TRANSPORTATION PROBLEMS: EXERCISES

Vassilis Kostoglou

E-mail: vkostogl@it.teithe.gr
URL: www.it.teithe.gr/~vkostogl

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 1
A factory producing aluminum is supplied with bauxite from three mines (01, 02 and 03)
which produce 3, 7 and 5 thousand tones of mineral per week respectively. There are 4
modes of transportation of bauxite to the factory: by ship (T1) - by trucks (T2) - by a
simple railway wagon (T3) - by special railway wagons (T4). The total capacity per day
is 4 thousand tones for ships, 3 thousand for cars and 4 thousands each one of
the two types of rail. Transportation costs per tone are given in the following table.

Vehicles
Τ1 Τ2 Τ3 Τ4
Mines
01 2 2 2 1
02 10 8 5 4
03 7 6 6 8

Identify the quantities that must be transported by any means of transportation so as to

minimize the total transportation cost.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 2
One of the main products of P & T Company, a large canning industry is canned beans.
There are three canneries which send products to four distribution centers. Since
transportation costs are particularly increased due to large distances, the administration
decided to reduce it. There have been some estimates of the quantity production and
transportation to distribution centers and as for the transportation costs of each load
(fully loaded truck company) it is denominated in U.S. dollars.

Distribution
centers
1 2 3 4
1 464 513 654 867 75
Canneries 2 352 416 690 791 125
3 995 682 388 685 100
80 65 70 85

Find the combination of the transportation load that minimizes the total transportation
cost.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 3
A company that produces an innovative product has two branches and three main
customers. The two branches will produce 60 units and 40 units respectively of the
product during the next period. The company is committed to sell 50 units to the first
customer and at least 20 units to the third customer. The second and the
third customer also want to buy as many units from those remaining. The profit of the
company (expressed in thousands of euro) depending on the transportation of its
branches to customers is given in the following table.

Customer
1 2 3
Branch 1 5 7 6
Branch 2 2 3 5

How should we distribute the products in order to maximize the total profit?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 4
Factories X, Y and Z of a business have a monthly production capacity of a chemical
product 22, 15 and 8 tons respectively. This production covers the needs of four
consumer centers, which need 7, 12, 17 and 8 tons per month. The cost of transporting
one tone (expressed in €) from the factories in the centers of consumption is indicated
in the following table.

Consumer
center Ι ΙΙ ΙΙΙ ΙV
Factory
Χ 5 2 4 3
Y 4 8 1 6
Ζ 4 6 7 5

The responsible officer has formed the following program based on his experience: Χ
 ΙΙ: 12 tones, Χ  ΙΙΙ: 1 tone, Χ  ΙV: 9 tones, Y  ΙΙΙ: 15 tones, C  Ι : 7 tones, C 
ΙΙΙ : 1 tone.

Consider whether the transportation program developed is the best possible. If not, then
determine the optimum solution.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 5
A commercial company has three stores, let it be A, B and C, from which supplies its
three main largest customers, let it be M, N and Q, with a consumer product. All
warehouses have approximately the same size as with corresponding capacity of 50
tones for this product. The three customers require a certain period of time 30, 45 and
25 tons respectively. Transportation cost (in €) of each tone from each warehouse to
each customer is as follows.

Customer Μ Ν Q
Warehouse
A 30 40 10
B 20 10 50
C 70 20 20

The company's management wants to know whether it would be desirable to eliminate

one of the warehouses and sell the corresponding stock. What in your opinion is the
most appropriate decision?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 6
A company has three branches which produce a particular product that after production
is transported to distribution centers. Branches 1, 2 and 3 produce 12, 17 and 11 loads
per month respectively. Each distribution center needs to collect 10 loads per month.
The distance from each branch in the respective distribution centers is given (in kms) in
the following table.

