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Operations Management - Transportation Problem

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Solve the transportation problem below using the Northwest Corner method, the Intuitive Lowest-Cost method, and the Stepping-Stone method.

Plants Supply Destination Demand
Kansas City 35 Chicago 30
Omaha 50 St. Louis 65
Des Moines 50 Cincinnati 40
Total 135 tons Total 135 tons

Transport cost from Plants to Destinations ($/ton)
Plants Chicago St. Louis Cincinnati
Kansas City $4 $3 $3
Omaha 6 7 6
Des Moines 8 2 5

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Solution Summary

Operations management for transportation problems are analyzed. The lowest-cost method and the stepping-stone method is analyzed.

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Steps to perform the Northwest-Corner Method
1. Start in the upper left hand cell or Northwest Corner of the table and allocate units to shipping routes as follows:
2. Exhaust the supply (factory capacity) for each row before moving down to the next row.
3. Exhaust the warehouse requirements of each column prior to moving to the next column.
4. Verify that all supplies and demands are met.

Applying the Northwest Corner Rule
1. Assign 30 units from the Kansas City to Chicago.
2. Assign 5 units from Kansas City to St. Louis (exhausts Kansas City supply), 50 units from Omaha to St. Louis (exhausts Omaha supply) and 5 units from Des Moines to St. Louis.
3. Assign 40 units from Des Moines to Cincinnati (exhausts Des Moines supply).

Steps to perform the Intuitive Lowest Cost Method
1. Identify the cell with the lowest ...

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