Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Trudeau Chemicals Inc. has 4 production sites in the province of Quebec. The plants in Valleyfield and Drummondville are the largest, with available capacity of

Trudeau Chemicals Inc. has 4 production sites in the province of Quebec. The plants in Valleyfield and Drummondville are the largest, with available capacity of 1,800 tonnes each. Variable production costs are $25/tonne and $20/tonne respectively. The plants in Trois-Rivires and SainteFoy are smaller, with available capacity of only 800 tonnes each, and higher variable production costs of $40/tonne and $38/tonne respectively. TCI has received a 3,000 tonne order from a customer called Scheer Specialties. Due to quality concerns, Scheer Specialities has requested that no more than 10% of their order be filled from the Drummondville plant, otherwise there are no restrictions on sourcing. TCI pays for the shipping costs to their customers. Freight rates from each plant to the Scheer Specialities location are as follows: Valleyfield - $32/tonne. Drummondville - $28/tonne. Trois-Rivires - $18/tonne. Sainte-Foy - $22/tonne. (a) How many tonnes of product should be produced and shipped from each plant in order to fill the Scheer Specialities order, if TCI wants to minimize total costs (variable production costs plus freight)? (b) What are the total costs to fulfill this order, based on the optimal sourcing plan from (a)? (c) How much total costs could TCI save on filling this order, if the quality issues at Drummondville were resolved and there were no quality restrictions on sourcing

Must be done in excel!!!

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

Step: 3

blur-text-image

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

Value Based Management For Accounts Receivable

Authors: Kimberly Don Ketron

1505911184, 978-1505911183

More Books

Students also viewed these Accounting questions

Question

On what basis are some researchers skeptical of this evidence?

Answered: 1 week ago