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    ECONOMICS OF INTERNATIONALTRANSPORTATION

    TITLE OF THE PROJECT

    OPTIMIZATION OF TRANSPORTATION COST OFLCD TV

    SUBMMITED BY: SUBMITTED TO:

    Dr. NAVAL KARRIR

    RAJEV KUMAR PAL

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    INDEX

    S.No.

    Topic PageNo.

    1 Executive Summary 32 Introduction 4

    3 Background 5

    4 Transportation Problem 6

    5 Approach and Methodology 8

    Phase I Obtaining an initial feasible solution

    6 Northwest-Corner Method 8

    7 The Minimum Cell Cost method 9

    8 Vogels Approximation Method (VAM) 10

    Phase II Moving towards optimality

    9 MODI Method 11

    10 Stepping-Stone Method 1511 Analysis 17

    12 Sensitivity Analysis 18

    13 Conclusion 21

    14 References 22

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    EXECUTIVE SUMMARY

    Today electronic products have become the main power of national economygrowth. All the manufacturers have set their primary markets to meet theconsumers demand. Taking the current LCD TV manufacturers as an example,they have to emphasize on the product design, performance and the reduction of cost. Therefore, nowadays the most important task for LCD TV industry is thatthe international manufacturer shall fix a suitable winwin price and productivecapacity for itself as well as for the Original Equipment Manufacturing (OEM)when the OEM has received the order, so that both sides could construct a long-established relation and they could reach the object of maximized profit.

    This paper, reports the results from a series of various methods regarding how

    the transportation cost of SONY LCD TV (50) could be optimized.Manufacturers have managed to break through the constraints of cost andcomplex cooperation relationship between partners, through strategic co-ordination and integration.

    Effective distribution of SONY LCD TV improves all of the five performance

    dimensions (cost, flexibility, responsiveness, delivery, and financial return),although the degrees of improvement on different performance dimensions aredifferent to some extent.

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    INTRODUCTION

    In the fiscal year 2008, ending in March 2009, Sony incurred its largestoperational loss in its history of $2.4 billion. Sharp incurred a net loss of $1.3billion in fiscal 2008, ending March 2008, citing stagnant consumption, fiercecompetition. (Source has given in references pg.)

    The struggle for growth during the economic downturn forced, many

    companies has stetted the target to reduce their prices in order to increase salesand to maintain their market share on the basis of contract manufacturers for cost-reduction opportunities.

    To succeed in this shifting environment, Sony needs to build strong links withsuppliers. It is important that Sony and its suppliers share policies, strategiesand technology. Collaboration between Sony and its suppliers should ultimatelybe aimed at earning customer approval. This goal must form the common baseof Sony's procurement activities and its suppliers' sales activities. Sony callssuppliers capable of maintaining this kind of collaborative relationship"partners."

    The overall structure of the SONY LCD TV supply chain is shown the

    integration of the SONY LCD TV supply chain influences manufacturerscapability to satisfy market requirements. The integration relationship involvessuppliers, manufacturer, and firms downstream. In the co-ordination betweenmanufacturer and suppliers, the manufacturer sets up production planning bydemand forecasting or firm order from certain customers, and then places ordersto all Consumer demand and customer requirements are pushing the industryvery hard in the areas of product quality, price and delivery lead times, with

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    customers expecting manufacturers to provide the production flexibility torespond to fluctuations in demand.

    BACKGROUND

    SONY LCD TV (50) which has total cost at factories Rs. 40,000

    Transportation Mode Truck (By Road) which includes the Cost Factors (Transportation CostsRs.220/km., Admin. Cost, [email protected]%, Loading Charges, Octrai, Taxes (toll taxes+ excise duty + etc), and Warehouses charges, Unloading Charges etc.)

