PART B

Xarah, Inc. moves towards full integration for its silk goods that it is selling to the Canada. It produces goods and sells them at three partner retail outlets in Canada. After production, the silk goods are stored in the company's two warehouses until needed by the retail outlets.

Trucks are used to transport the goods from the two plants to the warehouses and then from the warehouses to the three retail outlets. Xarah, Inc. takes care of all shipping costs.

Using units of full truckloads, Table 1. below shows each plant's monthly output, its shipping cost per truckload sent to each warehouse, and the maximum amount that it can ship per month to each warehouse.

Table 1.

	Unit Shipping Cost	Shipping Capacity
From \ To	Warehouse1	Warehouse2	Warehouse1	Warehouse2	Output
Plant1	$425	$560	125	150	200
Plant 2	$510	$600	175	200	300

For each retail outlet, Table 2. below shows the shipping cost per truckload from each warehouse, and the maximum amount that can be shipped per month from each warehouse. The monthly demand for each retail outlets are 150, 200, and 150.

Table 2.

	Unit Shipping Cost	Shipping Capacity
To From \	Retail Outlet1	Retail Outlet2	Retail Outlet3	Retail Outlet1	Retail Outlet2	Retail Outlet3
Warehouse1	$470	$505	$490	100	150	100
Warehouse2	$390	$410	$440	125	150	75
Demand	150	200	150

Elle asks Cesar to determine a distribution plan that specifies the number of truckloads shipped per month from each plant to each warehouse and from each warehouse to each retail outlet that will minimize the total shipping cost.

1. Draw a network that depicts the company's distribution network. Identify the supply nodes, transshipment notes, and demand nodes on thenetwork.

1. Formulate the network model andsolve.