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explain step by step procedure for this' An electronics manufacturer wants to expand its market in Europe. The demand in Europe is forecasted as: England

explain step by step procedure for this'

An electronics manufacturer wants to expand its market in Europe. The demand in Europe is forecasted as:

England France Spain Germany Italy Sweden
24 32 28 19 35 27

*in million units

Further analysis shows the variable costs (production, inventory and holding, transportation, tax, and tariffs) of meeting demand from a source to a market per 1,000,000 units:

Demand Region
Production and Transportation Cost per 1,000,000 units
Supply Region England France Spain Germany Italy Sweden
England 150 180 133 189 128 120
France 124 232 190 191 202 72
Spain 227 231 168 194 143 235
Germany 149 115 100 137 116 99
Italy 236 178 122 94 243 226
Sweden 248 73 70 226 246 116

*in thousands of dollars

The company considers two plant sizes in each location. The annualized fixed cost of plants for each location is found to be:

Fixed Cost ($) Low Capacity Fixed Cost ($) High Capacity
England 17,000 20 19,000 35
France 12,000 20 15,000 35
Spain 10,000 20 14,000 35
Germany 9,000 20 14,000 35
Italy 8,000 20 12,000 35
Sweden 9,000 20 13,000 35

*in thousands of dollars

  1. (8 points) What is the lowest cost achievable for the production and distribution network?
  2. (9 points) What is the minimum cost configuration (where are the plants located and what is the capacity of each plant)?
  3. (8 points) Which plants serve which market in what volume?

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