Section 2: To identify the right set of suppliers to supply the materials to the proposed inventory backup location

Section 1:

• The distance from the existing Inventory locations in Lucknow, Noida, and Kolkata to the proposed backup inventory location must be more than 2600 kms
• Minimize the cost
• The available datasets include:
  • The distance in kilometers between the existing Inventory locations and the proposed Backup locations.
  • The transportation and holding costs between the existing Inventory locations and the proposed Backup locations.
  • The quantity to be transported from the proposed Backup location to the existing Inventory locations.
  • The cost components associated with the Backup inventory locations.

You need to find answers to the following questions:

1. Find out the optimum backup inventory location

2. Optimal Cost

Existing Inventory Locations vs Proposed Back up locations Transportation & Holding Cost

Holding / Transportation Cost	Lucknow	Noida	Kolkata
Kochi	4	4	8
Coimbatore	6	6	5
Mysore	8	6	5

Quantity to be handled from proposed back up location to existing inventory location

Qty	Lucknow	Noida	Kolkata
Buffer Inv	5000	3000	3000
Buffer Inv	2300	2700	2600
Buffer Inv	1900	2500	2400
Demand	9200	8200	8000

Cost elements for the back up locations

Buffer Inventory	Capacity	Building Cost
Kochi	35000	1100000
Coimbatore	31000	1700000
Mysore	32000	1500000

After deciding on where to build the buffer inventory, suggest the optimum list of suppliers that we need to place the order to send to the Buffer Inventory

The given data:

- List of suppliers -Maximum capacity

- Transportation cost

The quantity to be supplied from identified suppliers to the proposed backup location

To find:

1 . Decision to which suppliers the orders should be placed

2. Optimal Cost

Proposed backup location Vs List of suppliers -Transportation and holding cost

Transportation Cost	S1	S2	S3	S4	S5
Kochi	2	3	9	5	4
Coimbatore	3	5	4	3	1
Mysore	3	3	4	2	3

List of suppliers max capacity

Supplier	Capacity to Ship
S1	5000
S2	8000
S3	7000
S4	9000
S5	6000

The Quantity to be supplied from suppliers to the proposed back up location

Qty	Lucknow	Noida	Kolkata
Demand	9200	8200	8000