Input: Costs, Capacities, Demand

Variable Production & Shipping Cost ($/Unit)

Supply Region NE SE
Kentucky 185 180
Pennsylvania 170 190
N.Carolina 180 180
California 220 220
Demand 700 400
Increased Demand 910 520

Decision Variables
Demand Region - Production Allocation (Million Un
Supply Region NE SE
Kentucky 0 0
Pennsylvania 910 0
N.Carolina 0 520
California 0 0

Unmet Demand 0 0
 Variable Production & Shipping Cost ($/Unit)
MW S W
175 175 200
180 200 220
185 185 215
195 195 175
400 300 600
520 390 780

Demand Region - Production Allocation (Million Units

MW S W
0 190 0
0 0 0
0 0 0
520 200 780

0 0 0
Annual Fixed Cost ($) Annual Capacity
150 1000
200 1500
150 1500
150 1500

Decision
Plants (1=open) Production Capacity Annual Fixed Cost ($)
1 190 1000 150
1 910 1500 200
1 520 1500 150
1 1500 1500 150
 Cost Revenue
33400 190000
154900 910000
93750 520000
277050 1500000
Profit before tax Total tax Profit after tax
156600 42282 114318
755100 203877 551223
426250 115088 311163
1222950 269049 953901

Maximum Profit 1930605