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Joy company currently maintains plant in Gazipur, Mymensing

and Faridpur that supply major distribution centers in Dhaka,


Rajshahi, Comilla and Chittagong. ecause o! an e"panding
demand, Joy has decided to open a !orth plant and has
narro#ed the choice to one o! t#o areas $ Feni or %a&ar. 'he
pertinent production and distribution costs, as #ell as the plant
capacities and distribution demands, are sho#n in the
accompanying table(
Distribution
)lant
Dhaka Rajshahi Comill
a
Chittagong Capacity *nit
)roduction
cost
Gazipur 'k.
+,
'k. ,, 'k.
-.
'k. /. 0,... 'k. -1
Mymensing 2, 2. ,. -. /... ,.
Faridpur 2/ -, +/ // 0-... ,+
Feni
3)roposed4
/. 21 /, +5 00... ,2
%a&ar
3)roposed4
2, 2. -0 ,. 00... -6
Forecasted
Demand
0...
.
0+... 0,..
.
6...
7hich o! the ne# possible plant should be opened8
'he !ancy group o#ns !actories in !our to#ns (W, X, Y and Z)
#hich distribute to three Fancy retail dress shops (in A, B and C).
Factory a&ailabilities, projected stores demands, and unit
shipping cost are summarized in the table that !ollo#s 3cell #ith
no cost data implies impossible distribution4(
'o
From
A B C Factory a&ailability
W 'k. 1 9999 'k. - 5+
X , / 1 21
Y 5 6 9999 -/
Z 9999 2 5 06
%tore Demand 00. 2- 20
*se the :ogel ;ppro"imation method to establish an initial
!easible solution and calculate its cost. <s your solution optimal8
;pply M=D< techni>ue or %tepping %tone method to determine
the optimality.
)M Computer %er&ices produces personal computers !rom
component parts it buys on the open market. 'he company can
produce a ma"imum o! 2.. personal computers per month. )M
#ants to determine its production schedule !or the !irst / months
o! the ne# year. 'he cost to produce a personal computer in
January #ill be ?0,+... @o#e&er, )M kno#s the cost o!
component parts #ill decline each month so that the o&erall cost
to produce a )C #ill be ,A less each month. 'he cost o! holding
a computer in in&entory is ?0, per unit per month. Follo#ing is
the demand !or the companyBs computers each month(
Month Deman
d
Mont
h
Deman
d
January 01. ;pril +0.
Februar
y
+/. May -..
March 2-. June 2+.
Determine a production schedule !or )M that #ill minimize total
cost.
<n )re&ious )roblem, suppose that the demand !or personal
computers increases each month, as !ollo#s(
Month Deman
d
Mont
h
Deman
d
January -0. ;pril /+.
Februar
y
2+. May -2.
March ,.. June 21.
<n addition to the regular production capacity o! 2.. units per
month, )M Computer %er&ices can also produce an additional
+.. computers per month by using o&ertime. =&ertime
production adds +.A to the cost o! a personal computer.
Determine a production schedule !or )M that #ill minimize total
cost.
in!ord 'ools manu!actures garden tools. <t uses in&entory,
o&ertime, and subcontracting to absorb demand !luctuations.
C"pected demand, regular and o&ertime production capacity,
and subcontracting capacity are pro&ided in the !ollo#ing table
!or the ne"t !our >uarters !or its basic line o! steel garden tools(
Duarte
r
Deman
d
Regular
Capacity
=&ertime
Capacity
%ubcontracting
Capacity
0 6,... 6,... 0,... 2,...
+ 0+,... 0.,... 0,,.. 2,...
2 0/,... 0+,... +,... 2,...
