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, 12 tanks in Spearman, and 13 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. Canadian Spearman Vega Dalhart Pampa Canyon Dalhart Pampa Canyon 210 338 301 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. 351 277 320 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. 90 375 410 425 265 Stratford Stinnett Perryton Claude Hereford Channing 128 141 159 195 181 228 110 78 337 157 The current customer demands are: Stratford, 8 tanks; Stinnett, 10; Perryton, 6; Claude, 7; Hereford, 6; and Channing, 8. Additionally, due to a competitor's bankruptcy, Nortex will be acquiring 7 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 $357 per tank), Stinnett (at a cost of $318 per tank), and Perryton (at a cost of $277 per tank) without needing to go through one of the processing centers. Nortex has partnered with you to conduct an analysis and to make a recommendation that will help it to increase profitability by optimizing the performance of its natural gas byproducts distribution network. In summary, you must develop a distribution network and the corresponding integer programming model, perform an appropriate analysis using Excel, recommend a distribution system to be implemented by Nortex, and present a formal business report discussing your findings and conclusions. To receive full credit for this project, your business report must contain the following items. You may deviate from the given order if you desire; however, it is your responsibility to ensure that all required items are included in your submission and that the order is logical. All items must be typed unless otherwise specified. The Excel spreadsheet containg your formulation, Solver setup, and the solution provided by Solver. (You will not receive credit for a solution that is manually coded without being found via Solver.) Make sure that the names of all group members are on the spreadsheet before submitting it. Transportation of Tanks From Suppliers Canadian Spearman Vega To Proc Centers Dalhart Pampa Canyon 351 277 320 210 338 301 410 425 265 From Proc Center Dalhart Pampa Canyon Stratford Stinnett 90 375 0 128 0 181 Perryton 141 195 0 To Customers Claude Hereford Channing 159 0 78 0 228 110 0 337 157