 𝟎. 𝟔𝟎
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
𝒙𝟏 550
𝐕𝟏 = 𝟎 500 50
0.10 0.20 0.40
𝐕𝟐 = −𝟎. 𝟐𝟎 𝒙𝟐 625
225 400
0.30 0.60 1.00
𝐕𝟑 = 𝟎. 𝟐𝟎 𝒙𝟑 425
425
Demand 500 700 400 1600

Improvement Index:
Transportation Cost: ₱ 580.00
𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.60 = 𝟎. 𝟐𝟎
𝒙𝟐 𝒚𝟏 : 0.10 − (−0.20) − 0.20 = 𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟏 : 0.30 − 0.20 − 0.20 = −𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟑 : 1.00 − 0.20 − 0.60 = 𝟎. 𝟐𝟎
 Table 3: Optimum Solution

𝐖𝟏 = 𝟎. 𝟐𝟎 𝐖𝟐 = 𝟎. 𝟒𝟎 𝐖𝟑 = 𝟎. 𝟔𝟎

𝒚𝟏 𝒚𝟐 𝒚𝟑 Supply
0.20 0.40 0.80
𝐱𝟏 550
𝐕𝟏 = 𝟎 75 475
0.10 0.20 0.40
𝐕𝟐 = −𝟎. 𝟐𝟎 𝐱𝟐 225 400
625

0.30 0.60 1.00

𝐕𝟑 = 𝟎. 𝟏𝟎 𝐱𝟑 425
425
Demand 500 700 400 1600

Transportation Cost: ₱ 537.50 Improvement Index:

𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.60 = 𝟎. 𝟐𝟎
𝒙𝟐 𝒚𝟏 : 0.10 − (−0.20) − 0.20 = 𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟐 : 0.60 − 0.10 − 0.40 = 𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟑 : 1.00 − 0.10 − 0.60 = 𝟎. 𝟑𝟎

DECISION
To minimize the transportation cost which
is ₱ 537.50, Malabon warehouse and Valenzuela
warehouse should transport 75 bottles and 425
bottles, respectively to Ever Caloocan; Malabon
warehouse and Caloocan warehouse should
transport 475 bottles and 225 bottles, respectively
to Ever Recto; and Caloocan warehouse should
transport 400 bottles to Ever Concepcion. With this
schedule, the required demand of supermarkets
and the available supply of warehouses are
considered and satisfied.
 LEAST COST METHOD – STEPPING STONE METHOD

Table 1: Initial Feasible Solution

SUPERMARKETS

𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
Improvement Index:
WAREHOUSE

𝐱𝟏 550
550

0.10 0.20 0.40 𝒙𝟏 𝒚𝟏 : 0.20 − 0.40 + 0.20 − 0.10 = −𝟎. 𝟏𝟎

𝐱𝟐 625 𝒙𝟏 𝒚𝟑 : 0.80 − 1.00 + 0.60 − 0.40 = 𝟎
500 125 𝒙𝟐 𝒚𝟑 : 0.40 − 1.00 + 0.60 − 0.20 = −𝟎. 𝟐𝟎
0.30 0.60 1.00 𝒙𝟑 𝒚𝟏 : 0.30 − 0.10 + 0.20 − 0.60 = −𝟎. 𝟐𝟎
𝐱𝟑 425
25 400
Demand 500 700 400 1600

Transportation Cost: ₱ 710.00

Table 2: Improved Solution

SUPERMARKETS
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80 Improvement Index:
WAREHOUSE

𝐱𝟏 550
550
𝒙𝟏 𝒚𝟏 : 0.20 − 0.10 + 0.40 − 1.00 + 0.60 −
0.10 0.20 0.40 0.40 = −𝟎. 𝟑𝟎
𝐱𝟐 625 𝒙𝟏 𝒚𝟑 : 0.80 − 1.00 + 0.60 − 0.40 = 𝟎
500 125
𝒙𝟐 𝒚𝟐 : 0.20 − 0.60 + 1.00 − 0.40 = 𝟎. 𝟐𝟎
0.30 0.60 1.00 𝒙𝟑 𝒚𝟏 : 0.30 − 0.10 + 0.40 − 1.00 = −𝟎. 𝟒𝟎
𝐱𝟑 425
150 275
Demand 500 700 400 1600

