A hospital needs to purchase 3 gallons of a perishable medic

A hospital needs to purchase 3 gallons of a perishable medicine for use during the current month and 4 gallons for use during the next month. Because the medicine is perishable, it can only be used during the month of purchase. Two companies (Daisy and Laroach) sell the medicine. The medicine is in short supply. Thus, during the next two months, the hospital is limited to buying at most 5 gallons from each company. The companies charge the prices shown in Table 10.

Formulate a balanced transportation model to minimize the cost of purchasing the needed medicine. (Use the transportation simplex method)

TABLE 10 Current Month\'s Price per Company Gallon 800 Daisy Laroach 710 Next Month\'s Price par Gallon (SO 720 750

Solution

As we need to minimize the cost. Therefore for the first month where the hospital requires 3 gallons of medicine, it should be transported from Laroach and for the second month where 4 gallons are required, the medicine should be transported from Daisy. So the minimized cost will be

3 X 710 + 4 X 720 = 5010.