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Milatog is a Russian company producing cattle forage. In the province of Domedovsky, there are seven farms which have an average daily forage demand (

Milatog is a Russian company producing cattle forage. In the province of Domedovsky, there are seven farms which have an average daily forage demand (in quintals) equal to 36,42,34,50,27,30 and 43, respectively. Milatog intends to purchase some silos, to supply the seven farms. Six different potential sites in the area have been identified, with a maximum daily forage throughput (expressed in quintals) equal to, respectively, 80,90,110,120,100 and 120. For the next four years, Milatog has estimated the following fixed costs (in e): 321420,350640,379860,401775,350640 and 336030, respectively. The daily average marginal facility cost (in e) per quintal of forage, for each potential site, is equal to 0.15,0.18,0.20,0.18,0.15 and 0.17, respectively. The transport cost per quintal of forage and per kilometer traveled is equal to e 0.06. The distances for each origin-destination pair are shown in Table 3. The daily transport costs are computed by considering that every journey is made up of both an outward and a return journey. Milatog is planning to keep the warehouses in operation for four years (corresponding to 3653+366=1461 days).

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