Problem Solving

1. The ROV Company has just been awarded an engine development contract. The
contract terms require that at least five other smaller companies be awarded
sub-contracts for a portion of the total work. So ROV bids from five small
companies (A, B, C, D and E) to do sub-contract work in five areas (V, W, X, Y,
Z).

V W X Y Z

A 45 60 75 100 30

B 50 55 40 100 45

C 60 70 80 110 40

D 30 20 60 55 25

E 60 25 65 185 35

V W X Y Z

A 15 30 45 70 0

B 10 15 0 60 5

C 20 30 40 70 0

D 10 0 40 35 5

E 35 0 40 160 10

V W X Y Z

A 5 30 45 35 0

B 0 15 0 25 5

C 10 30 40 35 0

D 0 0 40 0 5

E 25 0 40 125 10
 V W X Y Z

A 0 30 40 30 0

B 0 15 0 25 10

C 5 30 35 30 0

D 0 5 40 0 10

E 20 0 35 120 10

V= A= 45
W= E= 25
X= B= 40
Y= D= 55
Z= C=40
Total = 205,000

Recommendation: It is recommended that company V will sub-contract work in area A,

company W will sub-contract work in area E, company X will sub-contract work in area
B, company Y will work in sub-contract work in area D, and company Z will work in
sub-contract work in area C.

2. There are four jobs to be assigned to the machines. Only one job could be
assigned to one machine are given in following matrix.

Job A B C D E

1 4 3 6 2 7

2 10 12 11 14 16

3 4 3 2 1 5

4 8 7 6 9 6
 A B C D E

1 2 1 4 0 5

2 0 2 1 4 6

3 3 2 1 0 4

4 2 1 0 3 0

A B C D E

1 2 0 4 0 5

2 0 1 1 4 6

3 3 1 1 0 4

4 2 0 0 3 0

A- 2= 10
B- 1=3
C- 4=6
D- 3=1
E- 0
Total=20
Recommendation: Machine A will do the job 2, machine B will do the job 1,
machine C will do the job 4, machine D will do the job 3 and machine E will not
do any job.

3. ABC Enterprises manufactures chairs in four locations and sells to four major
customers. In the next production period, plants 1, 2, 3 and 4, will produce 50,
50, 45 and 45 tables respectively. The demand requirements of customers A, B,
C and D are 30, 40, 40 and 40 respectively. Find the minimum transportation
costs if costs are as follows: from plant 1 to customers A, B, C and D are P20,
P10, P20 and P40; from plant 2, P20, P40, P30 and P20: from plant 3, P20, P30,
P40, P10: and from plant 4, P40, P30, P20 and P40, respectively.

RA RB RC RD S
 P1 30 (20) 20(10) (20) (40) 50

P2 (20) 20(40) 30(30) (20) 50

P3 (20) (30) 10(40) 35(10) 45

P4 (40) (30) (20) 5 (40) 45

D (30) (40) (40) (40)

`600+ 200+800+900+400+350+200= 3,450

P1RC= 20- 30 + 40-10 = 20
P1RD = 40-10 + 40-30 + 40-10 = 90
P2RA = 20-20 + 10-40 = -30
P2RD = 20 - 10 + 40-30 = 20
P3RA = 20-20 + 10-40 + 30 - 40 = -40
P3RB = 30-40 + 30-40 = -20
P4RA = 40-20 + 10-40 + 30-40 + 10-40 = -50
P4RB= 30-40 + 30-40+ 10-40 = -50
P4RD= 20-40 + 10-40 = -50

RA RB RC RD S

P1 30 (20) 20(10) (20) (40) 50

P2 (20) 20(40) 30(30) (20) 50

P3 (20) (30) 5 (40) 40 (10) 45

P4 (40) (30) 5 (20) (40) 45

D 30 40 40 40

600+200+800+900+200+400+100 = 3,200

P1RC= 20-30 + 40-10= 20

P1RD= 40-10 + 40-30+40-10 = 70
P2RA= 20-20 + 10-40 = -30
P2RD= 20–10 + 40–30= 20
P3RA = 20–20 + 10–40 + 30-40 = –40
P3RB = 30–40 + 30–40 = –20
P4RA= 40–20 + 10–40 + 30–20 = 0
P4RB = 30–40 + 30–20 = 0
P4RD = 40–10 + 40–20 = 50

RA RB RC RD S

P1 25 (20) 25(10) (20) (40) 50

P2 (20) 15(40) 35 (30) (20) 50

P3 5 (20) (30) (40) 40 (10) 45

P4 (40) (30) 5 (20) (40) 45

D 30 40 40 40

500+250+600+1,050+100+400+100 = 3,000

Recommendation: Plant 1 will make 25 tables for requirement A, and 25 tables for
requirement B, Plant 2 will make 15 tables for requirement B, and 35 tables for
requirement C, Plant 3 will make 5 tables for requirement A, and 40 tables for
requirement D, and Plant 4 will make 5 tables for requirement C.

4. XYZ Inc. has two factories with weekly production rates of 40 and 20 widgets.
These widgets must be shipped to three warehouses that have a demand of 25,
10, and 25 units. The cost to ship between each location is known (see the grid
below). Which factory should produce and ship how many widgets to which
warehouses to meet the demand at each location with minimal cost?

W1 W2 W3 S

FA 25 (550) 10 (300) 5 (400) 40

FB (350) (300) 20 (100) 20

 D 25 10 25

13,750 + 3,000 + 2,000 + 2,000 = 20,750

FB-W1 = 350 - 550 + 400 - 100 = 100

FB-W2 = 300 - 300 + 400 - 100 = 300

Recommendation: To meet the demand at each location with a minimal cost of P20,750
Factory A will produce and ship 25 widgets to Warehouse 1, 10 widgets to Warehouse
2, and 5 widgets to Warehouse 3. Factory B will produce and ship 20 widgets to
Warehouse 3.