    A liquid crystal display (LCD ) is a thin, flat panel used for electronically displayinginformation such as text, images, and moving pictures. It hasno problemto transportif it's stillin the factory packaging. Mostmanufacturersgo through a decent amount of work to makesure their packaging can stand up to fairly stressful conditions. For large LCD's it is harder todo so; however, it is usually at least packaged so that it can stand on any side. If there is no'this side up' on the box, then it is safe to transport on its side. (They are careful to note if damage will occur when transported on one side, because they would be liable for damageotherwise.) Without factory packaging-- The screens are fairly delicate to puncture andshould not be transported face-down or at a weird orientation.Factory packaging equalizespressure on all sturdy surfaces to minimise the risk of damage, and without packagingthere is none of this protection . Some of the packers movers Kanpur, Noida, Ghaziabadand Faridabad also offer warehousing and storage facilities to the customers. They have wellbuilt, spacious and moisture free warehouse well guarded by the companies employed guardsand workers. Warehouse are friendly for the storing all kinds like household items, industrialgoods, commercial goods, office goods and many other lovable commodities of thecustomers.

    Table (A) Distance and Warehouses between Destination and Sources

    S.N. Distance (Km) W1 W2 W31 GZB-Dehradun (216km.) Saharanpur

    2 GZB-Mumbai (1418 km.) Bhopal Pune

    3 GZB-Chennai (2114 km.) Bhopal Nagpur Vijayawada

    4 Delhi-Dehradun (235km.) Saharanpur

    5 Delhi-Mumbai (1407 km.) Bhopal Pune

    6 Delhi-Chennai (2095km.) Bhopal Nagpur Vijayawada

    7 Kanpur-Delhi (575 km.) Delhi Saharanpur

    8 Kanpur- Mumbai (1288 km.) Nagpur Pune

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    mailto:[email protected]%25mailto:[email protected]%25
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    9 Kanpur- Chennai (1885 km.) Nagpur VijayawadaTRANSPORTATION PROBLEM

    A destination may receive its demand from many sources.So, The objective is to determine the transporting plan, to meet all demands but not exceedany supply, to minimize the total transportation cost.The standard transportation model seeks to find a transportation plan for SONY LCD TV(50) from Ghaziabad, Delhi and Kanpur warehouses toDehradun, Mumbai and Chennaistores.The data in the model includes:

    (1) The amount of supply at each source and the demand at each destination;(2) The unit transportation cost of theSONY LCD TV (50)from each source to each

    destination.Table (1)

    Warehouse/Stores

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 UnitsDelhi Rs.2768 Rs.3760 Rs.4500 200 UnitsKanpur Rs.3473 Rs.3635 Rs.4267 150 UnitsDemand 100 Units 200 Units 200 Units 500 Units

    Transportation Problem is a special case of Linear Programming:

    The LP formulation of the TP problem is:

    Let,

    Xij = quantity of SONY LCD TV (50) transport from source i to destination j

    Cij = per unit transporting cost from sources i to destination j (fromGhaziabad, Delhi andKanpur warehouses toDehradun, Mumbai and Chennaistores)

    Si be the row i total supply (where i= 1, 2, 3,)

    Dj be the column j total demand (where j= 1, 2, 3)

    For this type of problem all units are available

    3 Warehouse and 3 Stores

    No. of Variables is 9

    No. of Constraints is 6 (Constraints are for warehouses capacity and stores demand)

    To solve the transportation problem by its special purpose algorithm, it is required that thesum of the supplies at the warehouses equal the sum of the demands at the stores.

    Si(i=1,2,3)= Dj(j=1,2,3)= 500 units6

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    LP Formulation

    The linear programming formulation in terms of the amounts shipped from the origins to thedestinations, Xij, can be written as:

    Objective function:

    Minimize Z = 2667X11 +2768X21 +3437X31 + 3781X21 + 3760X22 + 3635X23 + 4525X31+4500X32 +4267X33

    Subject to the constraints:

    X11+X21+X31> 100

    X12+X22+X32> 200

    X13+X23+X33> 200

    X11+X12+X13< 150

    X21+X22+X23< 200

    X31+X32+X33< 150With non negativity condition: X11,X12,X13,X21,X22,X23,X31,X32,X33> 0

    Network Representation:

    Figure (1)

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    Dehradun

    (S1) 150 units

    Mumbai

    (S2) 200 units

    Chennai

    (S3) 150 units

    Ghaziabad

    (D1) 100 units

    Delhi

    (D2) 200 units

    Kanpur

    (D3) 200 units

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    (Warehouses) (Stores)

    APPROCH AND METHODOLOGY

    The transportation problem is solved in two phases:

    Phase I obtaining an initial feasible solution

    Phase II moving toward optimality

    In Phase I , the Minimum-Cost Procedure can be used to establish an initial basic feasiblesolution without doing numerous iterations of the Simplex Method.

    There are three different ways:

    Northwest corner method

    The Minimum cell cost method

    Vogels approximation method (VAM)

    Northwest corner method :

    The North West corner method is easy to use and requires only simple calculation. As themethods name implies, we start work in the northwest corner or the upper left cell. Make anallocation to this cell that will use either all the demand for that row or all the supply for thatcolumn, whichever are smaller as cell (1, 1) 100 units (Rs. 2667). We see that, site1s supplyis smaller than Dehraduns demand. This eliminates column site 1 from further considerationbecause we used all its demand and now repeat the above steps, we have the followingtableau and Stop since all allocated have been assigned.

    Initial tableau of NW corner method

    Table (2)

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    Delhi Rs.2768 Rs.3760 Rs.4500 200 Units

    Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units

    Demand 100 Units 200 Units 100 Units 500 Units

    8

    100 50

    150 50

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    The initial basic feasible solution is:

    2667X11 +3781X21 + 3760X22 + 4500X32 +4267X33 =

    2667(100) +3781(50) + 3760(150) + 4500(50) +4267(150) = Rs.18,84,800

    Minimum cell cost method :

    The initial basic feasible solution obtained by this method usually gives a lower beginningcost, so start with lowest cost(Rs.2667)entry 100 units in the cell (1, 1) and allocated asmuch possible, i.e., X11= 100 units. The next lowest cost (Rs.2768) lies in the cell (2, 1), somake no allocation, because the demand from Dehradun Store was already used in the cell (1,1). The next lowest cost (Rs.3635) lies in the cell (3, 2), so allocated X32 =150 units.Similarly for cell (2, 2) allocation is X22 = 50 units, X31 =50 units, X32= 150 units.

    Initial tableau of the Minimum cell cost method

    Table (3)

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    Delhi Rs.2768 Rs.3760 Rs.4500 200 Units

    Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    The initial basic feasible solution is:

    2667X11 +3760X22 + 3635X23 + 4525X31 +4500X32 =2667(100) +3760(50) + 3635(150) + 4525(50) +4500(150) = Rs.19,01,200

    The cost is more by Rs.1, 16,400, as compared to the cost obtained by Northwest corner method.

    Vogels approximation method (VAM) : 9

    100

    50

    50

    15

    150

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    In this method there are some steps to obtaining initial basic feasible solution.

    Step 1: for each column and row, determine its penalty cost by subtracting their two of their least cost

    Step 2: select row/column that has the highest penalty cost in step 1Step 3: assign as much as allocation to the selected row/column that has the least cost

    Step 4: Block those cells that cannot be further allocated

    Step 5: Repeat above steps until all allocations have been assigned

    Initial tableau of the Vogels approximation method (VAM)

    Table (4)

    Penalty (2768-2667)=101

    (3635-3760)=125

    (4500-4267)=233

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply Penalty Penalty

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units (3781-2667)=1114

    (4542-3781)=744

    Delhi Rs.2768 Rs.3760 Rs.4500 200 Units (3760-2768)=792

    (4500-3760)=740

    Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units (3635-3473)=162 (4267-3635)=632Demand 100 Units 200 Units 200 Units 500 Units

    The initial basic feasible solution is:

    2667X11 +3781X21 + 3760X22 + 4500X32 +4267X33=

    2667(100) +3781(50) + 3760(150) + 4500(50) +4267(150) = Rs.18, 84,800

    Initial solution from:

    Northeast cost, total cost = Rs.1884800

    The min cost, total cost = Rs.1901200

    VAM, total cost = Rs.1884800

    It shows that the 1st and 3rd method has the min cost. So, this will be used to obtaining optimalsolution.

    Phase II

    10

    100 50

    150 50

    150

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    In Phase II , the Stepping Stone Method, using the MODI method for evaluating the reducedcosts may be used to move from the initial feasible solution to the optimal one.

    Modified distributed method (MODI) :

    It is a modified version of stepping stone methodMODI has three important elements:

    (1) It determines if a tableau is the optimal one

    (2) It tells you which non-basic variable should be firstly considered as an entry variable

    (3) It makes use of stepping-stone to get its answer of next iteration

    Modified distributed method (MODI) for Initial tableau of the Vogels approximation

    method (VAM): Initial tableau of the Vogels approximation method (VAM)

    Table 4(a)

    Vi V1 V2 V3

    Ui Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    U1 Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    U2 Delhi Rs.2768 Rs.3760 Rs.4500 200 Units

    U3 Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    Lets test to see whether the current tableau (4a) represent the optimal solution. We can dothis because of duality and sensitivity analysis to interpret. We can introduce twoquantities Ui,

    and Vj, where Ui, is the dual variable associated with row i and Vj, is the dual variable

    associated with column.From duality theory:

    Ui + Vj, = Cij ..eq (1) Represent all Basic Variables

    We can compute all Ui, and Vj, values from the initial tableau (4a) using eq (1):

    U1 + V1 = Rs.2667 (C11)................................................. (1)11

    100 50

    150 50

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    U1 + V2 = Rs.3781(C12). (2)

    U2 + V2= Rs.3760(C22).. (3)

    U2 + V3 = Rs.4500(C23). (4)

    U3 + V3= Rs.4267(C33).. (5)

    Since, there are five equations and six unknowns (because we added a non basic variable). Tosolve these equations, it is necessary to assign only one of the unknown a value of zero. Wecan arbitrarily assign a value to one of the unknown. A common method is to choose the rowwith the largest number of allocations i.e. (U1= 0).

    Using substitute calculates the Basic Variables:

    Basic Variables: ( U1= 0, U2= -21, U3= -254 and V1= 2667, V2=3781, V3=4521)

    To recognize whether this tableau represents the Optimal Solution;

    For every Non basic Variable (those cells without any allocations)

    Cij Ui Vj = K ij > 0..eq (2) (represent Non-Basic Variable)

    For cell (1, 3) C13 U1 V3 = K 13= 4.eq (a)

    For cell (2, 1) C21 U2 V1= K 21= 122..........................................eq (b)

    For cell (3, 1) C31 U3 V1= K 31 = 1060.......................................eq (c)For cell (3, 2) C32 U3 V2 = K 32 = 108.........................................eq (d)

    Non Basic Variables: ( K 13= 4, K 21= 122, K 31 = 1060, K 32 = 108 > 0)

    Eq (2) is true in every case of eq (a), eq (b), eq (c), eq (d), because these variables aresatisfied with non negativity condition (K 13, K 21, K 31, K 32> 0). So the current tableaus(4a) represent the optimal solution and Rs.18, 84,800 is the lowest cost of

    transportation.

    Modified distributed method (MODI) for Initial tableau of the Minimum cell cost method:

    Table 3(a) Initial tableau of the Minimum cell cost method

    Vi V1 V2 V3

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    Ui Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    U1 Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    U2 Delhi Rs.2768 Rs.3760 Rs.4500 200 Units

    U3 Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    From duality theory: (source given in references)

    Ui + Vj, = Cij ..eq (1) Represent all Basic Variables

    We can compute all Ui, and Vj, values from the initial tableau (3a) using eq (1):

    (Where Ui, is the dual variable associated with row i and Vj, is the dual variable associatedwith column and Cij represent the cost of the allocation cell)

    Ui + Vj = Cij (Represent the all basic variables)

    U1 + V1 = Rs.2667 (C11)................................................. (6)

    U1+ V3 = Rs.4525(C13).. (7)

    U2 + V2= Rs.3760(C22).. (8)

    U2 + V3 = Rs.4500(C23). (9)

    U3 + V2= Rs.3635(C32).... (10)

    Such that, there are five equations and six unknowns (because we added a non basicvariable). To solve these equations, it is necessary to assign only one of the unknown a value

    of zero. (Let U1=0) because U1 has largest number of allocations.Basic Variables

    U1= 0, U2= -25, U3= -50 and V1= 2667, V2=3785, V3=4525

    To recognize whether this tableau represents the Optimal Solution;

    For every Non basic Variable (those cells without any allocations)

    Cij Ui Vj = K ij > 0.....eq (2) (represent Non-Basic Variable)

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    100 50

    50 15

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    For cell (1, 3) C13 U1 V3 = K 12= -4.... (e)

    For cell (2, 1) C21 U2 V1= K 21= 126.................................................................................. (f)

    For cell (3, 1) C31 U3 V1= K 31= 885.................................................................................. (g)

    For cell (3, 2) C32 U3 V2 = K 33 = -208............................................................................... (h)

    Non Basic Variables

    K 12= -4,K 21= 126, K 31 = 856, K 32 = -208

    Eq (2) is true in the case of eq (f) and eq (g) i.e. (K 21= 126 >0, K 31= 885>0)

    Eq is not true in the case of eq (e) and eq (h) i.e. (K 12= -4 < 0, K 33 = -208 < 0) thiscondition does not satisfies with the non negativity conditions, so the current tableau (..)does not represent the optimal solution.

    Stepping Stone Method

    Table 3(b)

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    Delhi Rs.2768 Rs.3760 Rs.4500 200 Units

    Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    For simplex (Minimization Problems), Chose the most negative reduced costK 33= -208determined by cell (3, 3) as the new entering variable to reduce the cost by allocating this cell(3, 3) and to increase the value as much as possible so place the (+) in this cell (3, 3). (Thestepping stone path for this cell (3, 3) is (2, 2), (2, 3), (3, 2), (3, 3) Table ()). For equilibriumin everything place (-) in the cell (2, 3) and place (+) in cell (2, 2), this indicate the equality inthis row and then Place (-) in cell (3, 2). The allocations in cell (2, 3) and cell (3, 2)(subtraction cells) are 150 and 150 respectively. Thus the new solution is obtained byreallocating 150 on the stepping stone path. Thus for the next tableau:

    X 33 = 0 + 150 = 150 (0 is its current allocation)14

    100 50

    50 15

    150

    -4

    126856

    -208

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    X 23 = 150 - 150 = 0

    X 22 = 50 + 150 = 200

    X 32 = 150 - 150 = 0 (blank for the next tableau)

    Table 3(c)

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    Delhi Rs.2768 Rs.3760(+)

    Rs.4500(-)

    200 Units

    Kanpur Rs.3473 Rs.3635(-) Rs.4267(+) 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    Table 3(d)

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2667 Rs.3781 Rs.4525 150 Units

    Delhi Rs.2768 Rs.3760 Rs.4500 200 Units

    Kanpur Rs.3473 Rs.3635 Rs.4267 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    Modified distributed method (MODI)

    Table 3(e)

    15

    -4100 50

    50 15126

    150856

    -208

    100

    20

    150

    50

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    Cij Ui Vj = K ij ..eq (2) empty cell (represent non-basic variable)

    C12 U1 V2 = K 12= 0.. (i)

    C21 U2 V1= K 21= 0........................................................................................................... (j)

    C23 U2 V3= K 23= 0........................................................................................................... (k)

    C31 U3 V1= K 31 = 0........................................................................................................... (l)

    C32 U3 V2 = K 32 = 0.......................................................................................................... (m)

    Analysis:

    Basic Variables

    U1= 0, U2= -851, U3= -146 and V1= 3619, V2=3781, V3=5351Non Basic Variables

    K 12= K 21= K 23= K 31= K 32= 0

    K ij = 0 the solution is optimal and unique and this satisfied the non negativity conditionfor the transportation problem.

    Total transportation cost:

    2667X 11 + 3760X 22 + 4525X 32 +4267X 33

    2667(100) + 3760(150) + 4525(50) +4267(150) = Rs.1086160

    SENSITIVITY ANALYSIS

    Sensitivity Analysis investigates the change in the optimum solution resulting from making

    changes in parameters of the linear programming of transportation problem, So the changes

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    in coefficients of (Cij) Cost Factors (Transportation Cost @ Rs. 180.00 per km, Insurance @2.7%, Tax- Toll Tax, Excise Duty @ 3%Warehouse Charges, And Unloading Charges) of the

    Objective Function:

    Minimize C = 2970.80X 11 +3005.00X 21 +3665.00X 31 + 5349.40X 12 + 5315.60X 22 +5105.40X 32 + 6628.80X 13 +6597.00X 23 +6387.20X 33

    Table (1a)

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2970.80 Rs.5349.40 Rs.6628.80 150 Units

    Delhi Rs.3005.00 Rs.5315.60 Rs.6597.00 200 Units

    Kanpur Rs.3665.00 Rs.5105.40 Rs.6387.20 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    NW Corner Method:

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2970.80 Rs.5349.40 Rs.6628.80 150 Units

    Delhi Rs.3005.00 Rs.5315.60 Rs.6597.00 200 Units

    Kanpur Rs.3665.00 Rs.5105.40 Rs.6387.20 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    The initial basic feasible solution is:

    2970.80X11 +5349.40X12 + 5315.60X22 + 6597.00X23 +6387.20X33

    2970.80(100) +5349.40(50) + 5315.60(150) + 6597.00(50) +6387.20(150) = Rs.26181440

    18

    10 50

    15 50

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    Minimum Cell Cost Method:

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2970.80 Rs.5349.40 Rs.6628.80 150 Units

    Delhi Rs.3005.00 Rs.5315.60 Rs.6597.00 200 Units

    Kanpur Rs.3665.00 Rs.5105.40 Rs.6387.20 150 Units

    Demand 100 Units 200 Units 200 Units 500 Units

    The initial basic feasible solution is:

    2970.80X11 +5315.60X22 + 5105.40X32 + 6628.80X13 +6597.00X23

    2970.80(100) +6628.80(50) + 5315.60(50) + 6597.00(150) +5105.40(150) = Rs.2649680

    VAM:

    Penalty 34.20 210.20 421.00

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply Penalty Penalty

    Ghaziabad Rs.2970.80 Rs.5349.40 Rs.6628.80 150 Units 2378.80 1279.80

    Delhi Rs.3005.00 Rs.5315.60 Rs.6597.00 200 Units 2310.60 1281.40

    Kanpur Rs.3665.00 Rs.5105.40 Rs.6387.20 150 Units 1440.40 1070.60

    Demand 100 Units 200 Units 200 Units 500 Units

    The initial basic feasible solution is:

    2970.80X11 + 5315.60X22 + 6628.80X13 +6387.20X33

    2970.80(100) +6628.80(50) + 5315.60(200) +6387.20(150) = Rs.2681060

    Northeast cost, total cost = Rs.2618140 19

    10 50

    50 15

    15

    100 50

    200

    15

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    The min cost, total cost = Rs.2649680

    VAM, total cost = Rs.2681060

    And now, to obtaining optimal solution select the Minimum Cell Cost Method tableau

    Modified distributed method (MODI) for Initial tableau of the Minimum cell cost method:

    Warehouse(i)/Stores(j)

    Dehradun Mumbai Chennai Supply

    Ghaziabad Rs.2970.80 Rs.5349.40 Rs.6628.80 150 Units

    Delhi Rs.3005.00 Rs.5315.60 Rs.6597.00 200 Units

    Kanpur Rs.3665.00 Rs.5105.40 Rs.6387.20 150 Units

    Demand 100 Units 200 Units 100 Units 500 Units

    Basic Variables

    U1= 0, U2= -31.80, U3= -242 and V1= 2970.80, V2=5347.40, V3=6629.20

    Non Basic Variables

    K 12= 2,K 21= 66, K 31 = 836.20, K 33 = .40

    K ij > 0 the solution is optimal and unique and this satisfied the non negativity conditionfor the transportation problem, therefore an optimal basic feasible solution willmaintain its optimality if the change in C ij.

    CONCLUSION

    .The LCD-TV market will continue to grow robustly during the downturn in2009; the operational and financial challenges caused by the recession are

    forcing many OEMs to reconsider their internal expansion plans and20

    10 50

    50 15

    15

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    outsourcing strategies, as well as to initiate changes that are having animmediate impact on the supply chain

    Sony believes that cooperation as true partners is critical to supplying productsthat achieve high levels of customer satisfaction. Sony and its suppliers work together in a wide range of areas - by combining technological skills thatcomplement each other, building powerful supply chains, preserving andenhancing the quality of parts, strictly complying with relevant laws andregulations and contributing to society as a whole.

    In this paper, a particular method for evaluating the sensitivity analysis of supply and demand values was presented.Supposing the balance in the algorithms of transportation problems, thesensitivity analysis of transportation problems is, in one hand, a simultaneousanalysis of right-hand-side parameters and on the other hand, theimplementation of the balanced equation. Like a constraint, this balanced

    equation directly affects the parameters whose changes are important. Thus, inthe sensitivity analysis of supply and demand in transportation problem,because of the functional relation between supply and demand parameters, wealways face the simultaneous changes of parameters.

    REFERENCES

    S.D.Sharma, Operation Research,(Theory, Methods and Applications),

    2009, pg.TP.1-TP8121

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    Ford, L.R., and D.R. Fulkerson,Flows in networks , Princeton Univ.Press, 1962.

    H. Arsham, A.B. Kahn,Simplex-type algorithm for generaltransportation problems

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    costs , Ph. D. Thesis, Faculty of Economics, University of Zagreb, Zagreb

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    programming/cplex90/amplcplex90userguide.pdf Hamdy A Taha, 1997,Duality and Sensitivity Analysis , pg. no. 115-

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    arms-security-sets-with-network-functions-digital-

    recorders.html#ixzz0ZVBqpMTW

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    http://www.rpi.edu/dept/math/math-programming/cplex90/amplcplex90userguide.pdfhttp://www.rpi.edu/dept/math/math-programming/cplex90/amplcplex90userguide.pdfhttp://www.rpi.edu/dept/math/math-programming/cplex90/amplcplex90userguide.pdfhttp://www.rpi.edu/dept/math/math-programming/cplex90/amplcplex90userguide.pdfhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTWhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTWhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTWhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTWhttp://www.rpi.edu/dept/math/math-programming/cplex90/amplcplex90userguide.pdfhttp://www.rpi.edu/dept/math/math-programming/cplex90/amplcplex90userguide.pdfhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTWhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTWhttp://www.faqs.org/abstracts/Electronics-and-electrical-industries/Sony-arms-security-sets-with-network-functions-digital-recorders.html#ixzz0ZVBqpMTW