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b) Kaminamisa Breweries are a decade old opaque beer distribution company. Due to some challenges in distribution, Kaminamisa wants to build a warehouse on one
b) Kaminamisa Breweries are a decade old opaque beer distribution company. Due to some challenges in distribution, Kaminamisa wants to build a warehouse on one of its sites. It operates in a region with seven possible sites as shown in the diagram below. The underlined figures represents the fixed cost ($'000) of setting up a warehouse whereas the figures in boxes are the demand ('000 litres). The rest of the figures represent the distance (Km). The organization seeks to minimize the cost of distribution which is the total fixed cost of opening the warehouse plus variable cost of distributing the goods. The variable costs are $4 per unit 100 200 130 I 12 15 . 10 T 15 22 18 225 20 CE G 765 190 230 22 . 13 7 Required f Kaminamisa wants to reduce the distribution costs, calculate the total cost of setting up a warehouse at A, B, C, D, E, F, and G [12 marks] What will be the ideal site and total cost of distribution?! [2 marks]
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