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The Case Company Oldhaus, a fictive Belgian chocolate company is producing high-quality chocolate pralines. The company is selling the pralines in multiple European markets in
The Case Company Oldhaus, a fictive Belgian chocolate company is producing high-quality chocolate pralines. The company is selling the pralines in multiple European markets in dedicated shops. Globally, the company operates more than 1,500 selling points in more than 51 countries. The largest markets are Germany, USA, France, and Belgium. The company produces near Brussels and ships them to two decentralized warehouses: one in Lille, and one in Hannover. In Europe, the stores are located mostly in the capitals of the countries. Figure 1: Map of European stores (circles) and warehouses (triangles) Question 1: Below you find a table with stores and the per-box shipping cost between the decentralized warehouses and the stores. a) You want to allocate the customers to the given locations by minimizing the transportation cost. Assume Lille and Hannover each have a capacity of 1,500. Please provide an initial solution by applying the "intuitive solution" approach. (4 pts) b) Discuss whether the allocation found in 1a) is the optimal solution for this problem. If the solution is not optimal, describe the approach to find the optimal solution. (4 pts) The company hires a consultancy firm to optimize the operations within the company. He suggests to move the locations of the two warehouses. c) Keeping the allocation of the customers to warehouse the same as in 1a), are the locations of the warehouses optimal, when assuming rectilinear distances? If not, determine the optimal locations (hint: if you want to optimize the locations, the actual coordinates are not needed). ( 6 pts) d) Please mark the optimal locations on the map (provided in ANS) (2 pts) e) How would the location change if the store in Istanbul would be closed and moved to Ankara to have the store in the capital city of Turkey (assume the demand would be the same)? (4 pts)
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