# Page 403 Problem 5 By: Ms. Tamara MacEwen Parisay’s comment in red

 Date conversion 10.08.2017 Size 45.61 Kb.

Tamara MacEwen

IE 416

Page 403 Problem 5

By: Ms. Tamara MacEwen

Parisay’s comment in red.
General Ford has two plants, two warehouses, and three customers. The locations of these are as follows:

Plants: Detroit and Atlanta

Warehouses: Denver and New York

Customers: Los Angeles, Chicago, and Philadelphia

Cars are produced at plants, then shipped to warehouses, and finally shipped to customers. Detroit can produce 150 cars per week, and Atlanta can produce 100 cars per week. Los Angeles requires 80 cars per week; Chicago, 70; and Philadelphia, 60. It costs \$10,000 to produce a car at each plant, and the cost of shipping a car between two cities is given in Table 62. Determine how to meet General Ford’s weekly demands at minimum cost.
Table 62
 To (\$) From Denver New York Detroit 1253 637 Atlanta 1398 841

 To (\$) From Los Angeles Chicago Philadelphia Denver 1059 996 1691 New York 2786 802 100

a) Write the first transportation tableau, manually, using the style in your text book.

 Denver New York Los Angeles Chicago Philadelphia Dummy Supply 1253 637 M M M 0 Detroit 150 1398 841 M M M 0 Atlanta 100 0 M 1059 996 1691 0 Denver 250 M 0 2786 802 100 0 New York 250 Demand 250 250 80 70 60 40 650

b) Solve it as a transshipment problem using WinQSB (Network modeling>> Network option). Notice you do not need to define transshipment point as in your textbook. Refer to the example on the Class Notes. Print input and output tables.

c) Write a report to a manager and explain the solution.
Report to Manager:

After reviewing the current supply chain, I would make the following recommendations:

The total shipping costs of this plan will be \$338,610 per week. Total production and shipping costs per week would be \$2,838,610 per week (200 cars produced at \$10,000 each plus \$338,610 in shipping costs).

Shipping plan will be:

1. Ship 20 cars from Detroit to Denver

2. Ship 130 cars from Detroit to New York

3. Ship 60 cars from Atlanta to Denver

4. Ship 80 cars from Denver to Los Angeles

5. Ship 70 cars from New York to Chicago

6. Ship 60 cars from New York to Philadelphia

With this plan, the customer demand for all three cities will be met and all supply produced in Detroit will be sent to warehouses. If Atlanta produces to its supply target of 100 cars per week, it will have 40 cars which are not needed in the warehouse to fulfill the current customer demand. It is better to produce only 60 cars in Atlanta or find new customers for the extra 40 cars.

The required capacity for our warehouses are: Denver 80 cars, New York 130 cars.