LaCross Manufacturing is a manufacturer and distributor of 10-foot high-pressure hoses for heavy equipment used in mining. The plant is located in Morocco and delivers to five wholesale customers. Due to the long distances involved in making these deliveries, LaCross Manufacturing has decided to open distribution centers near its potential customers. This is a strategy that this company has in mind so that its delivery times are reduced considerably. The strategy department has located five strategic zones such as Mykonos, Istanbul, Canary Islands, Lisbon and Algiers. The following table shows the capacity in thousands of hoses for the different distribution centers along with the associated shipping cost for the hoses from Morocco to each distribution center and the monthly operating costs of the distribution centers: Shipping cost from Morocco LOCATION Capacity (in thousands per month) ($ per thousand Monthly operating costs ($) hoses) Mykonos Istanbul 80 0.25 40.000, 60 60 0.50 20,000 Canary; 60 0.75 Islands Lisbon 60 0.75 25,000 Algiers 60 0.75 20,000 LaCross Manufacturing has stable relationships with five potential wholesale customers, who have been observed to maintain stable demand from one month to the next. The accounting department has estimated the transportation costs from the possible distribution centers to the five potential customers, which are shown in the following table, along with the demand of its wholesale customer SHIPPING COST (S/THOUSAND HOSES) FROM DISTRIBUTION CENTERS CUSTOMERS Demand (in Mykonos Istanbul Canary Islands Lisbon Algiers thousands i per month) Palermo 0.25 0.63 1 1.75 2.13 1.75 44 84 Tunisia 1.25 1.50 1.50; 2.75 0.50 74 I Port 0.75 1.38 1.38 ' 2.38 1.00 . Malta 1.63 1.75 I 1.00 . 3.50 0.50 52 52 40 40 . Marseilles 1.75 2.38 ' 0.25 ' 3.88; 1.50 ' 70 70 They are evaluating the possibility of not necessarily opening all five distribution centers, since they would save costs if they could only open four of them. Possible alternatives could be: 1. Open the five distribution centers. 2. Open the five distribution centers except the one in Istanbul, where the capacity in Istanbul will be assumed by Mykonos. 3. Open the five distribution centers except the one in the Canary Islands, where their capacity will be assumed by Mykonos. 4. Open the five distribution centers except for the one in Lisbon, where its capacity will be assumed by Mikonos. 5. Open the five distribution centers except for the one in Algiers, where its capacity will be assumed by Mykonos. The one in Mykonos was not taken into account because it is a HUB for them, they prefer that it be established at any cost. QUESTIONS TO DEVELOP 1. Formulate a transportation problem with each of the five previous alternatives, determining the shipping plan associated with the five alternatives. 2. Find the alternative that provides the minimum total monthly cost. It must be solved in Excel and with SOLVER.