Allocation of resources on a minimized cost basis

A method for accurately forecasting the regional energy demand in terms of demand for each resource and further allocating the available resources to the various demand points at a minimized cost is studied. The model utilizes the present supply of all the available resources, the cost functions of each resource, the net regional products and the present demand per resource at each demand point. The optimal allocation of each resource from supply points to demand points represents the Hitchcock - Koopmans transportation model which can be stated as follows: "Given a number of supply sources (S1, S2,..., Si,..., SM) and a number of demand points (D1, D2,..., Dj,..., DN), each source Si having a quantity qi which has to be transported to various demand points in such a way that the total quantity arriving at Dj fulfills the demand dj + Rj d. Also, given the shipping cost of a unit quantity of the resource, and the distances involved, the object is to determine the allocation of resources which minimizes the total cost".