Objective

• Min cost plan to transport commodity from m sources (Supply) to n destinations (Demand)

Model

• Balanced model
• All supply = All demand

Solution process

• Starting feasible solution:

1. North-West rule
2. Least-cost method

• Determine entering var.:

1. U_I
2. V_j
3. C_pq: enters @ most +ve
4. Ends when C_pq -ve

• Determine leaving var.:

1. Closed loop of (addition) & (subtraction)
2. (min) leaves
3. else choose arbitrarily

Supportive

• Not transport: Increase C_pq
• Excess supply: Dummy plant
• Excess demand: Dummy distri-centre
• Penalty costs: C_pq at Dummy centres
• If Dummy plant values: lacks Ss
• If Dummy centre values: lacks Dd
• If All Ss / Dd must be met, values @ Dummy centres = 0