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Consider a manufacturing business with two plants in cities F1 & F2 and three retail outlets in cities C1,C2, or C3. Monthly demand at retail
Consider a manufacturing business with two plants in cities F1 \& F2 and three retail outlets in cities C1,C2, or C3. Monthly demand at retail locations is 8,5 , and 2 units, whereas monthly supply at manufacturers is 6 and 9 , accordingly. Notice that the entire supply and demand are equal. We are also provided with the cost of transporting one unit from manufacturing to retail outlets (see table). Determine the amount that must be shipped from each manufacturer to each retail area to satisfy demand at the lowest possible total shipping cost. 1. Formulate this as a linear programming problem. A. What is your objective function? B. What are the constraints? 2. Solve the linear programming problem using Excel Solver. Provide screenshots of Solver parameters and results. 3. What is the mathematically optimal solution? With this solution, what is the total shipping cost? 4. As the manager, what other considerations should be made before making this decision? 5. As the manager making this decision, would you use the mathematically optimal solution? Why or why not
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