Warehouse Distribution Cost Analysis
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ScribdTranslationsWarehouse Distribution Cost Analysis
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ScribdTranslationsA computer distribution company has 4 warehouses, and wishes to distribute to 4
different districts of the city, (La Victoria, La Molina, Los Olivos, and Surco), in each deposit
The following quantities are given: 120, 100, 80, 75, respectively. And it needs to be distributed.
siguientes cantidades: 60, 140, 75, 100.
The transportation costs from each warehouse to each destination are as follows:
TABLE No. 01
The Victory The Mill The Olives Surco
Deposit 1 20 30 40 60
Deposit 2 10 50 80 30
Deposit 3 60 50 10 40
Deposit 4 40 50 50 30
Solution:
To start solving, it is necessary to verify that the quantity of the demand is equal to the
quantity of the offer:
120+100+80+75=375
60 + 140 + 75 + 100 = 375
Now we take into account the 3 necessary steps for the Northwest Corner method:
Step 1. Select the cell in the northwest corner (top left corner) for a shipment.
Step 2. Make the largest shipment you can in the northwest corner cell. This
operation will completely exhaust the availability of supplies at a source to the
demand requirements at a destination.
Step 3. Correct the supply and requirements numbers to reflect what is remaining.
of supply and demand and return to step 1.
Next, we will complete the table as follows.
La Victoria La Molina The Olives Surco Offer
Deposit 1 120
Deposit 2 100
Deposit 3 80
Deposit 4 75
Demand 60 140 75 100
We started filling in the table from the NorthWest corner.
The Victory La Molina The Olives Surco Offer
Deposit 1 60 60 120
Deposit 2 80 20 100
Deposit 3 55 25 80
Deposit 4 75 75
Demand 60 140 75 100
As a Final Result of the table we have:
The Victory The Molina The Olives Surco Offer
Deposit 1 60 60 0 0 120
Deposit 2 0 80 20 0 100
Deposit 3 0 0 55 25 80
Deposito 4 0 0 0 75 75
Demand 60 140 75 100
To determine the cost needed, we multiply the previous table by TABLE No. 01:
The Victory The Mill The Olives Surco
Deposit 1 60 (20) 60 (30) 0 0
Deposit 2 0 80 (50) 20 (80) 0
Deposit 3 0 0 55 (10) 25 (40)
Deposit 4 0 0 0 75 (30)
We have a total cost = S/. 12,400.00
As we mentioned, this method does not take into account the cost, so for sources and
for destinations that are not so numerous, it is preferable to use other methods that have lower costs.
optimal.