Question.

A company can ship its product from any of its three factories, F1, F2, and F3, to any of its retail outlets, R1, R2, and R3. The capacity, demand, and shipping cost information is provided as follows: Demand (units) Capacity (units) R1: 300 F1: 250 R2: 500 F2: 350 R3: 200 F3: 400 Shipping Cost/unit ($)

R1 R2 R3

F1 1 3 2

F2 3 4 2

F3 2 2 3

The company wants to come up with an optimal shipping strategy that will allow it to minimize its total shipping cost.

A. Formulate the LP model to minimize the total shipping cost.

B. Use the Sensitivity and Answer Reports to answer the following questions:

1. Will any of the retail outlets experience any shortages in meeting their demand requirements if we implement the optimal solution?

2. Will any of the factories have any remaining quantities of the product if we implement the optimal solution?

3. What is the total minimal shipping cost?