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The company produces carrots at three plants, which are delivered to two customers via two warehouses. Shipments between plants are allowed after the packaging has
The company produces carrots at three plants, which are delivered to two customers via two warehouses. Shipments between plants are allowed after the packaging has been completed. This also applies to between the warehouses and between the customers. The cost of producing the carrots at each plant is different. As a result, the company is concerned with both production and shipping costs while meeting customer demands. The production capacity of each plant {in tonnes per year), the product cost at each plant {in dollars per tonnes), and the customer demand {in tonnes per year) are summarised in the table below: The management has set the maximum flow for each route to be 150 tonnes. Since sometimes the demands are fluctuated, the company plans to have safety stock of 60 and 50 tonnes at Warehouses 1 and 2 respectively. Based on the information above, the management wants you to design a network flow solution for their strategic plan to minimise the total costs that can meet the demands. Any change in the current scenario (e.g. plant capacities or route capacities) can be proposed if it is reasonable and based on the findings in your analysis (e.g. optimal solution, sensitivity analysis, and alternative optimal solutions). The management expects you to submit a technical report for deciding alternatives as well as for documenting the models for future use. Please ensure that the report is written in a professional format and the spreadsheet model is in a working condition.
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