A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this raw material, which must be shipped to three manufacturing plants. The current network has the following characteristics: $$\begin{array} { | l | r | r | r | r | }
\hline \text { COSTS } & \text { Plant 1 } & \text { Plant 2 } & \text { Plant 3 } & \text { Supply } \
\hline\text { Raw material source 1 } & \$ 6 & \$ 6 & \$ 9 & 400 \
\hline \text { Raw material source 2 } & \$ 4 & \$ 7 & \$ 3 & 600 \
\hline \text { Demand } & 500 & 500 & 500 & 1500 \backslash 1000 \
\hline
\end{array}$$ The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Set up-but do not solve-this problem as though you were going to solve it with transportation problem software.

Question

A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this raw material, which must be shipped to three manufacturing plants. The current network has the following characteristics: $$\begin{array} { | l | r | r | r | r | } 
\hline \text { COSTS } & \text { Plant 1 } & \text { Plant 2 } & \text { Plant 3 } & \text { Supply } \
\hline\text { Raw material source 1 } & \$ 6 & \$ 6 & \$ 9 & 400 \
\hline \text { Raw material source 2 } & \$ 4 & \$ 7 & \$ 3 & 600 \
\hline \text { Demand }  & 500 & 500 & 500 & 1500 \backslash 1000 \
\hline
\end{array}$$ The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Set up-but do not solve-this problem as though you were going to solve it with transportation problem software.

Quizplus · Accepted Answer

The Answer of A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this raw material, which must be shipped to three manufacturing plants. The current network has the following characteristics: $$\begin{array} { | l | r | r | r | r | } 
\hline \text { COSTS } & \text { Plant 1 } & \text { Plant 2 } & \text { Plant 3 } & \text { Supply } \
\hline\text { Raw material source 1 } & \$ 6 & \$ 6 & \$ 9 & 400 \
\hline \text { Raw material source 2 } & \$ 4 & \$ 7 & \$ 3 & 600 \
\hline \text { Demand }  & 500 & 500 & 500 & 1500 \backslash 1000 \
\hline
\end{array}$$ The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Set up-but do not solve-this problem as though you were going to solve it with transportation problem software.

A Firm Has Established a Distribution Network for the Supply