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BUSINESS ANALYTICS MODULE C TR A N S P O R T A T I O N MO D E L S 317
* Indicates that improvements can be made. The greatest improve-
ment can be made by using route A3, which has an improvement
index of −9. A total of 50 units can be moved along this new route.
C.13* (cont.)
Copyright ©2017 Pearson Education, Inc.
+ $31,160 = $116,160
C.16*
C.17* (a) Transportation table with dummy plant, initial solution
by Northwest Corner:
Total intial cost = $2,950.
(b) Stepping-stone method:
*
YB: 7 5 6 8 0
DA: 0 10 6 0 4
DB: 0 5 6 0 1
+ − + − =
+ − + − = −
+ − + − = +
most we can move around this route is 50 units.
BUSINESS ANALYTICS MODULE C TR A N S P O R T A T I O N MO D E L S 319
Using route DA, we get
This solution is degenerate. To test for optimality, place
320 BUSINESS ANALYTICS MODULE C TR A N S P O R T A T I O N MO D E L S
Considering Dublin, we have:
BUSINESS ANALYTICS MODULE C TR A N S P O R T A T I O N MO D E L S 321
CASE STUDY
CUSTOM VANS, INC.
Where would you locate the two plants, and why?
To determine whether the shipping pattern can be improved and
where the two new plants should be located, the total costs for the
whole transportation system for each combination of plants as well
Because the total cost is lowest in the Gary–Fort Wayne–Detroit–
in terms of demand and in minimizing transportation costs.
(a) Existing pattern:
Initial solution—Northwest-corner rule:
BUSINESS ANALYTICS MODULE C TR A N S P O R T A T I O N MO D E L S 323
Optimal solution:
(d) Considering Detroit and Rockford:
Initial solution—Northwest-corner rule:
Optimal solution:
Total cost = 200 10 + 100 20 + 100 + 50 15 + 150 1
+ 150 30 = $11,400