Transportation Cost: ₱ 685.00

 Table 3: Improved Solution

SUPERMARKETS
𝒚𝟏 𝒚𝟐 𝒚𝟑 Supply
0.20 0.40 0.80
Improvement Index:
WAREHOUSE

𝐱𝟏 550
550

0.10 0.20 0.40 𝐱 𝟏 𝐲 𝟏 : 0.20 − 0.30 + 0.60 − 0.40 = 𝟎. 𝟏𝟎

𝒙𝟏 𝒚𝟑 : 0.80 − 0.40 + 0.10 − 0.30 + 0.60 − 0.40 = 𝟎. 𝟒𝟎
𝐱𝟐 75 150 400
625
𝒙𝟐 𝒚𝟐 : 0.20 − 0.60 + 0.30 − 0.10 = −𝟎. 𝟐𝟎
0.30 0.60 1.00 𝒙𝟑 𝒚𝟑 : 1.00 − 0.30 + 0.10 − 0.40 = 𝟎. 𝟒𝟎
𝐱𝟑 425
425
Demand 500 700 400 1600

Transportation Cost: ₱ 575.00

Table 4: Improved Solution

SUPERMARKETS
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
Improvement Index:
WAREHOUSE

𝐱𝟏 550
550

0.10 0.20 0.40

𝒙𝟏 𝒚𝟏 : 0.20 − 0.10 + 0.20 − 0.40 = −𝟎. 𝟏𝟎
𝒙𝟏 𝒚𝟑 : 0.80 − 0.40 + 0.20 − 0.40 = 𝟎. 𝟐𝟎
𝐱𝟐 75 150 400
625
𝒙𝟑 𝒚𝟐 : 0.60 − 0.30 + 0.10 − 0.20 = 𝟎. 𝟐𝟎
0.30 0.60 1.00 𝒙𝟑 𝒚𝟑 : 1.00 − 0.30 + 0.10 − 0.40 = −𝟎. 𝟒𝟎
𝐱𝟑 425
425
Demand 500 700 400 1600

Transportation Cost: ₱ 545.00

 Table 5: Optimum Solution

SUPERMARKETS

𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80 Improvement Index:
WAREHOUSE

𝐱𝟏 550
75 475
0.10 0.20 0.40
𝒙𝟏 𝒚𝟏 : 0.80 − 0.40 + 0.20 − 0.40 = 𝟎. 𝟐𝟎
𝐱𝟐 625 𝒙𝟐 𝒚𝟏 : 0.10 − 0.20 + 0.40 − 0.20 = 𝟎. 𝟏𝟎
225 400 𝒙𝟑 𝒚𝟐 : 0.60 − 0.30 + 0.20 − 0.40 = 𝟎. 𝟏𝟎
0.30 0.60 1.00 𝒙𝟑 𝒚𝟑 : 1.00 − 0.30 + 0.20 − 0.40 + 0.20 − 0.40 = 𝟎. 𝟑𝟎
𝐱𝟑 425
425
Demand 500 700 400 1600

Transportation Cost: ₱ 537.50

DECISION
To minimize the transportation cost which
is ₱ 537.50, Malabon warehouse and Valenzuela
warehouse should transport 75 bottles and 425
bottles, respectively to Ever Caloocan; Malabon
warehouse and Caloocan warehouse should
transport 475 bottles and 225 bottles, respectively
to Ever Recto; and Caloocan warehouse should
transport 400 bottles to Ever Concepcion. With this
schedule, the required demand of supermarkets
and the available supply of warehouses are
considered and satisfied.
 LEAST COST METHOD – MODI METHOD

Table 1: Initial Feasible Solution

𝐖𝟏 = 𝟎. 𝟑𝟎 𝑾𝟐 = 𝟎. 𝟒𝟎 𝑾𝟑 = 𝟎. 𝟖𝟎
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
𝐱𝟏 550
𝐕𝟏 = 𝟎 550
0.10 0.20 0.40
𝐕𝟐 = −𝟎. 𝟐𝟎 𝐱𝟐 625
500 125
0.30 0.60 1.00
𝐕𝟑 = 𝟎. 𝟐𝟎 𝐱𝟑 425
25 400
Demand 500 700 400 1600

Improvement Index:
Transportation Cost: ₱ 710.00
𝒙𝟏 𝒚𝟏 : 0.20 − 0 − 0.30 = −𝟎. 𝟏𝟎
𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.80 = 𝟎
𝒙𝟐 𝒚𝟑 : 0.40 − (−0.20) − 0.80 = −𝟎. 𝟐𝟎
𝒙𝟑 𝒚𝟏 : 0.30 − 0.20 − 0.30 = −𝟎. 𝟐𝟎

