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Minimize Constraint? Supply Constraint? Demand Constraint? Balance Constraint? Nortex Chemicals, Inc. is involved in the natural gas processing industry in the Texas Panhandle. One of
Minimize Constraint?
Supply Constraint?
Demand Constraint?
Balance Constraint?
Nortex Chemicals, Inc. is involved in the natural gas processing industry in the Texas Panhandle. One of its primary operations involves purchasing large tanks, each roughly the size of a rail car, of particular byproducts from natural gas processing. It further purifies these byproducts into a usable form, and then resells the tanks to industrial customers. Presently, Nortex is in possession of 16 tanks in Canadian, 13 tanks in Spearman, and 12 tanks in Vega. Each tank must be shipped by truck to one of its processing centers, which are located in Dalhart, Pampa, and Canyon, for further refinement. The cost of shipment depends roughly on distance, but also takes into account the driver's salary (which is higher for routes that are difficult to navigate in a truck), the cost of fuel, and hazardous materials permit fees. The following table provides the total costs (in dollars) of shipping one tank from the suppliers to the processing centers. While the three processing centers are capable of processing any number of tanks, the number transported to Dalhart must equal the number transported to Canyon, due to an existing agreement between Nortex and its transportation provider. After processing, the tanks will be shipped to customers in Stratford, Stinnett, Perryton, Claude, Hereford, and Channing. The cost of shipment depends on metrics similar to those mentioned above. The following table provides the total costs (in dollars) of shipping one tank from the processing centers to the customers. Note that certain combinations of processing facilities and customers are not possible due to factors such as regional non-compete clauses; these are indicated by dashes. The current customer demands are: Stratford, 9 tanks; Stinnett, 10; Perryton, 7; Claude, 8; Hereford, 6; and Channing, 7. Additionally, due to a competitor's bankruptcy, Nortex will be acquiring 9 tanks of processed byproducts that are currently located at a yard in Morse. Because these tanks are already processed, a third-party company can ship these tanks directly to customers in Stratford (at a cost of $546 per tank), Stinnett (at a cost of $485 per tank), and Perryton (at a cost of $365 per tank) without needing to go through one of the processing centersStep by Step Solution
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