1. A firm has 2 factories X & Y & 3 retail stores A, B & C.

The number of units of a

product available at factories X & Y are 200 & 300 respectively, while demanded at
retail stores are 100, 150 & 250 respectively. Rather than shipping directly from
sources to destinations, it is decided to investigate the possibility of trans-shipment.
Find the optimal shipping schedule. The transportation costs in rupees per unit are
given below.
Factory
Retail store
X
Y
A
B
C
Factory
X
6
7
8
Y
0
9
6
Reatil

3
7

store A
0

1
1

C
1

Solution:

8
7
6
For
this trans-shipment problem, buffer
9
0
stock
= total supply = total demand = 500
units. Adding 500 units to each supply/demand point,we get table below. I.B.F.S obtained by
VAM is also shown.
To
X
C

Supply
0

700

(500)
6

(200)
5

800

(500)
2

(50)
5

(250)
1

500

(400)
1

(100)
0

500

(500)
6

500

650

(500)
750

3000

500

500

600

From

X
Y
A
B
C

Demand
The the diagonal allocations in this table may be ignored since they have no physical
meaning. The remaining allocations may be interpreted as follows:
To

C
0

(500)
6

(100)
5

(100)
4

(500)
2

(50)
5

(250)
1

(500)
1

0
(500)
750

From

Y
A
B
C

(500)
6

500

500

600

650

A&
supplies 50 units to retail store B & 250 units to C.

Factory X
supplies
10units
each to
retail stores
B. Factory Y

2. Table below represents the supply from the plants, the requirement at the
distribution centres & the unit transportation costs.

Distribution Centres
A

Supply

Plant
1

11

13

25

150

13

15

35

300

150

150

150

450

2
Requirement

when each plant is also considered a destination & each distribution centre is also
considered as origin, some additional cost data are necessary, which are given in the tables
below:

To plant
1

75

From Plant 1

11

2
To distribution centres
A

C
From

Distribution Centre A

33

11

11

13

75

13

To plant

From

13

25

Distribution centre A

35

13

55

65

Find the optimal shipping schedule for the transhippment problem.

Solution:
From the given 4 tables we get the following transportation formulation of the transshipment problem:

To
1
C

Supply
0

75

11

13

25

600

(150)
11

(300)
13

(150)
15

35

750

(300)
13

(450)
25

33

11

450

35

13

(300)
11

(150)
13

450

55

65

75

(450)
13

450

600

(450)
600

450

450

600

From

1
2
A
B
C

Demand
A buffer stock of 450 units, which is the total supply as well as total requirement in the
original transportation problem, is added to each row a& column of the trans-shipment
problem. The opyimal solution is also given in above table. The diagonal allocations in the
table may be igonred since they have no physical meaning. The remaining allocations may
be interpreted as follows:
a) Plant 2 supplies 300units to plant 1. This increases the supply capacity of plant 1 to 450
units including the 150 units originally available in it.
b) Plant 1 transports 300 units to distribution centre A & 150 units to B.
c) Distribution centre A sends 150 units to C out of 300 units available in it.
The total cost of trans-shipment = 11 300 + 13 150 + 11 300 + 11 150 =
10,200.