Question 4 Your firm is distributing a single type of product from warehouses in Brussels, Amsterdam, Barcelona. Based on the previous observations, gasoline and maintenance costs of transporting a good from one city to another is observed as 1.5 Euro for each kilometre that the distributing truck makes. Even though the product you were selling is heavy machinery for construction sites, you were managing a high volume of sales. Hovewer, your business is seriously affected due to the COVID-19 outbreak. The pandemic resulted in a reduction in sales, and your company can distribute a single machine to each of the construction companies in Antwerp, Athens, Berlin next month. At the beginning of the next month, a single machine will be available as inventory for each of your warehouses except for Barcelona. The Barcelona warehouse will have two machines available. a) Find the optimum warehouse/construction site assignment for next month to minimize the total gasoline and maintenance cost for your company. b) Your new accountant introduced a holding cost to your books. Suppose that at the end of the month, $1000 of holding cost will incur for excessive inventory, if there is any. Update your model, don't solve. Driving distances (in km) between cities are given in the table below. Amsterdam Antwerp Athens Barcelona Brussels Calais Cologne Amsterdam 160 1639 Antwerp Berlin Bern 0 3082 875 209 385 280 649 723 160 0 2766 1465 704 46 211 237 2562 Athens 3082 2766 0 3312 2552 2627 2976 Barcelona 1639 1465 3312 0 1899 913 1399 1539 3021 1419 782 655 649 723 2552 986 936 575 Berlin Bern 1899 913 0 986 875 704 2627 0 854 583 209 46 1419 782 655 0 212 219 Brussels Calais Cologne 3021 2976 385 211 1399 936 854 212 0 431 280 237 2562 1539 575 583 219 431 0 Question 4 Your firm is distributing a single type of product from warehouses in Brussels, Amsterdam, Barcelona. Based on the previous observations, gasoline and maintenance costs of transporting a good from one city to another is observed as 1.5 Euro for each kilometre that the distributing truck makes. Even though the product you were selling is heavy machinery for construction sites, you were managing a high volume of sales. Hovewer, your business is seriously affected due to the COVID-19 outbreak. The pandemic resulted in a reduction in sales, and your company can distribute a single machine to each of the construction companies in Antwerp, Athens, Berlin next month. At the beginning of the next month, a single machine will be available as inventory for each of your warehouses except for Barcelona. The Barcelona warehouse will have two machines available. a) Find the optimum warehouse/construction site assignment for next month to minimize the total gasoline and maintenance cost for your company. b) Your new accountant introduced a holding cost to your books. Suppose that at the end of the month, $1000 of holding cost will incur for excessive inventory, if there is any. Update your model, don't solve. Driving distances (in km) between cities are given in the table below. Amsterdam Antwerp Athens Barcelona Brussels Calais Cologne Amsterdam 160 1639 Antwerp Berlin Bern 0 3082 875 209 385 280 649 723 160 0 2766 1465 704 46 211 237 2562 Athens 3082 2766 0 3312 2552 2627 2976 Barcelona 1639 1465 3312 0 1899 913 1399 1539 3021 1419 782 655 649 723 2552 986 936 575 Berlin Bern 1899 913 0 986 875 704 2627 0 854 583 209 46 1419 782 655 0 212 219 Brussels Calais Cologne 3021 2976 385 211 1399 936 854 212 0 431 280 237 2562 1539 575 583 219 431 0
