Anderson Watch Company is considering opening four possible distribution centers located in Atlanta, Lexington, Milwaukee, and Salt Lake City with a fixed cost to open of $17,000, $22,000, $35,000, and $25,000, respectively. They currently have ten retail stores located in Seattle, San Francisco, Las Vegas, Tucson, Denver, Dallas, Birmingham, Orlando, Cleveland, and Philadelphia. Lisa, the supply chain VP, wants to minimize the transportation costs of shipping their French down pillows. The per-unit shipping cost from each distribution center to each retail location and the amounts currently in inventory and ordered at each retail location are shown in the following tables.  What is the minimum cost solution?   What is the minimum cost solution if Lisa wants to use single sourcing?

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Anderson Watch Company is considering opening four possible distribution centers located in Atlanta, Lexington, Milwaukee, and Salt Lake City with a fixed cost to open of $17,000, $22,000, $35,000, and $25,000, respectively. They currently have ten retail stores located in Seattle, San Francisco, Las Vegas, Tucson, Denver, Dallas, Birmingham, Orlando, Cleveland, and Philadelphia. Lisa, the supply chain VP, wants to minimize the transportation costs of shipping their French down pillows. The per-unit shipping cost from each distribution center to each retail location and the amounts currently in inventory and ordered at each retail location are shown in the following tables.

 What is the minimum cost solution? 

 What is the minimum cost solution if Lisa wants to use single sourcing?

Shipping
Cost
San
Seattle
Francisco
Las Vegas
Tucson
Denver
Dallas
Atlanta
$2.15
$2.10
$1.75
$1.50
$1.20
$0.80
Lexington
$1.95
$2.00
$1.70
$1.35
$1.10
$1.05
Milwaukee
$1.70
$1.85
$1.50
$1.41
$0.95
$0.95
Salt Lake
City
Demand
$0.60
$0.55
$0.35
$0.60
$0.40
$1.10
8,800
18,000
5,300
3,700
6,500
9,000
Shipping
Cost
Birmingham
Orlando
Cleveland Philadelphia
Supply
Atlanta
$0.35
$0.15
$0.60
$0.50
26,000
Lexington
$0.60
$0.50
$0.25
$0.30
30,000
Milwaukee
$0.70
$0.70
$0.35
$0.40
25,000
Salt Lake
City
$1.35
$1.60
$1.60
$1.70
32,000
Demand
3,300
12,000
9,500
16,000
Transcribed Image Text:Shipping Cost San Seattle Francisco Las Vegas Tucson Denver Dallas Atlanta $2.15 $2.10 $1.75 $1.50 $1.20 $0.80 Lexington $1.95 $2.00 $1.70 $1.35 $1.10 $1.05 Milwaukee $1.70 $1.85 $1.50 $1.41 $0.95 $0.95 Salt Lake City Demand $0.60 $0.55 $0.35 $0.60 $0.40 $1.10 8,800 18,000 5,300 3,700 6,500 9,000 Shipping Cost Birmingham Orlando Cleveland Philadelphia Supply Atlanta $0.35 $0.15 $0.60 $0.50 26,000 Lexington $0.60 $0.50 $0.25 $0.30 30,000 Milwaukee $0.70 $0.70 $0.35 $0.40 25,000 Salt Lake City $1.35 $1.60 $1.60 $1.70 32,000 Demand 3,300 12,000 9,500 16,000
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