Question
Hansen Controls has been awarded a contract for a large number of control panels. To meet this demand, it will use its existing plants in
Hansen Controls has been awarded a contract for a large number of control panels. To meet this demand, it will use its existing plants in Houston and Tulsa, and consider new plants in Portland, St. Louis and Lexington. Finished control panels are to be shipped to Denver, Kansas City and Seattle. Pertinent information is given in the table.
|
Sources |
Construction Cost | Shipping Cost to Destination: |
Capacity | ||
|
Denver 1 |
Kansas City 2 | Seattle 3 | |||
| 1- Houston | ---- | 6 | 8 | 7 | 16,000 |
| 2- Tulsa | ---- | 6 | 9 | 13 | 13,000 |
| 3- Portland | 500,000 | 11 | 8 | 5 | 13,000 |
| 4- St. Louis | 450,000 | 8 | 3 | 10 | 10,000 |
| 5- Lexington | 400,000 | 10 | 6 | 14 | 9,000 |
|
| Demand | 14,000 | 13,000 | 18,000 |
|
We develop a transportation model as an LP that includes provisions for the fixed costs (construction costs in this case) for the three new plants. The solution of this model would reveal which plants to build and the optimal shipping schedule.
| Let | xij = the number of panels shipped from source i to destination j |
|
| yi = 1 if plant i is built, = 0 otherwise (i = 3, 4, 5) |
The constraint x21 + x22 + x23 <= 13,000*y3 represents which of the following?
Group of answer choices
Supply from Houston
Supply from Portland
Demand at Kansas City
Supply from Tulsa
None of the others.
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Fundamentals of Financial Management
Authors: Eugene F. Brigham
Concise 9th Edition
1305635937, 1305635930, 978-1305635937
