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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 operates 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. Three potential sites are Buffalo, Atlanta, and Memphis. The two tables below give data on capacities, forecasted demand, and shipping costs that have been gathered. Plant Chicago Houston New plant ated in Capacity (cases per week) A new plant should be located in 8,000 7,500 8,000 Total 23,500 Warehouse Miami Denver Lincoln Jackson Demand (cases per week) 5,000 9,000 4,500 5,000 Total 23,500 Plant Chicago Houston i Shipping Cost to Warehouse (per case) Miami Denver Lincoln Jackson $7.00 $2.00 $4.00 $5.00 $3.00 $2.00 $4.00 $3.00 $6.00 $9.00 $6.00 $2.00 $2.00 $12.00 $5.00 $6.00 $11.00 $6.00 Buffalo (alternative 1) Atlanta (alternative 2) Memphis (alternative 3) $2.00 For each alternative new plant location, determine the total cost of the shipping pattern that will minimize total transportation costs. Where should the new plant be located? If the new plant is located in Buffalo, the optimal cost is $ (Enter your response as a whole number.) If the new plant is located in Atlanta, the optimal cost is $ (Enter your response as a whole number.) If the new plant is the optimal cost is $ (Enter your response as a whole number.) $4.00

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 operates 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. Three potential sites are Buffalo, Atlanta, and Memphis. The two tables below give data on capacities, forecasted demand, and shipping costs that have been gathered. Plant Chicago Houston New plant ated in Capacity (cases per week) A new plant should be located in 8,000 7,500 8,000 Total 23,500 Warehouse Miami Denver Lincoln Jackson Demand (cases per week) 5,000 9,000 4,500 5,000 Total 23,500 Plant Chicago Houston i Shipping Cost to Warehouse (per case) Miami Denver Lincoln Jackson $7.00 $2.00 $4.00 $5.00 $3.00 $2.00 $4.00 $3.00 $6.00 $9.00 $6.00 $2.00 $2.00 $12.00 $5.00 $6.00 $11.00 $6.00 Buffalo (alternative 1) Atlanta (alternative 2) Memphis (alternative 3) $2.00 For each alternative new plant location, determine the total cost of the shipping pattern that will minimize total transportation costs. Where should the new plant be located? If the new plant is located in Buffalo, the optimal cost is $ (Enter your response as a whole number.) If the new plant is located in Atlanta, the optimal cost is $ (Enter your response as a whole number.) If the new plant is the optimal cost is $ (Enter your response as a whole number.) $4.00

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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 operates 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. Three potential sites are Buffalo, Atlanta, and Memphis. The two tables below give data on capacities, forecasted demand, and shipping costs that have been gathered. Plant Chicago Houston Capacity (cases per week) New plant Warehouse Plant Chicago Houston Buffalo (alternative 1) Atlanta (alternative 2) Memphis (alternative 3) For each alternative new plant location, determine the total cost of the shipping pattern that will minimize total transportation costs. Where should the new plant be located? If the new plant is located in Buffalo, the optimal cost is $ (Enter your response as a whole number.) If the new plant is located in Atlanta, the optimal cost is $ (Enter your response as a whole number.) (Enter your response as a whole number.) If the new plant is located in Memphis, the optimal cost is $ A new plant should be located in 8,000 7,500 8,000 Total 23,500 Miami Denver Lincoln Demand (cases per week) Jackson 5,000 9,000 4,500 5,000 i Shipping Cost to Warehouse (per case) Miami Denver Lincoln Jackson $7.00 $2.00 $4.00 $5.00 $3.00 $2.00 $4.00 $3.00 $6.00 $9.00 $6.00 $2.00 Total 23,500 $2.00 $12.00 $5.00 $6.00 $11.00 $6.00 $2.00 $4.00
Transcribed Image Text: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 operates 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. Three potential sites are Buffalo, Atlanta, and Memphis. The two tables below give data on capacities, forecasted demand, and shipping costs that have been gathered. Plant Chicago Houston Capacity (cases per week) New plant Warehouse Plant Chicago Houston Buffalo (alternative 1) Atlanta (alternative 2) Memphis (alternative 3) For each alternative new plant location, determine the total cost of the shipping pattern that will minimize total transportation costs. Where should the new plant be located? If the new plant is located in Buffalo, the optimal cost is $ (Enter your response as a whole number.) If the new plant is located in Atlanta, the optimal cost is $ (Enter your response as a whole number.) (Enter your response as a whole number.) If the new plant is located in Memphis, the optimal cost is $ A new plant should be located in 8,000 7,500 8,000 Total 23,500 Miami Denver Lincoln Demand (cases per week) Jackson 5,000 9,000 4,500 5,000 i Shipping Cost to Warehouse (per case) Miami Denver Lincoln Jackson $7.00 $2.00 $4.00 $5.00 $3.00 $2.00 $4.00 $3.00 $6.00 $9.00 $6.00 $2.00 Total 23,500 $2.00 $12.00 $5.00 $6.00 $11.00 $6.00 $2.00 $4.00
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