Capacity (Cases per Week) Demand (Cases per Week) Plant Warehouse Chicago 10,000 Miami 7,000 Houston 7,500 Denver 9,000 New plant 8,000 Lincoln 4,500 Total 25,500 Jackson 5,000 Total 25,500 Shipping Cost to Warehouse (per Case) Plant Miami Denver Lincoln Jackson Chicago $7.00 $2.00 $4.00 $5.00 Houston $3.00 $1.00 $5.00 $2.00 Buffalo (altemative 1) $6.00 $9.00 $7.00 $4.00 Atlanta (alternative 2) $2.00 $10.000 $8.00 $3.00
The Giant Farmer Company processes food for sale
in discount food stores. It has two plants: one in
Chicago and one in Houston. The company also oper-
ates warehouses in Miami, Florida; Denver, Colorado;
Lincoln, Nebraska; and Jackson, Mississippi. Forecasts
indicate that demand soon will exceed supply and that
a new plant with a capacity of 8,000 cases per week is
needed. The question is where to locate the new plant.
Two potential sites are Buffalo, New York, and Atlanta,
Georgia. The two tables at the bottom of this page give
data on capacities,
costs that have been gathered.
For each alternative new plant location, determine the ship-
ping pattern that will minimize total transportation costs.
Where should the new plant be located?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
