QUESTION TWO

A company has four manufacturing plants and five warehouses. Each plant manufactures the same

product, which is sold at different prices at 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. These data are given in the following table:

The company has five warehouses. The sale prices, transportation costs and demands are given

in the following table:

$($i$)$ Formulate this into a transportation problem to maximize profit

$($ii$)$ Find the solution using VAM method

$($iii$)$ Test for optimality and find the optimal solution.