quantitative methods of business decisions chapter 5 part 3

School of Business
Department of Management Information Systems
BMIS355: Quantitative Methods of Business Decisions

Chapter 5 | Part 3


Transportation Model & It’s Variants

Spring 2020 - 2021

BMIS355- CHAPTER 5

, Outline
I. Definition of the transportation problem.
II. Balancing the transportation Model:
A. Balanced Transportation Model.
B. Un-Balanced Transportation Model.

III. The Transportation Algorithm:
I. Determination of the starting basic feasible solution
◦ Northwest Corner Method (Initial Transportation Cost)
II. Iterative computations of the Transportation Algorithm
1. Determine the “Entering Variable”.
2. Determine the “Leaving Variable”




BMIS355- CHAPTER 5

, Transportation Model & Its Variants
Total cost of Transportation:
D1 D2 D3 D4 Supply TC = ∑𝑋𝑖𝑗. 𝐶𝑖𝑗.
4 6 8 20
S1 0
10 5 Basic Variable Cost per unit (𝑪𝒊𝒋 )
10 15 7 10
S2 0 (𝒙𝒊𝒋 )
10 𝒙𝟏𝟏 = 𝟏𝟎 4
3 4 13 1 𝒙𝟏𝟐 = 𝟓 6
S3 0
5 20 𝒙𝟐𝟐 = 𝟏𝟎 15
S4
2 14 4 15
0
𝒙𝟑𝟐 = 𝟓 4
5 10 𝒙𝟑𝟑 = 𝟐𝟎 13
31 10 5 20
S5 0 𝒙𝟒𝟑 = 𝟓 4
5 𝒙𝟒𝟒 = 𝟏𝟎 15
Demand 0 0 0 0 70 𝒙𝟓𝟒 = 𝟓 20
Total transportation cost


BMIS355- CHAPTER 5