Four suppliers have submitted sealed bids that quote the price per case of harinets delivered to four regional stores of the army. The bids are summarized in the following table. The regional store’s requirements as well as the supplying capacities of the suppliers are shown. Supplier 4 has quoted for only region 1. Because of previous contractual obligations, region 3 will have to get a minimum of 2,000 cases from supplier 2. Supplier Region Max. supply (cases) R1 R2 R3 R4 S1 30 25 40 35 800 S2 35 32 38 40 1,000 S3 28 30 35 38 1,500 S4 25 - - - 600 Required (cases) 1,000 800 1,200 750
i. Formulate this problem as a transportation model including all the constraints. ii. Find the initial basic solution using V.A.M.
iii. Use MODI method to establish whether the above solution obtained is optimal or not.