Question
A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this
A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this material, which must be shipped to three manufacturing plants. The current network has the following characteristics:
Costs | Plant 1 | Plant 2 | Plant 3 | Supply |
Raw material source 1 | $6 | $8 | $9 | 400 |
Raw material source 2 | $4 | $7 | $3 | 600 |
Demand | 500 | 500 | 500 | Supply < Demand |
The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Solve with the transportation method. Which site should be selected?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started