SUBJECT: Management Science (Operations Research) TOPIC: Transportation Problem (Stepping Stone)

QUESTION: The San Miguel Corporation manufactures and markets dairy products nationwide. The company has processing plants in LAGUNA and CAVITE in which the labor costs are low. Its three major outlets are located near the large market areas of QUEZON CITY, MAKATI, and MANILA.

The sales requirements for next month at the Quezon city outlet are 15,000 units, at the MAKATI outlet 8,000 units, and at the MANILA outlet 10,000 units. The processing plant in each location is limited. The processing plant in LAGUNA can produce and transport 20,000 units: the processing plant in CAVITE can produce 16,000 units. The estimated cost of transporting the product from the processing plants to each outlet differs these unit shipping cost are shown in the table below.

	To
From		MANILA	MAKATI	QUEZON CITY	SUPPLY
LAGUNA		40	30	50
CAVITE		30	10	50
DEMAND

1) DETERMINE THE TOTAL CELL COST OF A2 FOR TABLE 3.

2) DETERMINE THE TOTAL CELL COST

3) DETERMINE THE VALUE OF IMPROVEMENT INDEX = VACANT CELL VALUE OF B1 in Table 3 Please show complete solution. Thank you!