Question

a. Is the transportation model an example of decision making under certainty or decision making under uncertainty? Why? a. What is a balanced transportation model? Describe the approach you would use to solve an unbalanced model? 2.What is the minimal-spanning tree model? Give several examples of problems that can be solved using this type of model. 3.What is the maximal-flow model? What types of problems can be solved using this type of model? 4.Describe a problem that can be solved using the shortest-path model.

***Please no handwriting**

Answer 1

Is the transportation model an example ot decision making under certainty or decision making under uncertainty? Why?

Answer- The Points for making decision are:

1. Certainty

2. Uncertainty

Decisions which are made under certainty or uncertainties is based on persons feelings and their experience

When we know all information about the alternatives and from all the given alternatives we choose the best one that is called certainty in decision making Certainty .We consider certainty when a complete feeling that that the answer for the question is complete confidence in a single answers.

For Example, suppose we have to take a decision for installing a new piece of machinery or giving the promotion to the employee to upper position for increasing the level of certainty

Than always there is some level of uncertainty is there about the outcome coming in the future means to take the decisions with more clarity and the problem can be solved, the economist must see all the alternatives for solving the problem. When we don’t know the information about all the alternatives and we don’t have any idea that what to do, we choose on random basis that is called uncertainty in decision making.

Under certainty a decision means when there are many things which are not known to the analyst that what is going to be happened in the future. The uncertainty arises when we don'tknow the future or don’t know about the future outcomes which can be happened. Uncertainty is examined by analyst when the particular question arises and we don’t have or we can’t give a single answer with full confidence. For Example, when the organization going to launch a new product, following points can be influenced by such factors:

1. as the reaction of the competitors,

2. Technological Changes.

3. Changes in customer demand

4. Economic changes

5. Government Legislation

These are the types of challenges which have to face by them. These types of decisions are faced the by the organizations. There are two major models for taking the decision:

1. The Classical Model

2. The Administrative Model.

The small business managers have to see the following points:

1. Less time for research

2. Doesn’t need an analysis

3. Can accept the risks.

4. Can make reversible decisions.

On the other hand, large corporations may have lots of funds for research and the risk is very high and the decisions can be easily reversed and they can earn their profits. The transportation is helpful because by making a path they can determine the best path that which one is best or which path we select so that our cast and time both factors can be reduced.

The following points have been seen for selecting the best optimum path:

1. Analyses the whole path by analyst,

2. By analyses the analyst selects the best or the optimum path.

3. Then they select that path which is covered with minimum cost.

4. That path which reduce our time.

5. By seeing the all points the analyst selects the optimum path with which we can earn a higher profit.

What is a balanced transportation model? Describe the approach you would use to solve an unbalanced

model

Answer- A transportation model is important for the economist to read the model carefully, so that best way can be found by eliminating the cost and time factors. When the total demand is equal to the total supply the transportation model is balanced. If the total demand is greater than the total supply, then problem is infeasible. If the total supply is greater than the total demand, we can add the dummy demand node to create a balanced transportation model. Our goal is to select the shipping routes and units to minimize or eliminate the transportation cost. There are three factories which are supplying the units at three different warehouses. We observe all paths from factories to its demand warehouses to eliminate our cost or minimize the transportation cost.

The number of constraints in the basic transportation model is the sum of the number of the supply nodes and the number of demand nodes.

Supply Constraint = Total flow out of the Node - Total flow in the Node

Demand Constraint = Total flow into the node Total flow out of the node

We can use the approach of dummy location for solving the unbalanced model. Suppose the total supply is 750 desks and the total demand is 700 desks. Now convert an unbalanced model into balanced model by increasing the supply of 50 desks. If the, total demand is larger than the total supply; we can convert this to a balanced model by supplying value equal to the excess demand.

All supply and demand constraints can be written with sign in the model.
It the transportation models are solved by above mentioned method than it is quite common to use the alternate optimal solutions because it provides the management with greater flexibility in selecting and using resources. The balanced transportation problem is in an integer program. With this integer program, we can solve the balanced transportation problem with the help of the simplex method also.