Testing the optimality, Operation Management

Step 1 : It is observed that cost of transportation is to Rs. 144.

Step 2: Testing the Optimality : After obtaining the initial basic feasible solution the next step is to test whether it is optimal or not. There are two methods of testing the optimality of basic test is a applied by calculating the opportunity cost of each empty cell. The second methods employed for testing optimality is called the modified distribution methods( MODI). This method is easier and more efficient than the stepping stone method. It is based on the concept of the dual variables that are used to evaluate the empty cells. Using these dual variable the opportunity cost of each of the empty cells is determined. The opportunity cost values in both the methods indicate the optimality or otherwise of a given solution.

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