Transportation Problem

1. A company wishes to transport goods from three supply points to four demand points. The per unit costs, supply point capacities and demand point requirements are: Demand 1 Demand 2 Demand 3 Demand 4 Total capacity Supply 1 63 + a 68 150 Supply 2 63 + b E3 f2 + c 180 + d Supply 3 E3 E6 100+ e Total Demand 90 95 80 105 Where: a = 2, b = 0, c = 2, d = 8 and e = 9. a) Formulate this problem algebraically as a balanced transportation problem to minimise the total cost. b) Give the tabular form of your resulting balanced transportation model and find a basic feasible solution using the North-West Corner method. Give possible advantages and disadvantages of the North-West Corner method. c) Use the transportation simplex method, starting from your solution in b), to find an optimal solution. d) From your findings, make recommendations, in non-technical language, to the company with regards to what they should do. You should include possible disadvantages as well as advantages of using the solution you have found in c)