The Fagersta Steelworks is currently working on two mines to obtain its iron ore. This iron ore is shipped to either of two distribution facilities. When needed, it then is shipped on to the company's steel plant. The diagram below depicts this distribution network, where M1 and M2 are the two mines, D1 and D2 are the two distribution facilities (holding no inventory), and P is the steel plant. The diagram also shows the maximum monthly amounts produced at the mines and minimum needed at the plant, as well as the shipping cost and the maximum amount that can be shipped per month through some shipping lane.

40 tons MI $2,000/ton D1 produced 30 tons max $1,700/ton $400/ton 100 tons needed 50 tons max P $1,600/ton $800/ton 60 tons M2 $1,100/ton produced D2