Least cost methods, Operation Management

Assignment Help:

At any stage if there is a tie in the minimum cost so that two or more routes have the same least cost of transportation then conceptually either of them may be selected. However a better initial solution is obtained if the route chosen is the one where largest quantity can be assigned. Thus if there are three cells for which the least cost value is equal then consider each one of these one by one and determine the quantity ( by ) reference to the demand and supply quantities given which can be despatched and choose the cell with the largest quantity. If there is still a tie then either of them may be selected.

To begin with the lowest of all cost elements is 1 for the by with corresponding supply and demand being 24 & 12. According assign 12 to this cell delete the Colum and reduce the quantity available to 12. The next cost is Rs. 2 in cell BX, DX, AY, AZ. But we cannot allocate to cell BX as the demand for B is exhausted. Now we see that demand of cell AY i ,e, 13 is more than available supply of 24-12 = 12 units. For cell DX demand 19 is greater than supply 15 and for cell AZ 13 is less than supply 21. Out of these maximum amount of 15 units can be allocated to cell DX only. So we choose cell DX and allocate 15 units to it. Delete the row headed X as well and adjust the available demand at D to 4.


Related Discussions:- Least cost methods

Explain Causes of Organisational Change, Explain Causes of Organisational C...

Explain Causes of Organisational Change. Causes of Organisational Change: Causes of Organisational modifies are as follows: (A) External pressures (i) Change in Equipme

Alternative process sequences - services, Alternative Process Sequences - S...

Alternative Process Sequences - Services Just as in the selection of processes for product production, typically there will be alternative ways of delivering a service. Consid

System complexity - boulding taxonomy, System complexity - Boulding taxonom...

System complexity - Boulding taxonomy  To obtain an insight into the nature of the system with which the operations manager is dealing, consider the economist Kenneth Boulding

Explain purchasing and supply management, Briefly discuss each of the seven...

Briefly discuss each of the seven periods in the evolution of purchasing and supply management. What do you forecast for the future?

Explain common-size financial statement, What is a "common-size financial s...

What is a "common-size financial statement" and how would it assist you to manage your business successfully?

Explain which path is the critical path, Given the information below: 1....

Given the information below: 1. Construct a network using the AON (Activity on Network method) like we did in class. See problem 3.4 on page 90 and its answer in the Appendix on

Define the cost of equity as a check on the capm calculation, Was there som...

Was there some other way to estimate the cost of equity as a check on the CAPM calculation?

Explain another name for a cause-and-effect diagram, Another name for a cau...

Another name for a cause-and-effect diagram is which of the following? Histogram Run chart Check sheet Fishbone diagram

Explain what kind of industries does a localization strategy, What kind of ...

What kind of industries does a localization strategy makes sense? Why? When does a global standardization strategy make most sense? Why?

Explain forecast week 7 using a six-week moving average, Weekly sales of ry...

Weekly sales of rye bread at the corner store are shown below. Using this data, forecast Week 7 using a six-week moving average. Week Sales 1 415 2 389 3 420 4 382 5

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd