In: Finance
Part I. PROBLEM SOLVING
Direction: In each of the items below, provide the details/data required
A concrete company transports concrete from three plants 1, 2, and 3, to three constructions sites A, B, C and D with the following details;
Cost From / To |
A |
B |
C |
D |
Total Supply |
1 |
19 |
30 |
50 |
10 |
7 |
2 |
70 |
30 |
40 |
60 |
9 |
3 |
45 |
8 |
70 |
20 |
18 |
Total Demand |
5 |
8 |
7 |
14 |
34 |
Requirements;
Under Least Cost Transportation Method Total Cost is 829
For Stepping Stone Method We should Proceed with Vogels Approximation Method . Vogels Approximation method table is used for Stepping Stone Method Calculation
Under Vogels Approximation Method Total Cost is 779
Finally that cost is reduced to 743 by using Stepping Stone Method