- 06,... 0+,... +,... 2,...
'he regular production cost per unit is ?+., the o&ertime cost per
unit is ?+,, the cost to subcontract a unit is ?+5, and the
in&entory carrying cost is ?+ per unit. 'he company has 2..
units in in&entory at the beginning o! the year.
Determine the optimal production schedule !or the !our >uarters
to minimize total costs.
%teel mills in three cities produce the !ollo#ing amounts o! steel(
Eocation 7eekly )roduction
3tons4
;. ethlehem 0,.
.
irmingham
+0.
C. Gary 2+.
'hese mills supply steel to !our cities, #here manu!acturing plants ha&e the !ollo#ing
demand(
Eocation 7eekly Demand
3tons4
0. Detroit 02.
+. %t.
Eouis
5.
2. Chicago 01.
-. For!olk +-.
%hipping costs per ton o! steel are as !ollo#s(
'o 3cost4
Fro
m
0 + 2 -
; ?0
-
? 6 ?0
/
?0
1
00 1 5 0/
C 0/ 0+ 0. ++
ecause o! a truckersB strike, shipments are prohibited !rom irmingham to Chicago.
@orizon Computers manu!actures laptops in Germany, elgium, and <taly. ecause o!
high tari!!s bet#een international trade groups, it is sometimes cheaper to ship partially
completed laptops to !actories in )uerto Rico, Me"ico, and )anama and ha&e them
completed be!ore !inal shipment to *.%. distributors in 'e"as, :irginia, and =hio. 'he
cost 3?Gunit4 o! the completed laptops plus tari!!s and shipment costs !rom the Curopean
plants directly to the *nited %tates and supply and demand are as !ollo#s(
*.%. Distributor
Curopean )lant
5.
'e"as
1.
:irginia
6.
=hio
%upply
30,...s4
0. Germany ?+,/.. ?0,6.. ?+,2.. ,.+
+. elgium +,+.. +,0.. +,/.. /.2
2. <taly 0,1.. +,+.. +,,.. -.,
Demand
30,...s4
+.0 2.5 5.1
;lternati&ely, the unit costs o! shipping partially completed laptops to plants !or !inishing
be!ore sending them to the *nited %tates are as !ollo#s(
Factory
Curopean
)lant
-. )uerto
Rico
,.
Me"ico
/.
)anama
0. Germany ?0,-.. ?0,+.. ?0,0..
+. elgium 0,/.. 0,0.. 6..
2. <taly 0,,.. 0,-.. 0,+..
*.%. Distributor
Factory
5.
'e"as
1.
:irginia
6.
=hio
-. )uerto
Rico
?1.. ?5.. ?6..
,. Me"ico /.. 1.. 0,0..
/. )anama 6.. 5.. 0,+..
0. Dra# a net#ork o! the problem.
Formulate a linear programming to determine the optimal shipments o! laptops that #ill
meet demand at the *.%. distributors at the minimum total cost.
; rental car company has an imbalance o! cars at se&en o! its locations. 'he !ollo#ing net#ork
sho#s the locations o! concern 3the nodes4 and the cost to mo&e a car bet#een locations. ;
positi&e number by a node indicates an e"cess supply at the node, and a negati&e number
indicates an e"cess demand.
De&elop a linear programming model !or restoring the proper balance at the locations.
7orld Foods, <nc., imports !ood products such as meats, cheeses, and pastries to the
*nited %tates !rom #arehouses at ports in @amburg, Marseilles, and Ei&erpool. %hips
!rom these ports deli&er the products to For!olk, Fe# Hork, and %a&annah, #here they
are stored in company #arehouses be!ore being shipped to distribution centers in
Dallas, %t. Eouis, and Chicago. 'he products are then distributed to specialty !ood stores
and sold through catalogs. 'he shipping costs 3?G0,... lb.4 !rom the Curopean ports to
the *.%. cities and the a&ailable supplies 30,... lb.4 at the Curopean ports are pro&ided
in the !ollo#ing table(

