Chapter 6 Moon Micro Problem_solution

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<< Search more Solutions! Found Errors in Solution? >> Report here! Answer Answer : The goal of the company-S is to minimize costs and determine the optimal plants. Step-1: Decide decision variables and formulate objective function: This optimization model can be stated as, Minimize Step-2: Setup constraints: Subject to …… (1) …… (2)
Here, is the production facilities (3), is the number of regional markets (7), is the annual demand for cell phones from regional market , is the potential capacity of each production facility, is the annualized fixed cost of setting up a production facility, is the variable production and shipping cost (including duty) from production facility to demand region , and is the number of cell phones from production facility to demand region . Note, in the question is it is mentioned that the duties are to be applied using the formula, However, if one will use this formula the fixed cost will get counted twice, first in this formula and second as full fixed cost ( See objective function equation ). To overcome this difficulty, one is required separate the unit cost and the unit cost increase, as shown below: Also, there will be no import duty if the warehouse the demand center is located in same country. First consider the first company and determine the total cost using the following methodology as shown below: Step-1: Enter the data in excel exactly as shown below:
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After entering the formula, the input sheet will look like the sheet shown below: Step-2: Enter the constraint and objective function in the Excel solver as shown below: Go to the Data Tab and then click on Solver. The following dialogue box will appear:
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Step-3: Click on solve to generate the following results:
The lowest cost achievable for production and distribution for the first company is Step-4: Now similarly determine the production and distribution cost for the second company, as shown below: In the previous model, just change the demand, transportation cost and the fixed cost as shown below: (Note: the changed cells are highlighted in yellow)
Step-5: Click on solve to generate the results, as shown below:
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The lowest cost achievable for production and distribution for the second company is b) Combine the two models as shown below: Sleek and Sturdy-Merger (No Shut Down) Combine the demand and costs data for Sleek and Sturdy.
Calculate the total demand from N. America by entering the formula in cell C8, and stretch it through I8 to calculate the total demand for all other demand regions. Calculate demand constraint by entering the formula in cell D44, and stretch it through J44 to calculate demand constraint for all regions. To find optimal merger production, • Select the "Data" tab and click "Solver" in the "Analysis" grouping. • Input the objective, in this case (All decision variables are positive) (All decision variables are integers) (Demand constraint) (Capacity constraint) • Enter varying decision variables "By Changing Variable Cell" field for . • Choose to “min.” • Click "Solve" to optimize. Step-1: Enter the data in the Excel sheet as shown below:
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Step-2: Enter constraints and objective function in solver as shown below:
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Step-3: Click on solve to generate the results:
The lowest production and distribution cost achievable in this network is $1,066,822,000 . The following table shows the markets served by different plants. Production Facility Demand Regions Sleek (EU) (EU), (Non EU) and Africa NA NA SA SA
Sturdy EU EU NA NA Austr Japan and Austr c) Sleek and Sturdy-Merger (Scale Back/Shut Down) Since the plants, now, can be scaled back or shut down, the optimization model can be re-stated as Since the plants, now, can be scaled back or shut down, the optimization model can be re-stated as Minimize Subject to …… (3) …… (4)
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…… (5) …… (6) Here, is the production facilities (3), is the number of regional markets (7), is the annual demand for cell phones from regional market , is the potential capacity of each production facility if it is scaled back, is the annualized fixed cost of a production facility if it is scaled back, is the annualized fixed cost of a production facility if it is shut down, is 1 if facility is scaled back, 0 otherwise, and is 1 if facility is shut down, 0 otherwise. Step-1: Enter the data in Excel as shown below:
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Step-2: Open solver and enter constraints and objective function as shown below:
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Step-3: Click on solve to generate the following results:
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The optimal network after the merger if plants can be scaled back or shut down is shown above. The lowest production and distribution cost achievable in this network is $970 million. The results show that shutting down the Sturdy’s EU-facility minimizes the total cost. (d) Sleek and Sturdy-Merger (Scale Back/Shut Down and No Duty) Change the value in cell D10 through J10 to zero depicting to import duties . Now, run the solver. The results obtained are The optimal network with zero import duties is shown in the table above. Shutting down the Sturdy’s NA plant will result in lowest cost. The lowest production and distribution cost achievable in this network is $936,300,000 .
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“ As for Homework Help policy we need to solve four subports only”.
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“Please post be remaining quastion as another post”. “ Please hit thumps up answer helped you”. Thank you. Likes: 1 Dislikes: 0
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