OPERATIONS MANAGEMENT W/ CNCT+
OPERATIONS MANAGEMENT W/ CNCT+
12th Edition
ISBN: 9781259574931
Author: Stevenson
Publisher: MCG CUSTOM
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Chapter 11, Problem 15P
Summary Introduction

To determine: The minimum cost using transportation method.

Introduction: Aggregate planning using transportation method helps to attain minimum cost using the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.

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3. What is meant by the concept of derived demand? Why is it so important in the area of transportation for shippers and carriers? Does this concept have application in other area, give some examples? 4. Explain the difference between elastic and inelastic demand. Why are the two concepts important to transportation demand? 5. The aggregate demand for transportation service is said to be inelastic while the demand for an individual mode or carrier is often elastic. Explain why this is important to carriers and shippers. 6. Explain the concept of total landed cost as it related to transportation. How does it influence market boundaries?
2. Unbalanced. Provide the transportation model for the calculation of cost given the following data: Use the Stepping Stone Method to solve the following. Use degeneracy method or dummy method if necessary.
Suppose there is a transportation model with 4 factories and 6 warehouses. In order to develop an initial solution using the intuitive lowest cost method, do we have to add one or more dummy sources in the transportation matrix, and why?

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OPERATIONS MANAGEMENT W/ CNCT+

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