Consider a firm that is introducing a new product. The firm identified 300 potential customers whose probability of purchasing the product depends on age and gender as follows:

Females Under 60 Probability

Buy 0.6

Not 0.4

Females Over 60 Probability

Buy 0.4

Not 0.6

Males Under 60 Probability

Buy 0.55

Not 0.45

Males Over 60 Probability

Buy 0.45

Not 0.55

The firm has 4 warehouses from which the products can be shipped: Dallas, TX, Cleveland, OH, Phoenix, AZ, and San Francisco, CA. Currently, there are 100, 150, 100, and 110 units of the new product stored in these four warehouses, respectively. What is the least costly way of satisfying the demand of the 300 customers from these four warehouses? (The cost of shipping is $0.01 per mile.) Remember that demand values are estimates. Explain how changes in the demand values impact your solution or costs.

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