Table 2: Improved Solution

𝐖𝟏 = 𝟎. 𝟓𝟎 𝐖𝟐 = 𝟎. 𝟒𝟎 𝐖𝟑 = 𝟎. 𝟖𝟎
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
𝒙𝟏 550
𝑽𝟏 = 𝟎 550
0.10 0.20 0.40
𝑽𝟐 = −𝟎. 𝟒𝟎 𝒙𝟐 625
500 125
0.30 0.60 1.00
𝑽𝟑 = 𝟎. 𝟐𝟎 𝒙𝟑 425
150 275
Demand 500 700 400 1600

Improvement Index:
Transportation Cost: ₱ 685.00
𝒙𝟏 𝒚𝟏 : 0.20 − 0 − 0.50 = −𝟎. 𝟑𝟎
𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.80 = 𝟎
𝒙𝟐 𝒚𝟐 : 0.20 − (0 − 0.40) − 0.40 = 𝟎. 𝟐𝟎
𝒙𝟑 𝒚𝟏 : 0.30 − 0.20 − 0.50 = −𝟎. 𝟒𝟎
 Table 3: Improved Solution

𝐖𝟏 = 𝟎. 𝟏𝟎 𝐖𝟐 = 𝟎. 𝟒𝟎 𝐖𝟑 = 𝟎. 𝟒𝟎
𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
𝐱𝟏 550
𝐕𝟏 = 𝟎 550
0.10 0.20 0.40
𝐕𝟐 = 𝟎 𝐱𝟐 625
225 400

0.30 0.60 1.00

𝐕𝟑 = 𝟎. 𝟐𝟎 𝐱𝟑 425
275 150
Demand 500 700 400 1600

Transportation Cost: ₱ 575.00 Improvement Index:

𝒙𝟏 𝒚𝟏 : 0.20 − 0 − 0.10 = 𝟎. 𝟏𝟎
𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.40 = 𝟎. 𝟒𝟎
𝒙𝟐 𝒚𝟐 : 0.20 − 0 − 0.40 = −𝟎. 𝟐𝟎
𝒙𝟑 𝒚𝟑 : 1.00 − 0.20 + 0.40 = 𝟎. 𝟒𝟎

Table 4: Improved Solution

𝑾𝟏 = 𝟎. 𝟑𝟎 𝑾𝟐 = 𝟎. 𝟒𝟎 𝑾𝟑 = 𝟎. 𝟔𝟎
𝒚𝟏 𝒚𝟐 𝒚𝟑 Supply
0.20 0.40 0.80
𝒙𝟏 550
𝑽𝟏 = 𝟎 550
0.10 0.20 0.40
𝑽𝟐 = −𝟎. 𝟐𝟎 𝒙𝟐 625
75 150 400

0.30 0.60 1.00

𝑽𝟑 = 𝟎 𝒙𝟑 425
425
Demand 500 700 400 1600

Improvement Index:
Transportation Cost: ₱ 545.00

Number of used cells = 𝟔 − 𝟏 𝒙𝟏 𝒚𝟏 : 0.20 − 0 − 0.30 = −𝟎. 𝟏𝟎

𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.60 = 𝟎. 𝟐𝟎
𝟓=𝟓 𝒙𝟑 𝒚𝟐 : 0.60 − 0 − 0.40 = 𝟎. 𝟐𝟎
𝒙𝟑 𝒚𝟑 : 1.00 − 0 − 0.60 = −𝟎. 𝟒𝟎
 Table 5: Optimum Solution

𝑾𝟏 = 𝟎. 𝟐𝟎 𝑾𝟐 = 𝟎. 𝟒𝟎 𝑾𝟑 = 𝟎. 𝟔𝟎

𝐲𝟏 𝐲𝟐 𝐲𝟑 Supply
0.20 0.40 0.80
𝐱𝟏 550
𝑽𝟏 = 𝟎 75 475
0.10 0.20 0.40
𝑽𝟐 = −𝟎. 𝟐𝟎 𝐱𝟐 625
225 400
0.30 0.60 1.00
𝑽𝟑 = 𝟎. 𝟏𝟎 𝐱𝟑 425
425
Demand 500 700 400 1600

