LINEAR PROGRAMMING : DECISION MAKING TECHNICS: Consider the The Big M Company Transportation Problem presented in the chapter Linear Programming: Formulation and Applications. There is some uncertainty about what the unit costs will be for shipping through the various shipping lanes. Therefore, before adopting the optimal solution (shown in Figure 3.10), management wants additional information about the effect of inaccuracies in estimating these unit costs. After some thought, the management requires at least a 90% chance of satisfying the original constraint at the Factory 1.

QUESTION: Discuss how this requirement can be incorporated in generating a sensitivity report to address which of the unit shipping costs given in Table 3.9 has the smallest margin for error without invalidating the optimal solution given in Figure 3.10? WRITE ALL FORMULAS PRINT SCREEN WITH CELLS (COLUMNS AND ROWS) TO SEE THEM.

DATA: DISTRIBUTION PROBLEM

shipping cost	customer 1	customer 2	customer 3
Store 1	700	900	800
Store 2	800	900	700

units shipped	customer 1	cistomer 2	customer 3	Total shipped out
Store 1	10	2	0	12
Store 2	0	6	9	15
Total to customer	10	8	9

Data: Linear Programming

Object funtion: total cost, minimize it ./ variables/ constraints

References : Introduction to Management Science (4th Edition) , hillier & Liberment/ introduction to operation management