Izzy Plastic Processing Company has three processing plants in three locations. It received orders from three customers.
Question:
Izzy Plastic Processing Company has three processing plants in three locations. It received orders from three customers. Plant 1 has 700 cartons, Plant 2 has 500 cartons, and Plant 3 has 300. cartons. Customer A needs 400 cartons, customer B needs 500 cartons, and customer C needs 600 cartons.
The costs of transportation per carton of the product from the plants to the customers are presented as follows:
Customer A Customer B Customer C
Plant 1 ₱5.00 ₱2.00 ₱5.50
Plant 2 ₱4.00 ₱2.50 ₱3.00
Plant 3 ₱4.50 ₱3.50 ₱3.00
Required:
Determine the distribution of the products to the three customers where the transportation costs are minimized using the stepping-stone and modified distribution (MODI) methods following the northwest corner rule for the initial solution.
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright