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Transportation Model Introduction What: Solving problems of transportation Where: Moving goods between locations Why: To optimize transportation costs Developing an Initial Solution Northwest Corner Rule Intuitive Lowest Cost Evaluating the Solution Stepping Stone Method Calculate an improvement index for any empty squares If all indices are greater than or equal to zero, the solution is optimal If not, change the solution and reevaluate Supply and Demand Demand not equal to supply? Use a dummy source or dummy destination Degeneracy – too few routes used Test: occupied squares equal to rows + columns - 1