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The
company will manufacture the new items at its three plants, P1, P2 and P3, which
have annual production capacities of 1500, 2000 and 1000 with unit production costs
of $4, $3 and $2 respectively. The product will be distributed through the companys
two warehouses W1 and W2, which involve unit-handling costs of $3 and $4
respectively. Customer demand is concentrated in three main shopping centers located
at S1, S2 and S3. With estimated annual requirements of 1000, 1200 and 900
respectively. The unit transportation costs (in $) from plant to warehouse and unit
delivery coats from warehouse to customer are given in the table.
P1
P2
P3
W1
12
W2
S1
S2
S3
Answer:
The new items are manufacturing at three plants plant1 (P1), plant2 (P2), plant3 (P3),
whereas distribution is done through companys warehouses that are warehouse1
(w1), Warehouse2 (W2). As we know that the Customer demand is concentrated in
three main shopping centers Shopping1 (S1), Shopping (S2), Shopping3 (S3).
Plant
Production Capacity
Unit Cost
P1
P2
P3
1500
2000
1000
$4.00
$3.00
$2.00
Warehouse
W1
W2
P1
P2
P2
P3
P3
w1
w1
w1
w2
w2
S1
S2
S3
1000
1200
900
P1
P2
P3
T
o
w
1
w
2
w
1
w
2
w
1
w
2
S
1
S
2
S
3
S
1
S
Demand
P1
P2
P3
Fro
m
P1
Shop
Unit
Cost
13
p1
p2
p3
-1
-1
10
S3
0
0
900
W2
1100
0
1000
w
2
0
s1
s2
s3
w
1
1
Optimal Unit
Cost
0
1100
-1
1000
-1
14
-1
-1
1000
-1
1000
-1
12
-1
-1
-1
1200
w2
2
S
3
12
Actual
110
0
150
0
Constrai
nts
100 100
0
0
200 100
0
0
Supply
-1
100 120
0
0
90
0
100 120
0
0
90
0
900
Demand