Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The computer distributor Riglen owns 3 warehouses. These are at Watford, Bristol, and Birmingham. Goods are delivered to retail outlets in London, Wales, the North

image text in transcribed

The computer distributor Riglen owns 3 warehouses. These are at Watford, Bristol, and Birmingham. Goods are delivered to retail outlets in London, Wales, the North West (NW), the North East (NE) and the South West (SW). Goods from the warehouses are delivered in standard size boxes. The requirements for one particular day last week are shown in the table below. Delivery requirements Retail outlets Number of boxes Number of boxes London 530 Wales 350 NW 450 NE 500 SW 400 It is not always possible to fully meet demand and any shortfall is made up on the next delivery. This was the case for the day being considered and following number of boxes were allocated for delivery to the 5 regions by the 3 warehouses: Watford(Wat): 500 boxes; Birmingham (Birm): 900 boxes Bristol (Bri): 500 boxes. The average cost per box is shown in the table below: Average cost per box Warehouse Wat Birm Bri Destination London 1.80 4.50 3.30 Wales 5.00 4.10 2.20 NW 5.00 3.40 4.70 NE 7.10 10.00 7.90 HA SW 2.90 4.70 2.10 Question 1 (15 marks) Use the transportation algorithm (North West Corner Rule and Stepping Stone Method) to allocate the goods from each warehouse to each retail outlet as cheaply as possible. What is the cost of your allocation? (Please show all the necessary workings and steps to gain the maximum possible marks) Question 2 (8 marks) Is there an alternative solution to the one found in part (a). What is it? (Please show all the necessary workings and steps to gain the maximum possible marks) Question 3 (3 marks) What would be the additional cost per box of using the Bristol to London route. Question 4 (4 marks) If more efficient vehicles could be used on the Birmingham to North East route the cost per box would be reduced. By how much does this cost have to fall before it becomes economic to use this route

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financing Nonprofits Putting Theory Into Practice

Authors: Young, Dennis R.

1st Edition

0759109885,0759114129

More Books

Students also viewed these Finance questions