The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The company can produce air conditioners at six plants across the country and stock these units in any of four different candidate warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table along with the monthly capacity and fixed cost of operating each plant. Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 Warehouse 1 $700 $800 $850 $600 $500 $700 Warehouse 2 $1,000 $500 $600 $800 $600 $600 Warehouse 3 $900 $600 $700 $500 $450 $750 Warehouse 4 $1,200 $700 $500 $600 $700 $500 Fixed Cost $55,000 $40,000 $45,000 $50,000 $42,000 $40,000 Capacity 300 200 300 250 350 400 Impact on environment 5 9 7 6 8 9 Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the monthly fixed cost of operating each warehouse. Impact on

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Case description
The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The
company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The
company can produce air conditioners at six plants across the country and stock these units in any of four different candidate
warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table
along with the monthly capacity and fixed cost of operating each plant.
Plant 1
Plant 2
Plant 3
Plant 4
Plant 5
Plant 6
Warehouse 1
Warehouse 2
Warehouse 3
Warehouse 4
Warehouse 1
$700
$800
$850
$600
$500
$700
Demand
Warehouse 2
$1,000
$500
$600
Customer 1
$40
$60
$55
$80
$800
$600
$600
Warehouse 3
$900
$600
$700
$500
$450
$750
Customer 2
$80
$50
$40
$30
Customer 3
$60
$75
$65
$80
The monthly demand from each customer is summarized next:
Customer 1
200
Customer 2
300
Warehouse 4
$1,200
$700
$500
Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the
monthly fixed cost of operating each warehouse.
$600
$700
$500
Customer 4
$90
$40
$60
$50
Fixed Cost
$55,000
$40,000
$45,000
$50,000
$42,000
$40,000
Customer 3
200
Capacity
300
200
300
250
350
400
Customer 5 Fixed Cost Capacity
$40,000
$50
700
$35
$50,000
500
$80
$35,000
400
$60
$60,000
600
Customer 4
150
Impact on
environment
5
9
7
6
8
9
Impact on
environment
8
7
9
5
Customer 5
250
Transcribed Image Text:Case description The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The company can produce air conditioners at six plants across the country and stock these units in any of four different candidate warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table along with the monthly capacity and fixed cost of operating each plant. Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Warehouse 1 $700 $800 $850 $600 $500 $700 Demand Warehouse 2 $1,000 $500 $600 Customer 1 $40 $60 $55 $80 $800 $600 $600 Warehouse 3 $900 $600 $700 $500 $450 $750 Customer 2 $80 $50 $40 $30 Customer 3 $60 $75 $65 $80 The monthly demand from each customer is summarized next: Customer 1 200 Customer 2 300 Warehouse 4 $1,200 $700 $500 Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the monthly fixed cost of operating each warehouse. $600 $700 $500 Customer 4 $90 $40 $60 $50 Fixed Cost $55,000 $40,000 $45,000 $50,000 $42,000 $40,000 Customer 3 200 Capacity 300 200 300 250 350 400 Customer 5 Fixed Cost Capacity $40,000 $50 700 $35 $50,000 500 $80 $35,000 400 $60 $60,000 600 Customer 4 150 Impact on environment 5 9 7 6 8 9 Impact on environment 8 7 9 5 Customer 5 250
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