Inputs - Costs , Capacities , Demands All cost are in thousand

Demand Region Production & Transportation Cost per 1000000 Units Fixed
Supply Region N. America S. America Europe Asia Africa Cost
N. America 81 92 101 130 115 6000
S. America 117 77 108 98 100 4500
Europe 102 105 95 119 111 6500
Asia 115 125 90 59 74 4100
Africa 142 100 103 105 71 4000
Demand 12 8 14 16 7

Decision Variables
Demand Region Production Allocation (1000 Units) Plants
Supply Region N. America S. America Europe Asia Africa (1=open)
N. America 0 0 0 0 0 0
S. America 0 0 0 0 0 0
Europe 0 0 0 0 0 0
Asia 0 0 0 0 0 0
Africa 0 0 0 0 0 0

Constraints
Supply Region Excess Capacity
N. America 0
S. America 0
Europe 0
Asia 0
Africa 0
N. America S. America Europe Asia Africa
Unmet Demand 12 8 14 16 7

Objective Function
Cost = 0
Low Fixed High
Capacity Cost Capacity
10 9000 20
10 6750 20
10 9750 20
10 6150 20
10 6000 20

Plants Conventions
(1=open) y(i) = 1 if plant (i) is open else 0
0 K = potential capacity
0 x(ij) = quantity shipped from plant (i) to market (j)
0 D = Annual Demand
0 f is the fixed cost
0 C is cost of producing & shipping

The objective function minimizes (fixed + variable)

Min Sigma(f*y) + Sigma (c*x)

Constraint

Sigma x(ij) = D Demand at each region should be satisfied

Sigma x(ij) <= K*y No plant can supply more than the capacity
Locations of supply chain sources and markets for steel appliances

Sources/ $/Ton Tons

Markets Mile Fn Dn Xn Yn dn
Buffalo 0.9 500 700 1200 1389
Sources Memphis 0.95 300 250 600 650
St.Louis 0.85 700 225 825 855
Atlanta 1.5 225 600 500 781
Boston 1.5 150 1050 1200 1595
Markets Dallas 1.5 250 800 300 854
Detroit 1.5 175 925 975 1344
Newyork 1.5 300 1000 1080 1472

Cost= 3277110

X= 0.0
Y= 0.0
Phase 1 Define the Supply Chain Strategy Whether Supply Chain will be performed in-house or outsour

Phase 2 Define the regional Configuration Identify regions where facilities will be located

Phase 3 Select desirable Site potential sites Select potential sites within each region where facilities are to

Phase 4 Locations Choices Select precise location & capacity allocation for each facility
erformed in-house or outsourced

will be located

h region where facilities are to be located

ty allocation for each facility