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This method is more systematic and orderly than least cost method. Here penalties for each column and row of the transportation table are determined, and the row or column with largest penalty is chosen for allocation. Then the cell with lowest cost form the selected row column is allocated the maximum possible.
After this the row or column whose supply or demand is exhausted is exhausted is deleted and the penalties are again calculated for the shrunken table. The procedure continue still full demand supply is exhausted. Here penalty of each row column = ( second lowest - lowest costs of that row / column.
Scope of the OR techniques can be derived in followings various importance fields: 1. In Agriculture : With the explosion of population and consequent shortage of food O
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advantage of quality circle process
Maximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 4 X1+ X2 2 X1, X2 0on..
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