Least Cost Cell First Method

Posted in Operations and Supply Chain Terms, Total Reads: 5489
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Definition: Least Cost Cell First Method

This is one of the five methods for obtaining initial basic feasible solution for transportation problems in operations, where more than one supply centers and demand centers are there and the aim is to achieve least cost of transportation.

Example: Let there are three supply points (S1, S2, and S3) and three demand points (D1, D2, D3) with their supply and demand units given. Each cell has mentioned in it the cost involved in transporting goods from supply to demand point.

 

 

D1= 1300 units

D2 = 1900

D3=  900

S1 = 1000 units

Rs 800

Rs1200

Rs 700

S2 = 1400 units

Rs 500

Rs 750

Rs 650

S3 = 1700 units

Rs 1000

Rs 950

Rs 1100

 

Steps:

1. Identify the least cost cell, D1-S2. Allocate the maximum possible (lower of supply and demand) , i.e, 1300 units. Cross D1 column.

2. Move to the next lowest cell cell, i.e, D3-S2. Allocate maximum possible, which is 100 units.

3. Keep on repeating this until all the demand points requirements is met.

 

 

D1= 1300 units

D2 = 1900

D3=  900

S1 = 1000 units

Rs 800; 0 units

Rs1200; 200 units

Rs 700; 800 units

S2 = 1400 units

Rs 500; 1300 units

Rs 750; 0 units

Rs 650; 100 units

S3 = 1700 units

Rs 1000; 0 units

Rs 950; 1700 units

Rs 1100; 0 units


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