Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Martin - Beck Company operates a plant in St . Louis with an annual capacity of 3 0 , 0 0 0 units. Product

The Martin-Beck Company operates a plant in St. Louis with an annual capacity of 30,000 units. Product is shipped to regional distribution centers located in Boston, Atlanta, and Houston. Because of an anticipated increase in demand, Martin-Beck plans to increase capacity by constructing a new plant in one or more of the following cities: Detroit, Toledo, Denver, or Kansas City. The estimated annual fixed cost and the annual capacity for the four proposed plants are as follows:
Proposed PlantAnnual Fixed CostAnnual CapacityDetroit$175,00040,000Toledo$300,00010,000Denver$375,00020,000Kansas City$500,00030,000
The companys long-range planning group developed forecasts of the anticipated annual demand at the distribution centers as follows:
Distribution CenterAnnual DemandBoston20,000Atlanta30,000Houston20,000
The shipping cost per unit (in dollars) from each plant to each distribution center is as follows:
Distribution CentersPlant SiteBostonAtlantaHoustonDetroit523Toledo434Denver975Kansas City1042St. Louis843
(a)Develop a mixed-integer programming model that could be used to help Martin-Beck determine which new plant or plants to open in order to satisfy anticipated demand. Solve the model and answer the following questions. What is the optimal cost?$ What is the optimal set of plants to open?- Select your answer -Kansas CityDetroit & ToledoToledoDetroitItem 2(b)Using equation 15.1, find a second-best solution. What is the optimal set of plants to open?- Select your answer -DetroitDetroit & DenverDenverDetroit & ToledoItem 3 What is the increase in cost versus the best solution from part (a)?$

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_2

Step: 3

blur-text-image_3

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

Strategic Management

Authors: Cornelius A. De Kluyver

1st Edition

1631570730, 978-1631570735

More Books