Distribution center
1 2 3 4
1 800 1300 400 700
Branch 2 1100 1400 600 1000
3 600 1200 800 900

The fixed cost of each load is € 30 and the extra charge is € 1.50/km.

a) Design the appropriate transportation model.

b) Using the method of the northwest corner find the initial basic feasible solution.
c) Starting with the initial basic feasible solution determined to the question b find the
optimal solution. How many loads must be transferred from each branch to each
distribution center in order to minimize the total transportation cost?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 7
Let us suppose that England, France and Spain produce the whole wheat, barley and
oats in the world. The demand for wheat in the world requires 125 million hectares
available for its production. Similarly, 60 million hectares of land are required for the
production of barley and 75 for the production of oats. The total area available for this
purpose in England, France and Spain is 70, 110 and 80 million hectares respectively.
The number of hours required in England, France and Spain for the production of wheat
in one hectare of land is 18, 13 and 16 hours respectively. The corresponding hours in
the three countries for the production of barley in a hectare of land is 15, 12 and 12
hours respectively. The number of hours required in England, France and Spain for the
production of oats in one hectare of land is 12, 10 and 16 hours respectively. The
cost for each working hour for the production of wheat in England, France and Spain
is $ 3, $ 2.40 and $ 3.30 per hour respectively. The comparable costs for every working
hour for the production of barley is $ 2.70, $ 3 and $ 2.80 respectively, while for the
production of oats is $ 2.30, $ 2.50 and $ 2.10 respectively.

The problem that must be addressed is the distribution of land used for each country so
as to meet global needs and simultaneously minimize the total labor costs. Design and
resolve the appropriate transportation model.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 8
The company SAS has a chain of stores that sell equipment, hi-fi. The shareholders are
thinking of ordering new midi systems, which then would sell 430 pounds. The shops
are separated into three geographical areas, north, west and south and SAS believes
that the demand for the system in each area will be 170, 210 and 150 units
respectively. The SAS has decided to order 100 units for each geographic area stores.

There are three potential suppliers for the system A, B and C. A is capable of supplying
200 units for 400 pounds the one, the B 160 units for 420 pounds the one and C 180
units for 410 pounds the one. These prices do not include the transportation costs that
vary with the supplier and the supply contract according to the following table.

Stores
Suppliers North West South
Α 20 10 5
Β 5 15 20
Γ 30 10 25
(Unit transportation cost in British pounds)

The SAS wants to maximize the profit from the sales of the new system.
Design and solve the corresponding transportation problem.
TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou
PROBLEM 9
An airline company buys fuel for the plane from three vendors. The company needs for
each of the three airports that uses and for the next months 100000 gallons for the first,
180000 gallons for the second and 35000 gallons for the third airport. Each vendor can
supply fuel to any airport in the price (dollars per gallon) given in the table below.

Airport 1 Airport 2 Airport 3

Seller 1 0.92 0.89 0.90
Seller 2 0.91 0.91 0.95
Seller 3 0.87 0.90 0.92

Each seller has a restriction on the total amount of fuel that can be supplied each
month. The potential is 320000 gallons for the seller 1, 1270000 gallons for the seller
2 and190000 gallons for the seller 3.

Find the right fuel purchasing policy so as to minimize the total cost of feeding the
three airports.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 10
A farmer's association has launched public competition for the daily transportation of
some cereal from the head offices of the three regional warehouses. The daily
requirements of the warehouses are amounted to 18, 10 and 8 tons respectively.
Overall offers were submitted by three carriers, each specifying the maximum amount
of weight that can carry per day. These quantities are equal for all three companies
with 12, 16 and 24 tons respectively. The costs for the transportation of one tone
of grain from each company in the three regional warehouses are presented (in €) in
the following table.

Warehouses
7000 4000 10000
Companies 5000 3000 9000
6000 5000 9000

What contracts exactly would you advise the administration of the partnership to sign,
so that on the one hand to minimize the total transportation cost, on the other hand the
administration not to be accused for bias in favor of or against any of the carriers?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 11
A food industry produces chips at three factories, located in Birmingham, Glasgow and
London. Since the customers should be supplied with fresh products, these are not
stored in the factories. The monthly production ability of the factory in London is 750
tones, while of the other two are 500 tones. Every day 300 tones are given to the five
warehouses in order to subsequently be transferred to customers. The profit per sale
tone from the first warehouse is 0.4 pounds if produced in London, 0.6 if produced in
Glasgow and 2.2 pounds if produced in Birmingham. The corresponding gains for the
second warehouse are 1.1, 1.2 and 2 pounds.

