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: Annual Capacity 40,000 10,000 20,000 30,000 Proposed Plant Detroit Toledo Denver Kansas City The company's long-range planning group developed forecasts of the anticipated annual demand at the distribution centers as follows: Distribution Center Annual Demand 20,000 30,000 20,000 The shipping cost per unit from each plant to each distribution center is as follows Distribution Centers Plant Site Detroit Toledo Denver Kansas City St. Louis Boston Annual Fixed Cost $175,000 $300,000 $375,000 $500,000 Atlanta Houston Boston S 4 9 10 H Atlanta 2 3 7 Houston 4 5 (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? 685000 What is the optimal set of plants to open? Detroit (b) Using equation 13.1, find a second-best solution, What is the optimal set of plants to open? Detroit & Toledo What is the increase in cost versus the best solution from part (a)? 90000 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: Annual Capacity 40,000 10,000 20,000 30,000 Proposed Plant Detroit Toledo Denver Kansas City The company's long-range planning group developed forecasts of the anticipated annual demand at the distribution centers as follows: Distribution Center Annual Demand 20,000 30,000 20,000 The shipping cost per unit from each plant to each distribution center is as follows Distribution Centers Plant Site Detroit Toledo Denver Kansas City St. Louis Boston Annual Fixed Cost $175,000 $300,000 $375,000 $500,000 Atlanta Houston Boston S 4 9 10 H Atlanta 2 3 7 Houston 4 5 (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? 685000 What is the optimal set of plants to open? Detroit (b) Using equation 13.1, find a second-best solution, What is the optimal set of plants to open? Detroit & Toledo What is the increase in cost versus the best solution from part (a)? 90000