*.%. City

Curopean
)ort
-. For!olk ,. Fe#
Hork
/.
%a&annah
%uppl
y
0. @amburg ?-+. ?26. ?/0. ,,
+. Marseilles ,0. ,6. -5. 51
2. Ei&erpool -,. 2/. -1. 25
'he transportation costs 3?G0,... lb.4 !rom each *.%. city o! the three distribution centers
and the demands 30,... lb.4 at the distribution centers are as !ollo#s(

Distribution Center
7arehouse 5.
Dallas
1. %t.
Eouis
6.
Chicago
-. For!olk ?5, ?/2 ?10
,. Fe# Hork 0+, 00. 6,
/.
%a&annah
/1 1+ 6,

/. -, ,.
Formulate a linear programming to determine the optimal shipments bet#een the
Curopean ports and the #arehouses and the distribution centers to minimize total
transportation costs.
; national catalog and <nternet retailer has three #arehouses and three major
distribution centers located around the country. Formally, items are shipped
directly !rom the #arehouses to the distribution centersI ho#e&er, each o! the
distribution centers can also be used as an intermediate transshipment point.
'he transportation costs 3?Gunit4 bet#een #arehouses and distribution centers,
the supply at the #arehouses 30.. units4, and the demand at the distribution
centers 30.. units4 !or a speci!ic #eek are sho#n in the !ollo#ing table(
Distribution Center
7arehous
e
; C %uppl
y
0 ?0+ ?00 ?5 5.
+ 1 / 0- 1.
2 6 0. 0+ ,.
Demand /. 0.. -.
'he transportation costs 3?Gunit4 bet#een the distribution centers are
Distribution Center
Distribution
Center
; C
; ? ?1 ?2
0 +
C 5 +
Determine the optimal shipments bet#een #arehouses and distribution centers
to minimize total transportation costs.
Jan'ech Corporation is a global distributor o! electrical parts and components.
<ts customers are electronics companies in the *nited %tates, including computer
manu!acturers and audioG&isual product manu!acturers. 'he company contracts
to purchase components and parts !rom manu!acturers in Russia, Castern and
7estern Curope, and the Mediterranean, and it has them deli&ered to
#arehouses in three Curopean ports, Gdansk, @amburg, and Eisbon. 'he
&arious components and parts are loaded into containers based on demand !rom
*.%. customers. Cach port has a limited !i"ed number o! containers a&ailable
each month. 'he containers are then shipped o&erseas by container ships to the
ports o! For!olk, Jackson&ille, Fe# =rleans, and Gal&eston. From these
seaports, the containers are typically coupled #ith trucks and hauled to inland
ports in Front Royal 3:irginia4, Jansas City, and Dallas. 'here are a !i"ed number
o! !reight haulers a&ailable at each port each month. 'hese inland ports are
sometimes called K!reight &illages,K or intermodal junctions, #here the containers
are collected and trans!erred !rom one transport mode to another 3i.e., !rom truck
to rail or &ice &ersa4. From the inland ports, the containers are transported to
Jan'echBs distribution centers in 'ucson, )ittsburgh, Den&er, Fash&ille, and
Cle&eland. Follo#ing are the handling and shipping costs 3?Gcontainer4 bet#een
each o! the embarkation and destination points along this o&erseas supply chain
and the a&ailable containers at each port(
U.S. Port
Curopean
)ort
-.
For!olk
,.
Jackson&ille
/. Fe#
=rleans
5.
Gal&eston
;&ailable
Containers
0. Gdansk ?0,5+, ?0,1.. ?+,2-, ?+,5.. 0+,
+. @amburg 0,1+, 0,5,. 0,6-, +,2+. +0.
2. Eisbon +,./. +,05, +,.,. +,-5, 0/.
Inland Port
*.%. )ort
1.
Dallas
6. Jansas
City
0.. Front
Royal
<ntermodal Capacity
3containers4
-. For!olk ?1+, ?,-, ? 2+. 1,
,. Jackson&ille 5,. /5, -,. 00.
/. Fe# =rleans 2+, /., /6. 0..
5. Gal&eston +5. ,0. 0,.,. 02.
<ntermodal Capacity
3containers4 05. +-. 0-.

Distibution Center
<nland )ort
00.
'ucson
0+.
Den&er
02.
)ittsburgh
0-.
Fash&ille
0,.
Cle&eland
1. Dallas ?-,. ?12. ?,/, ?-+. ?6/.
6. Jansas
City
11. ,+. -,. 21. //.
0.. Front
Royal
0,2,. 26. 0,+.. -,. 20.
Demand 1, /. 0., ,. 0+.
Formulate and sol&e a linear programming model to determine the optimal
shipments !rom each point o! embarkation to each destination along this supply
chain that #ill result in the minimum total shipping cost.
Case Problem
GE=;E %@<))<FG ;' CRJCF ;));RCE <F'CRF;'<=F;E
Crken ;pparel <nternational manu!actures clothing items around the #orld. <t has
currently contracted #ith a *.%. retail clothing #holesale distributor !or menBs
goatskin and lambskin leather jackets !or the ne"t Christmas season. 'he
distributor has distribution centers in <ndiana, Forth Carolina, and )ennsyl&ania.
'he distributor supplies the leather jackets to a discount retail chain, a chain o!
mall bouti>ue stores, and a department store chain. 'he jackets arri&e at the
distribution centers un!inished, and at the centers the distributor adds a uni>ue
lining and label speci!ic to each o! its customer. 'he distributor has contracted
#ith Crken to deli&er the !ollo#ing number o! leather jackets to its distribution
centers in late !all(
Distribution Center Goatskin Jackets Lambskin Jackets
<ndiana 0,... 51.
Forth Carolina 0,-.. 6,.
)ennsyl&ania 0,/.. 0,0,.
Crken has tanning !actories and clothing manu!acturing plants to produce leather
jackets in %pain, France, <taly, :enezuela, and razil. <ts tanning !acilities are in
Mende in France, Foggia in <taly, %aragosa in %pain, Feira in razil, and Cl 'igre
in :enezuela. <ts manu!acturing plants are in Eimoges, Faples, and Madrid in
Curope and in %ao )aulo and Caracas in %outh ;merica. Follo#ing are the
supplies o! a&ailable leather !rom each tanning !acility and the processing
capacity at each plant 3in pounds4 !or this particular order o! leather jackets(
Tanning Factory Goatskin Supply lb.! Lambskin Supply lb.!
Mende -,... -,-..
Foggia 2,5.. ,,2..
%aragosa /,,.. -,/,.
Feira ,,0.. /,1,.
Cl 'igre 2,/.. ,,5..
Plant Production Capacity lb.!
Madrid 5,1..
Plant Production Capacity lb.!
Faples ,,5..
Eimoges 1,+..
%ao
)aulo
5,/..
Caracas /,1..
<n the production o! jackets at the plants, 25.,A o! the goatskin leather and ,.A
o! the lambskin leather is #aste 3i.e., it is discarded during the production
process and sold !or other byproducts4. ;!ter production, a goatskin jacket
#eighs appro"imately 2 pounds, and a lambskin jacket #eighs appro"imately +.,
pounds 3neither #ith linings, #hich are added in the *nited %tates4.
Follo#ing are the costs per pound, in *.%. dollars, !or tanning the uncut leather,
shipping it, and producing the leather jackets at each plant(
Plant "#lb.!
'anning
Factory
Madri
d
Faple
s
Eimoge
s
%ao
)aulo
Caraca
s
Mende ?+- ?++ ?0/ ?+0 ?+2
Foggia 20 05 ++ 06 ++
%aragosa 01 +, +1 +2 +,
Feira 0/ 01
Cl 'igre 0- 0,
Fote that the cost o! jacket production is the same !or goatskin and lambskin.
;lso, leather can be tanned in France, %pain, and <taly and shipped directly to
the %outh ;merican plants !or jacket production, but the opposite is not possible
due to high tari!! restrictions 3i.e., tanned leather is not shipped to Curope !or
production4.
=nce the leather jackets are produced at the plants in Curope and %outh
;merica, Crken transports them to ports in Eisbon, Marseilles, and Caracas and
then !rom these ports to *.% ports in Fe# =rleans, Jackson&ille, and %a&annah.
'he a&ailable shipping capacity at each port and the transportation costs !rom
the plants to the ports are as !ollo#s(
Port "#lb.!
)lant Eisbo
n
Marseille
s
Caraca
s
Madrid ..5, 0..,
Faples 2.-, 0.2,
Eimoges +.+, ../.
%ao )aulo 0.0,
Caracas ..+.
Capacity
3lb.4
1,... ,,,.. 6,...
'he shipping costs 3?Glb.4 !rom each port in Curope and %outh ;merica to the
*.%. ports and the a&ailable truck and rail capacity !or transport at the *.%. ports
are as !ollo#s(
U.S. Port "#lb.!
)ort Fe#
=rleans
Jackson&ill
e
%a&anna
h
Eisbon ?+.2, ?0.6. ?0.1.
Marseilles 2.0. +.-. +...
Caracas 0.6, +.0, +.-.
Capacity
3lb.4
1,... ,,+.. 5,,..
'he transportation costs 3?Glb.4 !rom the *.%. ports to the three distribution
centers are as !ollo#s(
Distribution Center "#lb.!
*.%. )ort <ndiana Forth
Carolina
)ennsyl&ani
a
Fe#
=rleans
?../, ?..,+ ?..15
Jackson&ille ..-2 ..-0 ../,
%a&annah ..21 ..2- ..,.
Crken #ants to determine the least costly shipments o! material and jackets that
#ill meet the demand at the *.%. distribution centers. De&elop a transshipment
model !or Crken that #ill result in a minimum cost solution.