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LEDA, a manufacturer of printing inks, has three manufacturing plants worldwide. Their locations and capocities are shown in Table I dang with the cast of
LEDA, a manufacturer of printing inks, has three manufacturing plants worldwide. Their locations and capocities are shown in Table I dang with the cast of producing I ton of Ink of each facility. The production costs are in the local currency of the country where the plant is located. The major markets for the inks are North America, Europe, and the rest of Asia Demand at each market is shown in Table 1. Transportation costs from each plant to each market in U.S. dallers are shown in Table 1. Management must come up with a production plan for the next year. Table 1. Production, Capacity, Transportation, and Demand Costs for LEDA Variable production and shipping costs Plant North Capacity Production Europe Asia America (Tons/Year] Cost/Ton Cited 165 $10030 States $750 $1420 $1590 Germany $1390 $840 $1390 585 16500 Euro Japan $2200 $1400 1850 95 1950000 Yen Demand (tens/ year) 295 260 195 Table 2. Expected Exchange Rates for the Next Year US $ Yen US $ 1.993 107.7 Euro | 0.502 54.07 Yen 0.0093 0.0185 a) If there are no limits on the amount produced in a plant, how much should each plant produce? What will be the shipping plan? What will be the optimal torch cost? Assume the exchange rates are expected as in Table 2 b) If no plant can run below 80% of the capacity, how much should each plast produce? What will be the shipping pan? What will be the potind total cost? Assume the exchange notes are expected as in Table 2. c) Com odding WO tans of capacity in any plant reduce costs
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