Question
Tri-County Utilities, Inc., supplies natural gas to customers in a three-county area. The company purchases natural gas from two companies: Southern Gas and Northwest Gas.
Tri-County Utilities, Inc., supplies natural gas to customers in a three-county area. The company purchases natural gas from two companies: Southern Gas and Northwest Gas.
Demand forecasts for the coming winter season are as follows: Hamilton County, 400 units; Butler County, 200 units; and Clermont County, 300 units. Contracts to provide the following quantities have been written: Southern Gas, 500 units; and Northwest Gas, 400 units. Distribution costs for the counties vary, depending upon the location of the suppliers. The distribution costs per unit (in thousands of dollars) are as follows.
From | To | ||
---|---|---|---|
Hamilton | Butler | Clermont | |
Southern Gas | 10 | 20 | 15 |
Northwest Gas | 12 | 15 | 18 |
(1) Create an updated distribution plan assuming Southern Gas becomes the preferred supplier. Distribution Plan with Southern Gas Amount Cost Southern-Hamilton $ Southern-Butler Southern-Clermont $ Northwest-Hamilton Northwest-Butler $ Northwest-Clermont $ Total Cost (ii) Create an updated distribution plan assuming Northwest Gas becomes the preferred supplier. Distribution Plan with Northwest Gas Amount Cost Southern-Hamilton $ Southern-Butler $ Southern-Clermont Northwest-Hamilton Northwest-Butler $ Northwest-Clermont $ Total Cost
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