The profit per tone of production in London is 1.7, 1.3 and 2.5 pounds when sold by the
third, fourth and fifth warehouse respectively. The corresponding gains for Birmingham
are 1.6, 1 and 0.5 pounds, while for Glasgow are 1.1, 0.8 and 2.1 pounds.

What is the maximum monthly profit that can be achieved by the industry?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 12
One major producer wants to buy raw material that does not exist in large stock. He
needs to purchase 100 tones per week for the operation of the three factories, which
have regular weekly requirements 40, 15 and 45 tons respectively. It is possible to
satisfy these requirements if it obtains 40, 35 and 25 tons per week from three different
suppliers. The cost of each unit of raw material is charged the same from any supplier,
but the buyer must pay the costs of transportation for the three factories 6, 3.6 and 4.8
pounds for the first supplier, 2.4, 1.2 and 0.6 pounds for the second supplier and 6, 4.8
and 3.6 pounds for the third supplier, respectively.

(a) How should the producer make the orders to minimize the total transportation
cost and simultaneously meet requirements of the factory?
(b) Assume that in the initial problem the requirement of the first factory is 50 tons
per week, of the second factory 15 tons a week and of the third factory 35 tones
per week.

Determine the optimal solution and compare with that of the initial problem.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 13
A pastry company produces a special type of bread in two branches with the following
production data.

Branch Production Production

capacity cost
(kg) ($/kg)
Α 2500 0.23
Β 2100 0.25

Four restaurant chains want to purchase this special type of bread. Their requirements
and the amount they offer are given in the table below.

Chain Maximum Offering price

demand ($/kg)
(in kg)
1 1800 0.39
2 2300 0.37
3 550 0.40
4 1750 0.36

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

Transportation costs (in $) of one kg of bread from each branch of the chain restaurants
are:

Chain 1 Chain 2 Chain 3 Chain 4

Branch Α 0.06 0.08 0.11 0.09
Branch Β 0.12 0.06 0.08 0.05

Design the delivery plan, which maximizes the net profit.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 14
A wholesaler sells some food in four major markets, let it be A, B, C and D. The weekly
demand has been accurately predicted and is 40 bags for the market A, 30 for B and C
and 20 bags for the market D. The wholesaler always orders the goods he markets from
two local producers, P & R. The first of them charges €1 for the transportation of one
bag in market A, € 4 for B, € 5 for C and € 6 for D.

As expected the cost of food is charged separately. The producer P charges €1 for the
transportation bags to the market A, €2 for B, €7 for C and €9 for D, without including
the cost of the product. One particular week both producers can supply from 65 bags,
but the producer P sells food for €1 more expensive per bag than P.

Which are the orders which must be placed this week by the wholesalers?

Next week the producers can still supply the same quantities, but now P sells €1 per
bag more expensive than P, even though transport costs have not changed at all.

Should the wholesaler change the orders? And if so, how exactly?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 15
The air company "Greek Air-transportations" uses four types of aircrafts (Β 727, Β 737,
Β 707, Α 300) and aims to use them in four new routes of transportation of the fresh
agricultural products:
ΕΑ 101: Athens - Bucharest
ΕΑ 108: Athens - Glasgow
ΕΑ 205: Thessaloniki - Laussane
ΕΑ 207: Thessaloniki - Hamburg

The weekly demand of the products is calculated to 400 tons for Bucharest, to 530 for
Glasgow, to 450 for Laussane and to 480 for Hamburg. The offering transportation
ability for the same time period is 420 tones with Β 727, 390 tones with Β 737, 480
tones with Β 707 and 570 tones with Α 300 (without the number of the aircrafts or the
routes getting examined).

