Stepping stone method, Operation Management

Assignment Help:

Stepping Stone Method:

Continue the above example containing the initial basic feasible solution obtained by least cost rule. In this there six empty cell :91,1) )1,2,) )1,3),(2,3) (,2,4)and (3,2). To start with let us assess the potential for improvement of the non basic variable( 1,1). A shipment of one unit of the item on this route would mean an increase of Rs. 3 but also will mean reduction of one unit from cell( 1,4) and there by a reduction or Rs( 3,1 ) and add one unit cell ( 3, 4). This has the effect of this operation would be an increase of Rs. 3 in the cost. It is shown as follows:

Increase in cost by increasing cell(1,1) by 1 unit = + 3
Decrease in cost by decreasing cell ( 1,4) by 1 unit = -2
Increase in cost by increasing cell ( 3,4,) by1 unit = + 3
Decrease in cost by decreasing cell ( 3,1,) by 1 unit = -2

+ 2
An increase in the cost of Rs. 2 per unit can be affected by adopting the route AX. Implies that the opportunity cost of this route is - 2.
If we consider the empty cell ( 1,3) then the closed loop is formed by cells( 1,4) ( 3,3),and ( 3,4).

Now if one unit is transferred from cell (1,4) to cell (1,3) then adjustments have to be made in cells ( 3,4) and (3,3) so that demand restriction is not violated. In case of transferring one unit the new adjustment allocation for these cells will thus becomes the changes in cost by one unit of such transfer is 5-4-2+3= Rs2, which is positive. This is the per unit opportunity cost for cell ( 1,3).
(1,3) (1,4)
.........................

 

.........................
(3,3) (3,4)

In this way opportunity cost can be calculated for all the empty cells. If opportunity cost for all the cells is negative, then it implies that existing solution is optimal and there is no scope for improvement. But if opportunity cost for one or more unoccupied cells is positive then the most positive opportunity cell is selected for allocation and maximum possible allocation is made in this cell making necessary adjustment s in the allocation of the other occupied cells. Again the optimality is tested. The process till an optimal solution is obtained.


Related Discussions:- Stepping stone method

Explain competencies required of hr management, Review the competencies req...

Review the competencies required of HR management and recommend at least two additional areas in which HR managers should be competent. Provide specific examples to support your re

Explain the features of six sigma, Question 1: Explain the features o...

Question 1: Explain the features of Six Sigma. • shifts the paradigm quality as the cause of good business performance • The philosophy is to make fewer mistakes. • Is a

Explain the two main types of financing, How have globalization and informa...

How have globalization and information technology created new opportunities for entrepreneurs? Describe current demographic trends that suggest new goods and services for entrepren

Explain what is the glass ceiling, What is the glass ceiling, and why do yo...

What is the glass ceiling, and why do you think it has proven to be such a barrier to women and minorities?

Calculate the annual total cost, ABC Aircraft uses 2,000 drill bits annuall...

ABC Aircraft uses 2,000 drill bits annually. Each drill bit costs $50 and each order ABC places costs $30. The annual carrying rate is 20% of unit cost. ABC has contracted with the

Define how the data resource management methods need, Discuss how the data ...

Discuss how the data resource management methods of today will need to evolve as more types of data emerge. Why the role of a data steward is considered innovative? Explain.

Explain the best way to handle the situation in the future, How is Microsof...

How is Microsoft and other software manufacturers combating the threat of open source software and other free tools that compete with its commercial products? Do you think that thi

Comparisons between costs of a product in different periods, Ques: How can ...

Ques: How can we make comparisons between the cost of a product in two different periods if salaries and cost of living may have changed? Ans: The average income is published in

Compute the answers for the missing cells in the table, Process Analytics C...

Process Analytics Case let 1 Overview respond to this case let, which is based in a health care setting.. Preparation Read through the following case let. You are an operations man

Explain functions of marketing management, Explain functions of marketing m...

Explain functions of marketing management. Functions of Marketing Management: The broad functions of marketing management includes as in following : (i) Marketing Research

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd