The Darby company manufactures and distributes meters used to measure electric power consumption. The company started with a small production plant in El Paso and gradually built a customer base throughout Texas. A distribution centre was established in Fort Worth, Texas, and later, as business expanded, a second distribution centre was established in Santa Fe, New Mexico. The El Paso plant was expanded when the company began marketing its meters in Arizona, California, Nevada, and Utah. With the growth of the West Coast business, the Darby company opened a third distribution centre in Las Vegas and just two years ago opened a second production plant in San Bernardino, California. Manufacturing costs differ between the companys production plants. The cost of each meter produced at the El Paso plant is $10.50. The San Bernardino plant utilises newer and more efficient equipment as a result manufacturing cost is $0.50 per meter less than at the El Paso plant. Due to the companys rapid growth, not much attention had been paid to the efficiency of its supply chain, but Darbys management decided that it is time to address this issue. The cost of shipping a meter from each of the two plants to each of the three distribution centres is shown in

Table 1.

The quarterly production capacity is 30,000 meters at the older El Paso plant and 20,000 meters at the San Bernardino plant. Note that no shipments are allowed from the San Bernardino plant to the Fort Worth distribution centre. The company serves nine customer zones from the three distribution centres. The forecast of the number of meters needed in each customer zone for the next quarter is shown in