The Β 737 cannot be used to the route Athens - Glasgow due to restricted action radius
(a medium supply is disadvantageous) while the Α 300 can’t fly to Bucharest, because
there is not specialized technical land potential.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

The profit per tone (in €) for each flight-type aircraft combination is:

Flight
ΕΑ 101 ΕΑ 108 ΕΑ 205 ΕΑ 207
Aircrafts
Α 300 8 16 13 14
Β 727 9 7 13 12
Β 737 10 10 14 12
Β 707 12 14 13 14

Design the routes so as to maximize the profit.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 16
An agricultural partnership has the following orders (in tones) for fresh and canned
peaches.

Month
May June July August
Product
Fresh 50 120 140 100
Can 45 40 35 55

The collection of one peach tone requires four working hours, the sorting and their
package for direct disposition (fresh) six working hours, while the canning of the same
quantity requires five working hours.

The partnership employs totally 10 employees, that work in average 25 days per month
by full daily 8-hour. 5 of them should be moved to other cultivation for 13 days every
month in May and for 16 days in July and in August.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

Monthly wages are formed per four-month as follows:

Labor - Month May June July August

Collection 1000 1100 950 900
Package 800 850 800 700
Canning 800 800 900 800

Late delivery of an order is not possible. Production that exceeds demand of the same
period reflects a charge against salary of € 50 during the month that production exceeds
demand.

Design the most advantageous production to the partnership.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 17
A company has decided to produce three new products. Its five branches are currently
over production capacity. The construction cost of one unit of the first product will be $
31, $ 29, $ 32, $ 28 and $ 29 in 1st, 2nd, 3rd, 4th and 5th branch respectively.

Construction cost of a unit of the second product will be $ 45, $ 41, $ 46, $ 42 and $ 43
in 1st, 2nd, 3rd, 4th and 5th branch respectively. Construction cost of a unit of the third
product will be $ 38, $ 35 and $ 40 in 1st, 2nd and 3rd branch, respectively, while
the 4th and 5th branch do not have the ability to produce this product. The sales
division is that they can be produced 6000, 10000 and 8000 units of products 1, 2
and 3 respectively per day. Branches 1, 2, 3, 4 and 5 have the potential to produce
4000, 6000, 4000, 6000 and 10000 units per day, respectively, without including the
combination of products available. It is assumed that whichever branch has the ability
and capacity to produce these products it can also produce combinations of these in
any quantity.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

The administration wants to know how to allocate new products to the branches in
order to minimize construction costs.

a) Design the problem as a transportation model.

b) Starting with the Vogel method for finding the initial possible solution use the
Simplex method of transposition problems to determine the optimal solution.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 18
A company which produces a unique product has three branches and four main
customers. The three branches will produce 6, 8 and 4 units respectively during the
following period. The company has pledged to sell 4 units to the first client, 6 units to
the second client and at least 2 units to the third client. The third and fourth clients want
to buy as much as possible of what will be left over. The net profit from the
transportation of a unit from the branch i to customer j is given in the table below.

Clients
1 2 3 4
Branches
1 6 3 2 4
2 7 5 4 6
3 9 8 6 3

Management wants to know how many units to sell to its interest to the third and fourth
client and how many units should be transferred from the branches to each of the four
client in order to maximize the total profit.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 19
New designs must be done for the energy systems of a new building. The three
possible sources of energy are electrical, gas and solar energy. The building needs the
energy for electricity, water heating and heating of the interior spaces. The daily
requirements are:

Electricity : 20 units
Water heating : 10 units
Heating : 30 units

The size of the roof reduces solar modules to 30 points, while there is no restriction for
the rest. The electricity needs can be satisfied by the electricity market ($ 200 unit). The
needs of the two other sources can be met from some source or combination of
sources. Prices of units are:

Electricity Natural Solar

gas energy
Water heating $ 450 $ 300 $ 150
Heating $ 400 $ 250 $ 200

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

(a) Design the problem as a transportation model.

