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I would like help with the following: United Beverage Company (UBC) produces craft vodka in two locations: Virginia and California. It sells the vodka through

I would like help with the following:

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United Beverage Company (UBC) produces craft vodka in two locations: Virginia and California. It sells the vodka through retail outlets in New York, Boston, Los Angeles and San Francisco, and operates through a single distributor in each of these cities. Estimated monthly demand in each city for the next month is shown below. UBC must supply at least these many units (a unit of vodka is a container with 50 bottles) to the distributors each month New York Boston Los Angeles San Francisco Demand 500 200 400 500 The cost of transporting each unit of vodka to the distributors is given in the following table: New York Boston Los Angeles San Francisco Virginia $17 $15 $20 $18 California $18 $17 $14 $13 In one particular month, UBC has 800 units of vodka at its California facility, and 800 units in Virginia. Their goal is to meet the demand in such a way that shipping costs are minimized. You are asked to determine the optimal supply plan using linear programming. a) Define the decision variables, state the objective (as a function of the inputs specified in the problem and the decision variables), and identify the constraints. b) Using Excel's Sober, find the optimal supply plan, and the corresponding value of total shipping costs. Attach an image of your solution (use FORMULATEXT to display formulae). ") How many units of vodka are shipped from Virginia to Los Angeles? Explain carefully what the corresponding reduced cost number means (this number is reported in the sensitivity table). d) Now assume that stocks are zero, and that vodka will need to be produced at the two locations. It will then be shipped to the four markets. Raw material for each unit of vodka costs $150 in Virginia and $200 in California. Each unit of vodka requires 4 units of labor in Virginia and 3 units of labor in California. Each unit of labor costs $50 in Virginia and $60 in California. There are 2800 units of labor available in Virginia and 4500 units of labor are available in California. Now UBC must decide how much to produce at each location and has production costs to minimize as well. How would your formulation above change to accommodate this (i.e. to minimize both production and shipping cost)? [You can choose either to give a precise LP formulation, i.e., new objective function and constraints, or the solution using Excel's Solver.]

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