Transportation Problem Problem 1.

The MJK Manufacturing Company must produce two products in sufficient quantity to meet contracted sales in each of the next three months. The two products share the same production facilities, and each unit of both products requires the same amount of production capacity. The available production and storage facilities are changing month by month, so the production capacities, unit production costs, and unit storage costs vary by month. Therefore, it may be worthwhile to overproduce one or both products in some months and store them until needed. or each of the three months, the second column of the following table gives the maximum number of units of the two products combined that can be produced on !egular Time "!T# $and on %vertime "&#. or each of the two products, the subsequent columns give "'# the number of units needed for the contracted sales, "(# the cost "in thousands of dollars# per unit produced on !egular Time, ")# the cost "in thousands of dollars# per unit produced on %vertime, and "*# the cost "in thousands of dollars# of storing each extra unit that is held over into the next month. 'n each case, the numbers for the two products are separated by a slash +, with the number for ,roduct - on the left and the number for ,roduct ( on the right. Product 1/Product 2 Maximum Combined Production Month ( ) RT -& 1 -& T ) ( ) Sales /+) )+/ *+* Unit Cost of Production ".-,&&&$s# RT -/+-0 -2+-/ -3+-2 T -1+(& (&+-1 ((+(( Unit Cost of Storage ".-,&&&$s# -+( (+-

The production manager wants a schedule developed for the number of units of each of the two products to be produced on !egular Time and "if !egular Time production capacity is used up# on %vertime in each of the three months. The ob4ective is to minimi5e the total of the production and storage costs while meeting the contracted sales for each month. There is no initial inventory, and no final inventory is desired after the three months. ormulate this problem as a transportation problem by constructing the appropriate parameter table. Problem 2! The Maharashtra government is auctioning off oil leases at two sites6 - and (. 7t each site, -&&&&& acres of land are to be auctioned. ,%C, %89, and :%C are bidding for the oil. 9overnment rules state that no bidder can receive more than *& ; of the land being auctioned. ,%C has bid ` -&&&+acre for site - land and ` (&&&+acre for site ( land. %89 has bid ` 3&&+acre for site - land and ` ((&&+acre for site ( land. :%C has bid ` --&&+acre for site land and ` -3&&+acre for site ( land. ormulate a balanced transportation model to maximi5e the government<s revenue and find the initial basic feasible solution by =ogel<s 7pproximation method.

"P Solution 1.

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