(b) Use the northwest corner method for finding the initial basic possible solution to the
problem as designed at (a).

(c) Starting with the basic feasible solution of (b), use the Simplex transportation
method to determine the best solution.

(d) Use Vogel method for finding the initial feasible solution of the problem as
designed at (b).

e) Starting with the initial basic feasible solution of the question (d), use the
methodology of transposition problems to find the optimal solution.

Compare the numbers of steps required to determine the optimal solution using the
above two methods.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 20
A company has two branches that produce a specific product distributed in three
reception centers. The production of each unit has the same cost in both branches and
the transport cost (in hundreds of U.S. dollars) per unit for the product is presented for
each combination of branch and reception center in the table below.

Reception center
1 2 3
Branch
Α 4 6 3
Β 6 5 2

A total of 60 units of product are to be produced and transported per week. Each
branch can produce and send any number of units with a maximum of 50 units per
week, i.e. there is flexibility in how they will share the total production between the two
branches, in order to reduce transportation costs.

The objective of the management is to determine how many should be produced at

each branch and then what will be the total mode of transportation to minimize the
transportation costs.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

Answer the following questions:

(a) Suppose that each reception center must accept 20 units per week.
Design the problem as a transportation model.

(b) Use the northwest corner method to find an initial basic feasible solution of the
problem, as designed in question (a). Then determine the optimal solution.

(c) Suppose now that each distribution center can receive an amount between 10 and
30 units per week to reduce transportation costs, but the total cargo transported
remains at 60 points. Design the problem as a transportation model.

(d) Use the Vogel method to find the initial basic feasible solution for the problem as
designed at (c) and then determine the optimal solution.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 21
One of the most important products of a multinational IT company is produced in two of
its factories and is mostly available in three main clients of the firm. The two factories
will produce over the next period 600 and 400 units of the product respectively. The
company is committed with contracts for the sale of 500 units to the first client and at
least 200 units to the second. Also the second and third clients both want to buy as
many of the remaining units of the product. The net profit from the sale of each unit
depends on its origin (factory) and the destination (client) and ranges according to the
following table.

Client
Factory 1 2 3
1 50000 70000 60000
2 20000 30000 50000

How exactly should the 1000 units of the product be allocate in order to maximize the
total profit?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 22
A student who is studying abroad, decided that he needs for the next four years a car
for his movements. Since his costs are much he wants to carry out his wish by the most
inexpensive way. What he can’t decide is whether to buy an old car or a newer one.
Also he does not know whether he should sell it through these four years. The following
data are given.

Purchase Cost of car use Car purchase price

price per year ($) per year ($)
st
($) 1 2nd 3rd 4th 1 st
2nd 3rd 4th
Old car 1000 1900 2200 2500 2800 600 400 200 0
New car 3800 1000 1300 1700 2300 2200 1600 1200 1000

If the student changes his car within the next four years, he will do it at the end of
that year and will take a car of one of two types. However, he plans to get in the
future a newer of that what he gets now. He wants to find the most appropriate solution.

a) Describe how the problem can be expressed as a transportation model

b) Find the initial solution using any relevant method.
c) Determine the optimal solution by the solving transportation problems methodology

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 23
A large construction company undertook computerization items to equip a ministry with
the PC terminal units. It was agreed to supply 150 units next October and 225 units in
November. Working an eight hour shift, the manufacturer can only produce 160
terminal units per month. Extending working hours with two hours overtime, it is
possible to construct 30 additional units per month, with an additional unit cost of € 20.
The terminal units can be stored at a monthly cost of € 3 per unit. The cost of producing
each unit of PC is constant, regardless of the month of construction.

