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Practice Questions II (Transportation Problem)

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164 views4 pages

Practice Questions II (Transportation Problem)

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hardishah1004
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment/Practice Problems II (Transportation Problem)

Question 1: A cement company has three factories which manufactures cement which
is then transported to four distribution centres. The quantity of monthly production
of each factory, the demand and associated transported cost per quintal is as follows:

W X Y Z Supply

A 10 8 5 4 7000

B 7 9 15 8 8000

C 6 10 14 8 10000

Demand 6000 6000 8000 5000

(a) Suggest the optimal allocation.


(b) Is there any other transportation schedule which is equally attractive? If yes, write
that
(c) If the company wants at least 5000 quintals of cement to be transported from factory
C to distribution centre Y, will the transportation schedule be any different? If so, what
will be the new optimal schedule and the effect on cost.
(d) Suppose the company desires to send at most 500 quintals of cement from factory
C to distribution centre Y, what will be the optimal schedule be? Also, obtain the total
transportation cost in such case.
(e) The monthly production at factory C and the monthly demand at
distribution centre X increases by 1000 quintals each. What effect will it have on the
optimal solution and on total cost?

Question 2: Find Solution using VAM, and also find optimal solution using Modi
method:

P Q R S Supply

A 6 11 9 8 200

B 13 10 8 15 300

C 9 9 14 12 500

D 12 10 12 10 100

Demand 350 250 300 200

(a) If the transporter agrees to reduce the chargers on the route B-S by 40%, how will
it affect the optimal solution.
(b) It is decided to send a total of 150 units on the routes A-P. How it will affect the
optimal solution.
(c) Trace the effect of sending 100 units on the route C-S.

Question 3: In an unbalanced transportation problem, sometimes there are penalties


for unsatisfied demand, to reflect the failure of the supplier to meet the required
demand. Consider the problem

D1 D2 D3 Supply

S1 1 5 6 90

S2 3 2 3 10

S3 2 6 1 20

Demand 60 50 50

Let the penalty costs per unit of unsatisfied demand be 6, 4 and 2 respectively for
destinations D1, D2 and D3. Find an optimal solution of the given (TP).

Question 4: A company wishes to determine an investment strategy for each of the


next four years, five investment types have been selected, investment capital has been
allocated for each of the coming four years and maximum investment levels have been
established for each investment type. An assumption is that amounts invested in any
year will remain invested until the end of the planning horizon of four years. The
following table summarises the data for this problem. The values in the body of the
table represent net return on investment of Rs. 1 to the end of the planning horizon.
For example, a rupee invested in investment type B at the beginning of first year will
grow to Rs. 1.90 by the end of the fourth year, yielding a net return of Rs. 0.90.

Investment made at Investment Type Rupees available


The beginning of year A B C D E (in ‘000)

1 0.80 0.90 0.60 0.75 1.00 500

2 0.55 0.65 0.40 0.60 0.50 600

3 0.30 0.25 0.30 0.50 0.20 750

4 0.15 0.12 0.25 0.35 0.10 800

Maximum rupee investment


750 600 500 800 1000
(‘000)

The objective in this problem is to determine the amount to be invested in the


beginning of each year in an investment type so as to maximize the net rupee return
for the four-year period. Solve the above transportation type problem and get an
optimal schedule. Also calculate the net return on investment for the planning horizon
of four-year period.

Question 5: Stronghold Construction Company is interested in taking loans from


banks for some of its projects: P, Q, R, S, T. The rates of interest and the lending
capacity differ from bank to bank: All these protects dire 10 be completed. The relevant
details are provided in the following table. Assuming the role of a consultant, advise
this company as to how it should take the loans so that the total interest payable will
be the least. Are there alternate optimum solutions? If so, indicate one such solution.

Interest rate in percentage for project


Bank Max. credit (in ‘000)
P Q R S T

Pvt. Bank 20 18 18 17 17 Any amount

Nationalised 16 16 16 15 16 400

Co-operative Bank 15 15 15 13 14 250

Amount required
200 150 200 125 75
(‘000)

Question 5: A company has four manufacturing plants and five warehouses. Each
plant manufactures the same product, which is sold at different prices in each
warehouse area. The cost of manufacturing and cost of raw materials are different in
each plant due to various factors. The capacities of the plants are also different. The
relevant data is given in the following table:

The company has five warehouses. The sale prices, transportation costs and demands
are given in the following table:
(a) Formulate this problem as a transportation problem in order to maximize profit.
(b) Find the solution using VAM method.
(c) Test for optimality and find the optimal solution.

[Hint: Find profit using: Profit = Sales price – Production cost – Raw material cost –
Transportation cost]

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