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Row Minima Methods:
Steps1: The smallest cost in the first row of the transportation table is determined. Let it be C1j . allocate as much as possible amount X1j = min (a1 ,b1) so that either the capacity of origin O1 is exhausted or the requirement at destination D j is satisfied or both .
Steps2:
a. If X1 = a1 so that the availability at origin O1 is completely exhausted cross out the first row of the table and move down to the second row.
b. If X1 = a1 b1 the origin capacity a1 is completely exhausted as well as the requirement at destination Dj is completely satisfied. An arbitrary tie breaking choice is made. Cross out the j column and make the second allocation X1k = 0 in the cell ( 1k ) with C1k being the new minimum cost in the first row. Cross out the first row and move down to the second row.
c. If X1j= bj so that the requirement at destination Dj is satisfied cross out the j column and reconsider the first row with the remaining availability of origin O1.
Step 3: Repeat steps I and 2 for the reduced transportation table until all the requirements are satisfied.
It allocates costs based on the price elasticity of demand. Yet higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
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