Question
Jane has been presented with the following problem. She has been asked to provide an analysis and explanation. Help Jane solve the following questions: Shipping
Jane has been presented with the following problem. She has been asked to provide an analysis and explanation. Help Jane solve the following questions: Shipping Shenanigans Jane's shipping company, Pirate Logistics, has three supply locations, Wilmington, New Bern, & Lynchburg. Jane then needs goods shipped to three demand locations, Grand Island, Omaha, & Sioux Falls. Jane needs a shipping schedule that minimizes cost but yet meets the following: a unique shipping cost is associated with each supply locale limited supply amounts are provided at any supply locale each demand locale must meet a required demand amount amount supplied must equal amount demanded Jane has given Pirate Logistics the following transshipment diagram that contains the pertinent supply and demand. The associated cost information between supply and demand locales is listed in Table 1.3. Supply Locations Demand Locations Table 1.3 Cost Structure for Pirate Logistics Grand Island Omaha Sioux Falls Wilmington $17.75 $30.50 $22.00 New Bern $30.50 $27.55 $30.50 Lynchburg $31.95 $29.00 $17.75 (Note: for example it costs $17.75 to ship a unit from Wilmington to Grand Island) Jane wonders if there is just one "best" solution. Help Jane develop a shipping schedule that minimizes total cost, meets required demand and supply constraints, comments on the idea of a "best" solution, and provides a comparison to current operations. Currently Pirate Logistics ships 12000 from Wilmington to Omaha, 13000 from Wilmington to Sioux Falls, 27500 from New Bern to Omaha, 28000 from Lynchburg to Grand Island, and 9500 from Lynchburg to Sioux Falls. Include a model (preferably in XL) showing your LP setup, a comparison of the current shipping schedule to your model's schedule, and a brief discussion of sensitivity analysis (i.e., Shadow Prices). HINT: You can do this by hand but most likely you will set up a transportation LP in a spreadsheet and use Solver to generate a solution.
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