The Chambers Corporation produces and markets an automotive theft deterrent product, which it stocks in various warehouses throughout the country Recently, its market research group compiled a forecast indicating that a significant increase in demand will occur in the near future, after which demand will level off for the foreseeable future The company decides to satisfy this demand by constructing new plant capacity Chambers already has plants in Baltimore and Milwaukee and has no desire to relocate those facilities Each plant is capable of producing 1,600,000 units per year After a thorough search, the company developed three site and capacity alternatives Alternative 1 is to build a 1,600,000 unit plant in Portland Alternative 2 is to build a 1,600,000 unit plant in San Antonio Alternative 3 is to build a 800,000 unit plant in Portland and a 800,000 unit plant in San Antonio The company's four warehouses distribute the product to retailers The market research study provided the following data The logistics department compiled the following cost table specifying the cost per unit to ship the product from each plant to each warehouse in the most economical manner, subject to the reliability of the various carriers involved As one part of the location decision, management wants an estimate of the total distribution cost for each alternative Use the transportation method to calculate these estimates a For Portland (alternative 1) , the optimal cost is (Enter your response as a whole number ) b For San Antonio (alternative 2) , the optimal cost is (Enter your response as a whole number ) c For 2 new plants in Portland and San Antonio (alternative 3) , the optimal cost is (Enter your response as a whole number ) d Since the total optimal cost of which scenario is lowest, the best option is to locate there Warehouse Atlanta (AT) Columbus (CO) Los Angeles (LA) Seattle (SE) Expected Annual Demand 600,000 500,000 900,000 400,000 Plant Warehouse CO LA Baltimore Milwaukee Portland San Antonio AT $0 40 $0 60 $0 90 $0 60 $0 25 $0 20 $0 70 $0 45 $0 90 $0 80 $0 40 $0 45 SE $0 80 $0 65 $0 20 $0 65

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 17, 2024

The Chambers Corporation produces and markets an automotive theft-deterrent product, which it stocks in various warehouses throughout the country. Recently, its market research group compiled

The Chambers Corporation produces and markets an automotive theft-deterrent product, which it stocks in various warehouses throughout the country. Recently, its market research group compiled a forecast indicating that a significant increase in demand will occur in the near future, after which demand will level off for the foreseeable future. The company decides to satisfy this demand by constructing new plant capacity. Chambers already has plants in Baltimore and Milwaukee and has no desire to relocate those facilities. Each plant is capable of producing 1,600,000 units per year. After a thorough search, the company developed three site and capacity alternatives. Alternative 1 is to build a 1,600,000-unit plant in Portland. Alternative 2 is to build a 1,600,000-unit plant in San Antonio. Alternative 3 is to build a 800,000-unit plant in Portland and a 800,000-unit plant in San Antonio. The company's four warehouses distribute the product to retailers. The market research study provided the following data.

image text in transcribed

The logistics department compiled the following cost table specifying the cost per unit to ship the product from each plant to each warehouse in the most economical manner, subject to the reliability of the various carriers involved.

image text in transcribed

As one part of the location decision, management wants an estimate of the total distribution cost for each alternative. Use the transportation method to calculate these estimates.

a. For Portland (alternative 1) , the optimal cost is [ ] (Enter your response as a whole number.)

b. For San Antonio (alternative 2) , the optimal cost is [ ] (Enter your response as a whole number.)

c. For 2 new plants in Portland and San Antonio (alternative 3) , the optimal cost is [ ] (Enter your response as a whole number.)

d. Since the total optimal cost of [ which scenario ] is lowest, the best option is to locate there.

Warehouse Atlanta (AT) Columbus (CO) Los Angeles (LA) Seattle (SE) Expected Annual Demand 600,000 500,000 900,000 400,000 Plant Warehouse CO LA Baltimore Milwaukee Portland San Antonio AT $0.40 $0.60 $0.90 $0.60 $0.25 $0.20 $0.70 $0.45 $0.90 $0.80 $0.40 $0.45 SE $0.80 $0.65 $0.20 $0.65