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Consider a freight consolidation problem where a supplier located in Kansas City (KC) delivers merchandise to three retailers (customers) located in Chicago, Indianapolis, and Miami.

Consider a freight consolidation problem where a supplier located in Kansas City (KC) delivers merchandise to three retailers (customers) located in Chicago, Indianapolis, and Miami. Each unit of merchandise weighs 8 lbs. The daily shipment volumes (in units of merchandise) for the three customers for three consecutive days are as follows.

Location Shipment volume per day (units)
Day 1 Day 2 Day 3
Chicago, IL 750 2,500 3,375
Indianapolis, IN 1,088 1,313 2,750
Miami, FL 5,750 4,438 7,125

The transportation rates ($/cwt) from KC to customer locations are as follows (1 cwt = 100 lbs):

Location Transportation rate ($/cwt)
0-99 100-199 200-399 400+
Chicago, IL 14.76 12.07 9.88 7.73
Indianapolis, IN 20.90 16.99 12.13 10.20
Miami, FL 24.40 20.38 18.07 16.47

The supplier currently has dedicated trucks for each of the three customers and delivers daily to each of the three customers.

a) What is the total (i.e., for 3 days) transportation cost for the customer in Indianapolis, IN, under the current system where the supplier delivers daily?

b) What is the total (i.e., for 3 days) transportation cost for the customer in Miami, FL, under the current system where the supplier delivers daily?

c)What is the total (i.e., for 3 days) transportation cost for the current system where the supplier delivers daily?

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