Improvement Index:
Transportation Cost: ₱ 537.50
𝒙𝟏 𝒚𝟑 : 0.80 − 0 − 0.60 = 𝟎. 𝟐𝟎
𝒙𝟐 𝒚𝟏 : 0.10 − (−0.20) − 0.20 = 𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟐 : 0.60 − 0.10 − 0.40 = 𝟎. 𝟏𝟎
𝒙𝟑 𝒚𝟑 : 1.00 − 0.10 − 0.60 = 𝟎. 𝟑𝟎

DECISION
To minimize the transportation cost which
is ₱ 537.50, Malabon warehouse and Valenzuela
warehouse should transport 75 bottles and 425
bottles, respectively to Ever Caloocan; Malabon
warehouse and Caloocan warehouse should
transport 475 bottles and 225 bottles, respectively
to Ever Recto; and Caloocan warehouse should
transport 400 bottles to Ever Concepcion. With this
schedule, the required demand of supermarkets
and the available supply of warehouses are
considered and satisfied.
 VOGEL’S APPROXIMATION METHOD

Table 1: Initial Feasible Solution

SUPERMARKETS
𝒚𝟏 𝒚𝟐 𝒚𝟑 Supply Column Difference
0.20 0.40 0.80
WAREHOUSE

𝒙𝟏 550 0.2 0.2 0.2 0.4 -

75 475
0.10 0.20 0.40
𝒙𝟐 625 0.1 0.1 0.1 0.1 0.1
225 400
0.30 0.60 1.00
𝒙𝟑 425 0.3 0.3 - - -
425
Demand 500 700 400 1600
0.1 0.2 0.4
DIFFERENCES

0.1 0.2 -
ROW

0.1 0.2 -
- 0.2 -
- 0.2

Transportation Cost: ₱ 537.50

DECISION
To minimize the transportation cost which
is ₱ 537.50, Malabon warehouse and Valenzuela
warehouse should transport 75 bottles and 425
bottles, respectively to Ever Caloocan; Malabon
warehouse and Caloocan warehouse should
transport 475 bottles and 225 bottles, respectively
to Ever Recto; and Caloocan warehouse should
transport 400 bottles to Ever Concepcion. With this
schedule, the required demand of supermarkets
and the available supply of warehouses are
considered and satisfied.
 ASSIGNMENT PROBLEM

Problem:

A Financing Corporation headquartered in Makati wants to assign three personnel, Mel,

Ben, and Fred to their regional offices. The following table shows the cost of relocation for each
of these three personnel to the company’s three regional offices.

Personnel Pampanga Bataan Bulacan

Mel ₱ 21 000 ₱ 22 000 ₱18 000
Ben 25 000 23 000 15 000
Fred 20 000 33 000 15 000

Find the assignment of personnel to the regional offices that will give the least cost to the
company.

Let A = Mel X = Pampanga

B = Ben Y = Bataan
C = Fred Z = Bulacan

Table 1:
COST INFORMATION
Location
X Y Z Row Reducer
Personnel
A ₱ 21 000 ₱ 22 000 18 000 18 000
B 25 000 23 000 15 000 15 000
C 20 000 33 000 15 000 15 000

The smallest cost per row:

Table 2:
Personnel Opportunity Table
Location
X Y Z
Personnel
A 3 000 4 000 0
B 10 000 8 000 0
C 5 000 18 000 0

Column Reducer 3 000 4 000 0

 Table 3:
Location Opportunity Table
Location
X Y Z
Personnel
A 0 0 0 Line 2
B 7 000 4 000 0
C 2 000 14 000 0
Line 1
The smallest cost = 2 000

X Y Z
0 0 0 + 2 000 = 2 000
7 000 – 2 000 =5000 4 000 – 2000 = 2000 0
2 000 – 2000 = 0 14 000 – 2000 = 12 000 0

Number of Row/Column = No. of Assignments

3≠2

Table 4:
Optimal Solution
Location
X Y Z
Personnel
A 0 0 2 000 Line 3
B 5 000 2 000 0
C 0 12 000 0
Line 2 Line 1

Number of Row/Column = No. of Assignments

3=3

Optimal Solution
 Decision:
Assigned Cost
A=Y Mel to Bataan ₱ 22 000
B=Z Ben to Bulacan 15 000
C=X Fred to Pampanga 20 000
₱ 57 000

In order to minimize cost, Mel should be assigned to Bataan, Ben to Bulacan, and
Fred to Pampanga. In total, this assignment would cost ₱ 57 000.