Question

A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this material, which must be shipped to three manufacturing plants. The current network has the following characteristics:

Costs	plant 1	plant 2	plant 3	supply
raw material source 1	$6	$8	$9	400
raw material source 2	$4	$7	$3	600
demand	500	500	500	supply < demand

The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Solve with the transportation method. Which site should be selected?

site should be selected?

Answer 1

Hi,

Please find answer as below.

If you like the answer, please up vote.

Answer

I have used excel solver to solve the problem. I have attached the snapshot of Input data, formulas and constraints used along with the optimal solution.

Candidate A is selected to minimize the cost.

1. Snapshot of Input Data

2. Snapshot of Formulas used

3. Snapshot of Constraints used

4. Snapshot of Optimal Solution