Quantative Methods

| December 9, 2017

The stepping stone method is being used to solve a transportation problem. There is only one empty cell having a negative improvement index and this index is -2. The stepping stone path for this cell indicates that the smallest quantity for the cells with minus signs is 80 units. If the total cost for the current solution is $900, what will the total cost be for the improved solution? What can you conclude about how much the total cost will decrease when developing each new solution for any transportation problem. (hint: Each negative index computed by the stepping stone method represents the amount by which total transporation costs could be decreased if 1 unit or product were shipped on that route (unused cell).

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