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The following table presents the per unit transportation cost, the demand at several retail outlets, and the supply available at several manufacturing facilities. Per unit

The following table presents the per unit transportation cost, the demand at several retail outlets, and the supply available at several manufacturing facilities.

Per unit cost (in $) of transportation from Manufacturing Facility to Retail Outlet

Manufacturing Facility

Retail Outlets

New York

(NY)

Chicago (IL)

Los Angeles (CA)

Las Vegas (NV)

Dallas (TX)

Miami (FL)

Seattle (WA)

Toronto (Canada)

Lubbock (TX)

3.98

2.47

3.32

2.31

0.93

3.53

3.66

3.55

Springfield (MO)

2.76

0.74

3.03

3.16

0.90

3.56

3.66

2.36

Provo (UT)

5.55

2.38

1.58

0.84

3.43

6.02

1.86

3.30

Bowling Green (KY)

1.63

0.81

5.41

3.21

1.68

1.99

6.74

1.51

Sioux Falls (SD)

2.46

1.08

3.72

2.55

2.04

3.38

3.02

2.13

Required Quantity at Retail Outlets

New York

Chicago

Los Angeles

Las Vegas

Dallas

Miami

Seattle

Toronto

250000

150000

200000

150000

100000

300000

175000

75000

Quantity of Supply available at Manufacturing Facility

Lubbock

Springfield

Provo

Bowling Green

Sioux Falls

400000

250000

150000

300000

250000

Solve the above problem and compute the transportation schedule and the minimum transportation cost.

The company also has the following further restrictions:

  1. Due to legal restrictions, no intra-state shipment is allowed (that is you cannot ship from a manufacturing facility to a retail outlet in the same state).
  2. Agreement with the Commonwealth of Kentucky requires that at least 50000 units must be exported to a foreign country.
  3. Have an existing transportation contract to ship at least 50000 units from Bowling Green to Chicago.
  4. Have an existing contract to ship at least 50000 units from Sioux Falls to Chicago
  5. No more than half the demand at the New York retail outlet can be shipped from the same manufacturing facility.

Provide the following information: (1) The total transportation costs (including the restrictions), and (2) The incremental cost resulting from each of the five restrictions listed above, in the form of a table as shown below. When computing incremental cost, provide the following information (the cost figures in the table below are NOT the correct cost):

Total Cost

Incremental Cost

Transportation cost without any restrictions

$800

-

Transportation cost with requirement (1)

$1,000

$200

Transportation cost with requirements (1) & (2)

$1,400

$400

Transportation cost with requirements (1), (2), & (3)

$1,750

$350

Transportation cost with requirements (1), (2), (3) & (4)

$2,000

$250

Transportation cost with all requirements

$2,500

$500

The incremental cost table should be included in the Excel

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