Posted in Operations and Supply Chain Terms, Total Reads: 5257
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
S1 = 1000 units
S2 = 1400 units
S3 = 1700 units
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.