Please do not copy the same answer from other cause I will give a thump down. I am looking for someone who can show me understanding and how to solve this problem.

Chemtech is a regional distributor of a small line of chemical products. Chemtech purchases chemicals in bulk from manufacturers and sells them in small quantities to a wide range of customers. Chemtech is considering moving into a new region with 7 cities and establishing a distribution network in that region. Chemtech can establish a distribution network which would include a single distribution warehouse serving all of 7 cities, a network with seven distribution warehouses (one in each city), or any number of distribution warehouses in between. Chemtech could build warehouses of varying sizes in the 7-city region targeted. For simplification, Chemtech could build a "large" or a "small" distribution warehouse in any/all of the 7 cities. Small distribution warehouses will have an annual capacity of 7000 tons and incur an annual fixed cost of $750,000. "Large" warehouses will have an annual capacity of 14,000 tons and incur an annual cost of $1.2 million. Distances from/to each city in the region as well as demands for Chemtech's products (in tons annually) are given in the table on the next page. Assuming a transportation cost of $2.50 per ton-mile is incurred, determine the least-cost distribution network for Chemtech. Annul demand in tons