Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
11th Edition
ISBN: 9780135639221
Author: Jay Heizer, Barry Render
Publisher: PEARSON+
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Chapter 13, Problem 22P
Summary Introduction

To develop: The minimum cost plan using the transportation method.

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Ram Roy’s firm has developed the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost using the transportation method. What is the cost? Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. Initial Inventory 20 Units Regular Time cost per unit $100 Overtime cost per unit $160 Sub contract cost per unit $250 Carrying cost per unit per month $6   Supply Table Period Regular Time Overtime Subcontract Demand Forecast 1 30 15 5 40 2 30 15 5 45 3 40 15 5 55
Ram Roy's firm has developed the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost using the transportation method. What is the cost? Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. supply available period initial inventory regular-time cost per unit Overtime cost per unit subcointract cost per unit carrying cost per unit per month 1 2 3 Regular Tim overtime subcontrac demand forecast 30 35 30 15 $ LA LA LA L $ $ $ 90.00 110.00 120.00 3.00 15 10 10 5 5 5 50 50 40
Transworld Deliveries is expanding its contract home delivery service into the Northeastern United States. The company anticipates that to accommodate this expansion it will need between 25 and 40 staffed delivery vehicles. Transworld is currently moving 25 of its own vehicles, with drivers, into the Northeast. The daily cost of operating its own fleet is $820 per vehicle, while the daily cost of leasing a vehicle and driver is expected to be $1,200 per vehicle. The expected demand requirements follow: Requirements (in vehicles) 25 30 35 40 Probability 0.25 0.25 0.25 0.25 Using an expected value approach, should Transworld purchase additional vehicles and hire additional drivers? If so, how many would you recommend?
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