A company supplies goods to three customers, who each require 30 units. The company has two warehouses. Warehouse 1 has 40 units available, and warehouse 2 has 30 units available. The costs of shipping 1 unit from warehouse to customer are shown in Table.
TO
From
Customer 1
Customer 2
Customer 3
Warehouse 1
$15
$35
$25
Warehouse 2
$10
$50
$40
There is a penalty for each unmet customer unit of demand: With customer 1, a penalty cost of $90 is incurred; with customer 2, $80; and with customer 3, $110. suppose that extra units could be purchased and shipped to either warehouse for a total cost of $100 per unit and that all customer demand must be met. Formulate a balanced transportation problem to minimize the sum of purchasing and shipping costs.
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