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Aberdeen Computer Corp. (ACC) is located in Aberdeen, Washington. The company has developed the WebSurfer, a low-cost e-mail and Web-surfing appliance. This product is manufactured at four plants, located in Atlanta, Kansas City, Aberdeen, and Austin. After production, the WebSurfers are shipped to three warehouses, located in Nashville, San Jose, and Houston. ACC sells the WebSurfers through the retail channel. In particular, five different retailers currently sell the WebSurfer-Sears, Best Buy, Fry's, Comp USA, and Office Max. ACC makes weekly shipments to the main warehouses of these five retailers. The shipping cost from each plant to each warehouse, along with the production cost and weekly production capacity at each plant, are given in the table below. Shipping Cost (S/unit) Capacity (units/week) Production Plant Nashville San Jose Houston Cost (S/unit) Atlanta Kansas City Aberdeen Austin $30 $25 $45 $30 $40 $45 $30 $50 $50 $40 $55 $30 $208 $214 $215 $210 200 300 300 400 The shipping cost from each warehouse to each customer, the variable cost (cost per unit moved through the warehouse), the capacity (maximum number of units that can be moved through the warehouse per week) for each warehouse, and the weekly demand for each customer are given in the table below

Aberdeen Computer Corp. (ACC) is located in Aberdeen, Washington. The company has developed the WebSurfer, a low-cost e-mail and Web-surfing appliance. This product is manufactured at four plants, located in Atlanta, Kansas City, Aberdeen, and Austin. After production, the WebSurfers are shipped to three warehouses, located in Nashville, San Jose, and Houston. ACC sells the WebSurfers through the retail channel. In particular, five different retailers currently sell the WebSurfer-Sears, Best Buy, Fry's, Comp USA, and Office Max. ACC makes weekly shipments to the main warehouses of these five retailers. The shipping cost from each plant to each warehouse, along with the production cost and weekly production capacity at each plant, are given in the table below. Shipping Cost (S/unit) Capacity (units/week) Production Plant Nashville San Jose Houston Cost (S/unit) Atlanta Kansas City Aberdeen Austin $30 $25 $45 $30 $40 $45 $30 $50 $50 $40 $55 $30 $208 $214 $215 $210 200 300 300 400 The shipping cost from each warehouse to each customer, the variable cost (cost per unit moved through the warehouse), the capacity (maximum number of units that can be moved through the warehouse per week) for each warehouse, and the weekly demand for each customer are given in the table below

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Aberdeen Computer Corp. (ACC) is located in Aberdeen, Washington. The company has developed the WebSurfer, a cost-effective email and web-surfing appliance. Manufactured at four plants located in Atlanta, Kansas City, Aberdeen, and Austin, these products are shipped to three warehouses in Nashville, San Jose, and Houston after production. ACC distributes WebSurfers to major retailers such as Sears, Best Buy, Fry’s, Comp USA, and Office Max through these warehouses. Below is the table containing shipping costs from each plant to each warehouse, including production cost per unit and weekly production capacity at each plant. **Table: Plant Shipping Costs, Production Costs, and Capacity** | Plant | Shipping Cost ($/unit) | | | Production Cost ($/unit) | Capacity (units/week) | |-------------|------------------------|-----------|----------------|--------------------------|-----------------------| | | Nashville | San Jose | Houston | | | | Atlanta | $30 | $40 | $50 | $208 | 200 | | Kansas City | $25 | $45 | $40 | $214 | 300 | | Aberdeen | $45 | $30 | $55 | $215 | 250 | | Austin | $30 | $50 | $30 | $210 | 400 | The next table provides data on shipping cost from each warehouse to each customer, variable cost per unit moved through warehouses, maximum capacity for each warehouse, and weekly customer demand. **Table: Warehouse Shipping Costs and Demands** | Warehouse | Shipping Cost ($/unit) | | | | | Variable Cost | Capacity (units/week) | |-----------|------------------------|---------|-----------|-----------|-----------|---------------|------------------------| | | Best Buy | Fry’s | Comp USA | Office Max| | ($/unit) | | | Nashville | $40 | $45 | $30 | $25 | $20 | $4 | 300 | | San Jose | $15 | $50 | $25 | $15 | $40 | $5 | 500 | | Houston | $50 | $35 | $15 | $40 | $50 |
Transcribed Image Text:Aberdeen Computer Corp. (ACC) is located in Aberdeen, Washington. The company has developed the WebSurfer, a cost-effective email and web-surfing appliance. Manufactured at four plants located in Atlanta, Kansas City, Aberdeen, and Austin, these products are shipped to three warehouses in Nashville, San Jose, and Houston after production. ACC distributes WebSurfers to major retailers such as Sears, Best Buy, Fry’s, Comp USA, and Office Max through these warehouses. Below is the table containing shipping costs from each plant to each warehouse, including production cost per unit and weekly production capacity at each plant. **Table: Plant Shipping Costs, Production Costs, and Capacity** | Plant | Shipping Cost ($/unit) | | | Production Cost ($/unit) | Capacity (units/week) | |-------------|------------------------|-----------|----------------|--------------------------|-----------------------| | | Nashville | San Jose | Houston | | | | Atlanta | $30 | $40 | $50 | $208 | 200 | | Kansas City | $25 | $45 | $40 | $214 | 300 | | Aberdeen | $45 | $30 | $55 | $215 | 250 | | Austin | $30 | $50 | $30 | $210 | 400 | The next table provides data on shipping cost from each warehouse to each customer, variable cost per unit moved through warehouses, maximum capacity for each warehouse, and weekly customer demand. **Table: Warehouse Shipping Costs and Demands** | Warehouse | Shipping Cost ($/unit) | | | | | Variable Cost | Capacity (units/week) | |-----------|------------------------|---------|-----------|-----------|-----------|---------------|------------------------| | | Best Buy | Fry’s | Comp USA | Office Max| | ($/unit) | | | Nashville | $40 | $45 | $30 | $25 | $20 | $4 | 300 | | San Jose | $15 | $50 | $25 | $15 | $40 | $5 | 500 | | Houston | $50 | $35 | $15 | $40 | $50 |
### Decision-Making for Cost Optimization **Scenario:** ACC is considering ways to reduce costs by potentially closing some production facilities and/or warehouses. Each plant and warehouse incurs a fixed operating cost weekly. **Objective:** Incorporate binary variables into your model to determine which plants and warehouses should remain open to minimize total cost, which includes fixed costs for any operational facility. ### Fixed Costs for Facilities: #### Plants: - **Atlanta**: $8,000 per week - **Kansas City**: $9,000 per week - **Aberdeen**: $9,000 per week - **Austin**: $10,000 per week #### Warehouses: - **Nashville**: $4,000 per week - **San Jose**: $5,000 per week - **Houston**: $5,000 per week By evaluating these fixed costs, ACC can make informed decisions about which facilities to operate in order to achieve cost efficiency.
Transcribed Image Text:### Decision-Making for Cost Optimization **Scenario:** ACC is considering ways to reduce costs by potentially closing some production facilities and/or warehouses. Each plant and warehouse incurs a fixed operating cost weekly. **Objective:** Incorporate binary variables into your model to determine which plants and warehouses should remain open to minimize total cost, which includes fixed costs for any operational facility. ### Fixed Costs for Facilities: #### Plants: - **Atlanta**: $8,000 per week - **Kansas City**: $9,000 per week - **Aberdeen**: $9,000 per week - **Austin**: $10,000 per week #### Warehouses: - **Nashville**: $4,000 per week - **San Jose**: $5,000 per week - **Houston**: $5,000 per week By evaluating these fixed costs, ACC can make informed decisions about which facilities to operate in order to achieve cost efficiency.
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