Consider the Transportation Problem and Its Initial Solution in the Table

question 47

Multiple Choice

Consider the transportation problem and its initial solution in the table below. What is the improvement index for the empty cell Source 1 - Destination 3? $\begin{array}{|l|r|r|r|r|r|}\hline \text { COSTS } & \text { Dest. 1 } & \text { Dest. 2 } & \text { Dest. 3 } & \text { Dest . 4 } & \text { Supply } \\\hline \text { Source 1 } & 12 & 18 & 9 & 11 & 45 \\\hline \text { Source 2 } & 19 & 7 & 30 & 15 & 145 \\\hline \text { Source 3 } & 8 & 10 & 14 & 16 & 50 \\\hline \text { Demand } & 80 & 30 & 70 & 60 & 240 /240 \\\hline\end{array}$

$\begin{array}{|lrrrrr|}\hline \text { Shipments } & \text { Dest. 1 } & \text { Dest. 2 } & \text { Dest. 3 } & \text { Dest 4 } & \text { Row Total } \\\text { Source 1 } & 45 & 0 & 0 & 0 & 45 \\\text { Source 2 } & 35 & 30 & 70 & 10 & 145 \\\text { Source 3 } & 0 & 0 & 0 & 50 & 50 \\\text { Col. Total } & 80 & 30 & 70 & 60 & 240/240 \\\hline\end{array}$

• A) 0
• B) -14
• C) -23
• D) -70
• E) 115

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Definitions:

Short-Term Investments

Investments that are made with the expectation of converting them into cash within a short period, usually one year or less.

Net Receivables

the total amount of money owed to a company by its customers minus any amounts that are expected to be uncollectible.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business, whichever is longer.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with its most liquid assets, excluding inventory.