Question
A firm from Zagreb distributes its products at the Zagreb market. The market research study shows that the firm expansion is needed. For this
A firm from Zagreb distributes its products at the Zagreb market. The market research study shows that the firm expansion is needed. For this reason, the considered firm is planning to open two branches in Rijeka, Pula or Umag. The quantity demands, opening costs and capacities of the areas are given in the following table: Demand Rijeka 10 Pula 15 Umag 20 Opening cost 120 Capacity 15 150 20 200 30 The transportation fixed cost, unit transportation cost and transportation capacities are given in the following tables. The transportation fixed cost: Rijeka Pula Umag Rijeka 1 2 3 Pula 3 0.5 2 Umag 2.5 3 1 The unit transportation cost: Rijeka Pula Umag Rijeka 2 3 3 Pula 2.5 1 2 Umag 3 2.5 2 The transportation capacities: Rijeka Pula Umag Rijeka 10 8 8 Pula 10 15 10 Umag 10 15 20 Find the optimal distribution plan (the branch locations and quantities that will be distributed) in order to minimize the total cost (opening and transportation cost).
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