Question
The Sentry Lock Corporation manufactures a popular commercial security lock at plants in Macon, Louisville, Detroit, and Phoenix. The per-unit cost of production at each
The Sentry Lock Corporation manufactures a popular commercial security lock at plants in Macon, Louisville, Detroit, and Phoenix. The per-unit cost of production at each plant is $35.50, $37.50, $39.00, and $36.25 respectively while annual production capacity at each plant is 18,000, 15,000, 25,000, and 20,000. Sentrys locks are sold to retailers through wholesale distributor in seven cities across the US. Prices per unit are negotiated individually with the distributors and are given below. Additionally, the unit cost of shipping from each plant to each distributor is summarized below along with the maximum demand for each distributor. Total amounts shipped to distributors cannot exceed these amounts.
Distributors | Tacoma | San Diego | Dallas | Denver | St. Louis | Tampa | Baltimore |
Plants | |||||||
Macon | 2.50 | 2.75 | 1.75 | 2.00 | 2.10 | 1.80 | 1.65 |
Louisville | 1.85 | 1.90 | 1.50 | 1.60 | 1.00 | 1.90 | 1.85 |
Detroit | 2.30 | 2.25 | 1.85 | 1.25 | 1.50 | 2.25 | 2.00 |
Phoenix | 1.90 | .90 | 1.60 | 1.75 | 2.00 | 2.50 | 2.65 |
Maximum Demand | 8,500 | 14,500 | 13,500 | 12,600 | 18,000 | 15,000 | 9,000 |
Price to Distributor | $56 | $58 | $62 | $65 | $49 | $42 | $52 |
Sentry wants to determine how to sell and ship locks from plants to distributors such that profit to Sentry is maximized. Formulate and solve the appropriate spreadsheet model to determine this shipment pattern.
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