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Minimum Cost QM

The Minimum Cell Cost Method is used to obtain an initial feasible solution for transportation problems. It involves finding the cell with the lowest unit cost and allocating to it as much as possible while adjusting supply and demand. Remaining cells are filled by repeating this process of finding the next lowest cost cell until supply equals demand or only one cell remains. This method considers shipping costs at each step unlike the Northwest Corner Method and thus generally finds a more optimal solution.

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128 views1 page

Minimum Cost QM

The Minimum Cell Cost Method is used to obtain an initial feasible solution for transportation problems. It involves finding the cell with the lowest unit cost and allocating to it as much as possible while adjusting supply and demand. Remaining cells are filled by repeating this process of finding the next lowest cost cell until supply equals demand or only one cell remains. This method considers shipping costs at each step unlike the Northwest Corner Method and thus generally finds a more optimal solution.

Uploaded by

Roxan Bueno Mora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Definition: The Minimum Cell Cost Method or Least Cost Method is another method used to

obtain the initial feasible solution for the transportation problem. Here, the allocation begins with
the cell which has the minimum cost. The lower cost cells are chosen over the higher-cost cell with
the objective to have the least cost of transportation.

There are three steps we need to consider in solving minimum cell cost method.

STEP 1: Find the cell with the smallest unit cost in transportation tableau. Allocate as much as
possible to the selected cell, and adjust the associated amount of supply and demand by subtracting
the allocate amount.

STEP 2: Cross out the row with 0 supply or demand. If both row and column have 0, arbitrarily
out one only.

STEP 3: If exactly one cell is left cross out the cell and stop. Otherwise, go to step 1

For example, using the previous problem for northwest method

Advantages

The Least Cost Method is considered to produce more optimal results than the North-west Corner
because it considers the shipping cost while making the allocation, whereas the North-West corner
method only considers the availability and supply requirement and allocation begin with the
extreme left corner, irrespective of the shipping cost.

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