Formulate the model (the initial table) in order to find out the production schedule,
which minimizes the total cost.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 24
A company is expected to face in the next four months monthly demands of 95, 120,
110 and 100 units of products. The production capacity is 90 units per month at a cost
of €20 per unit in regular employment. The overtime, which can reach 20% of normal,
costs €30per unit. The storage cost is €1 per unit and per month, while the cost for late
delivery of order is €3. The company is worried about the high cost of overtime
expenses and thinks to make a limited expansion of its facilities so that the normal
capacity to be increased to 99 units in order to reduce overtime, which seem to
overburden the operating costs. The total production capacity will not be changed.

If the company is getting expanded at the beginning of the four months, the costs will
remain the same. If it extends at the beginning of the 3rd month, then the cost will be
increased by €1, but according to latest legislative incentives for the extension will
receive a subsidy by the government with €400.

What exactly would you suggest the company to do?

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 25
The Build-Em-Fast Company has agreed to supply the best customers with three
products every week for three weeks, though the production will require some overtime.
The data involved are the following:

Week Maximum production Maximum Production cost per

(normal period) production unit
(overtime) (normal period)
1 2 2 $ 6000
2 2 1 $ 10000
3 1 2 $ 8000

The cost per unit produced in overtime for each week is $ 2000 more than in the
regular season. The storage cost is $ 1000 per unit for each week of storage. There are
already two products in construction, but the administration does not want to have to
manufacture products after the end of the three weeks.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

The administration wants to know how many units it should produce per week to
maximize its profit.

(a) Design the problem as a transportation model creating cost tables and requirement
tables.

(b) Use the Simplex transportation method to determine the optimal solution.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 26
The Metro Water District is a consulting company of environmental projects which is
responsible for the management of the transportation of water in a large geographical
area. The area is relatively dry so the water must be transported from other areas (from
rivers Colombo, Sacron and Calorie) and then the company distributes it in its own turn
throughout the area. The main customers are in the areas of Berdoo, Los Devils, San
Goand, Hollyglass. Water can be transferred from any river in any city other than the
river Calorie which does not communicate with the area Hollyglass. Due to the
geographical specificity of local transportation costs depends to a large extent on the
location of rivers and towns. The transportation cost per thousand cubic meters of
water in dollars from all the rivers to all the cities is given in the following table.

Area Berdoo Los Devils San Go Hollyglass Capacity

supply
River
Colombo 16 13 22 17 50
Sacron 14 13 19 15 60
Calorie 19 20 23 - 50
Minimum requirement 30 70 0 10
Normal requirement 50 70 30 0

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

The charge of consumers by the company is the same for every cubic meter of water
irrespectively of location and distance. The company is worried about how to distribute
the water in the summer months, during which the amount of water available is limited
(last column in table). The company must supply every city with a minimum amount of
water to meet the minimum requirement of each city (except San Go area that has its
own water source). The line of the normal requirement shows that Berdoo wants
20000 cubic meters of water above the minimum requirement, the San Go wants
30000 cubic meters water and Hollyglass wants as much as possible.

The administration wants to distribute water supplies in such a way as to minimize the
total transportation cost. Formulate and solve an appropriate transportation model.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

PROBLEM 27
The Northern Airplane Company manufactures commercial airplanes for several
airlines in the world. The last stage in the manufacturing process is the construction of
the engine and its installation to the spindle of the airplane. The company works only
with contracts with main term the delivery of a number of airplanes at certain time.
There must be an engine production plan for the next four months.

In order the company to prevent delivery days should produce engines in the way
given in the third column of the table below. In addition all engines which must be
produced per month are at least 10, 15, 25 and 20 respectively. But it may need some
engines to be constructed one or more months after the initial programming due to
production conditions. These engines however should be stored and the storage cost
reaches $ 15000 per month.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou

 Scheduled facilities Maximum Unit production Unit store cost
Month production cost
1 10 25 1.08 0.015
2 15 35 1.11 0.015
3 25 30 1.10 0.015
4 20 10 1.13 0.015
(The cost elements are expressed in millions of dollars)

The company has to decide which is the best way of engines production per month in
order to minimize the total cost.

Formulate and solve the appropriate model.

TRANSPORTATION PROBLEM: EXERCISES - V. Kostoglou