Minimizing the Cost of Transportation

Read this article. The study employed a transportation model to find the minimum cost of transporting manufactured goods from factories to warehouses. As you read, think of some factors that can greatly increase transportation and logistics time.

Data Analysis

Optimality Test for North-west Corner Method

The stepping stone method was used, evaluating the empty cells (unallocated cells) and reallocating the cell with the highest negative. And there was a decrease on the total cost of distribution, however the optimality test still indicate that there is a need for further improvement, and thus we proceed to the second iteration.

Similarly, the same sequence procedures and test were carried out after the second iteration and there were more decrease on the total cost of distribution in comparison to the first iteration, but the test of optimality still signifies that there is more better solution to be found despite the fact that there was a decrease in the total cost of distribution.

Where, Min Z = 2,245,000

Therefore we proceed to third iteration as given in the table 8 below.

Table 8. Third Iteration

Table 8 shows that the optimal solution is being reached and there will be no need for further improvement again and the total cost of distribution was low in comparison to the previous iterations.

Where Min Z = 1,972,000.