Capacity (Cases per Week) Demand (Cases per Week) Plant Warehouse Chicago 10,000 Miami 7,000 Houston 7,500 Denver 9,000 New plant 8,000 Lincoln 4,500 Total 25,500 Jackson 5,000 Total 25,500 Shipping Cost to Warehouse (per Case) Plant Miami Denver Lincoln Jackson Chicago $7.00 $2.00 $4.00 $5.00 Houston $3.00 $1.00 $5.00 $2.00 Buffalo (altemative 1) $6.00 $9.00 $7.00 $4.00 Atlanta (alternative 2) $2.00 $10.000 $8.00 $3.00

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter5: Network Models
Section5.3: Assignment Models
Problem 12P
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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 oper-
ates 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.
Two potential sites are Buffalo, New York, and Atlanta,
Georgia. The two tables at the bottom of this page give
data on capacities, forecasted demand, and shipping
costs that have been gathered.
For each alternative new plant location, determine the ship-
ping pattern that will minimize total transportation costs.
Where should the new plant be located?

Capacity (Cases
per Week)
Demand (Cases
per Week)
Plant
Warehouse
Chicago
10,000
Miami
7,000
Houston
7,500
Denver
9,000
New plant
8,000
Lincoln
4,500
Total 25,500
Jackson
5,000
Total 25,500
Shipping Cost to Warehouse (per Case)
Plant
Miami
Denver
Lincoln
Jackson
Chicago
$7.00
$2.00
$4.00
$5.00
Houston
$3.00
$1.00
$5.00
$2.00
Buffalo (altemative 1)
$6.00
$9.00
$7.00
$4.00
Atlanta (alternative 2)
$2.00
$10.000
$8.00
$3.00
Transcribed Image Text:Capacity (Cases per Week) Demand (Cases per Week) Plant Warehouse Chicago 10,000 Miami 7,000 Houston 7,500 Denver 9,000 New plant 8,000 Lincoln 4,500 Total 25,500 Jackson 5,000 Total 25,500 Shipping Cost to Warehouse (per Case) Plant Miami Denver Lincoln Jackson Chicago $7.00 $2.00 $4.00 $5.00 Houston $3.00 $1.00 $5.00 $2.00 Buffalo (altemative 1) $6.00 $9.00 $7.00 $4.00 Atlanta (alternative 2) $2.00 $10.000 $8.00 $3.00
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