A retail chain has 8 stores in a region supplied from 3 supply sources. Trucks have a capacity of 25,000 units and cost $1,200 per load plus $48 per delivery. The cost of holding one unit in inventory at retail for a year is $1.5. The managers will set up milk runs from suppliers to retail stores. Assume that all trucks travel full. Suppliers are considering whether to run a milk run to 2 stores or 4 stores on each truck. Which network should be chosen if annual sales for each product at each retail store are 150,000 units?
A retail chain has 8 stores in a region supplied from 3 supply sources. Trucks have a capacity of 25,000 units and cost $1,200 per load plus $48 per delivery. The cost of holding one unit in inventory at retail for a year is $1.5. The managers will set up milk runs from suppliers to retail stores. Assume that all trucks travel full. Suppliers are considering whether to run a milk run to 2 stores or 4 stores on each truck. Which network should be chosen if annual sales for each product at each retail store are 150,000 units?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter5: Network Models
Section: Chapter Questions
Problem 68P
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A retail chain has 8 stores in a region supplied from 3 supply sources. Trucks have a capacity of 25,000 units and cost $1,200 per load plus $48 per delivery. The cost of holding one unit in inventory at retail for a year is $1.5. The managers will set up milk runs from suppliers to retail stores. Assume that all trucks travel full. Suppliers are considering whether to run a milk run to 2 stores or 4 stores on each truck. Which network should be chosen if annual sales for each product at each retail store are 150,000 units?
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