Problem:
Given the following information set up the problem in a transportation table and solve for the minimum-cost plan:
|
PERIOD
|
|
1 |
2 |
3 |
| Demand |
|
550 |
700 |
750 |
| Capacity |
|
|
|
|
| Regular |
|
500 |
500 |
500 |
| Overtime |
|
50 |
50 |
50 |
| Subcontract |
|
120 |
120 |
100 |
| Beginning inventory |
|
100 |
|
|
| Costs |
|
|
|
|
| Regular time |
$ |
61 per unit |
| Overtime |
$ |
83 per unit |
| Subcontract |
$ |
90 per unit |
| Inventory carrying cost |
$ |
2 per unit per month |
| Back-order cost |
$ |
3 per unit per month |
Suppose that an increase in warehousing costs and other costs brings inventory carrying costs to $2 per unit per month. All other costs and quantities remain the same.
Required:
Determine a revised solution to this transportation problem.
Solve the given numerical problem and illustrate step by step calculation.