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3. Determine the optimal transportation cost for the given transportation matrix using
NW corner for initial solution and stepping stone method for optimization.
D E F G Supply
A 11 13 17 14 250
B 16 18 14 10 300
C 21 24 13 10 400
Demand 200 225 275 250
J1 J2 J3 J4 J5
M1 5 3 9 1 4
M2 2 5 10 3 8
Part – C
7. A firm is considering the replacement of a machine, whose cost price is Rs 10,500 and its
scrap value is Rs 500. From experience the running (maintenance and operating) costs
are found to be as follows:
Year 1 2 3 4 5 6 7 8 9 10
Running Cost 100 400 700 1000 1500 2000 3000 4000 4500 5000
When should the machine be replaced?