A company must decide which of its factories to keep operational and how to distribute its products from these factories to various customers. The goal is to minimize the total costs, which include the fixed costs of operating each factory and the transportation costs, while ensuring that the demand of each customer is met. Given Data: Factories (with production capacities and fixed operating costs):   Factory 1 (F1): Capacity = 500 units, Fixed Cost = $10,000 Factory 2 (F2): Capacity = 400 units, Fixed Cost = $8,000 Factory 3 (F3): Capacity = 600 units, Fixed Cost = $12,000 Customers (with demand):   Customer A: Demand = 300 units Customer B: Demand = 350 units Customer C: Demand = 250 units Customer D: Demand = 200 units Transportation Costs (per unit) from Factories to Customers:   Customer A        Customer B        Customer C        Customer D F1           $2           $3           $2.5        $4 F2           $3           $2.5        $3           $2 F3           $2.5        $3.5        $2           $3 Objective: Determine which factories to operate and the optimal way to distribute products from these factories to customers in order to minimize the total costs, comprising both fixed operational costs and variable transportation costs. Carefully write the mathematical formulations including the constraints. Using Excel Solver, Minimize the total cost of operating factories, the distribution center, and transporting goods from factories to the DC and then to customers.

Oh no! Our experts couldn't answer your question.

Don't worry! We won't leave you hanging. Plus, we're giving you back one question for the inconvenience.

Submit your question and receive a step-by-step explanation from our experts in as fast as 30 minutes.
You have no more questions left.
Message from our expert:
Your question requires excel software, which is beyond our current scope. A question credit has been added to your account for future use.
Your Question:

A company must decide which of its factories to keep operational and how to distribute its products from these factories to various customers. The goal is to minimize the total costs, which include the fixed costs of operating each factory and the transportation costs, while ensuring that the demand of each customer is met.

Given Data:

Factories (with production capacities and fixed operating costs):

 

Factory 1 (F1): Capacity = 500 units, Fixed Cost = $10,000

Factory 2 (F2): Capacity = 400 units, Fixed Cost = $8,000

Factory 3 (F3): Capacity = 600 units, Fixed Cost = $12,000

Customers (with demand):

 

Customer A: Demand = 300 units

Customer B: Demand = 350 units

Customer C: Demand = 250 units

Customer D: Demand = 200 units

Transportation Costs (per unit) from Factories to Customers:

 

Customer A        Customer B        Customer C        Customer D

F1           $2           $3           $2.5        $4

F2           $3           $2.5        $3           $2

F3           $2.5        $3.5        $2           $3

Objective:

Determine which factories to operate and the optimal way to distribute products from these factories to customers in order to minimize the total costs, comprising both fixed operational costs and variable transportation costs.

  • Carefully write the mathematical formulations including the constraints.
  • Using Excel Solver, Minimize the total cost of operating factories, the distribution center, and transporting goods from factories to the DC and then to customers.

 

Recommended textbooks for you
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
Algebra
ISBN:
9781285463247
Author:
David Poole
Publisher:
Cengage Learning
College Algebra
College Algebra
Algebra
ISBN:
9781938168383
Author:
Jay Abramson
Publisher:
OpenStax
College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning