Curly Hair is a Brazilian start-up that offers a wide portfolio of hair products (shampoo, conditioner,...

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Curly Hair is a Brazilian start-up that offers a wide portfolioof hair products (shampoo, conditioner, foam, serum…) specificallydesigned to take care of curly hair.

Curly Hair manufactures its products in three different plantsand sells them in five markets around the country. The plants havea certain manufacturing capacity. In the tables below, you can findthe demand for each market, the capacity of each plant, and thedistances (in miles) between plants and markets.

Demand per market (in liters)
M1375
M2230
M3229
M4246
M5383
Plant capacity (in liters)
P1510
P2700
P3620
Distance from plants to markets (in miles)
M1M2M3M4M5
P12822213844
P21642111435
P32445423149

The operations manager of the company proposes to redesign thetransportation network and start using some distribution centers(DCs) as an intermediary step between plants and final markets.There are four DCs that could be used. These DCs have a certaincapacity and they cannot be used as warehouses (they do not keepstock), products must just flow through them.

In the tables below you will find the maximum capacity of eachDCs, the distances between plants and DCs, and the distancesbetween DC and markets.

Capacity of each DC (in liters)
DC1900
DC2650
DC3850
DC41000
Distance from plants to DCs (in miles)
DC1DC2DC3DC4
P153203624
P247193760
P359291452
Distance from DCs to markets (in miles)
M1M2M3M4M5
DC12131261727
DC22812274339
DC32249163950
DC42545444718

The inbound transportation cost (from plants to DCs) is 2.61Brazilian reals per liter per mile, and the outbound transportationcost (from DCs to markets) is 3.02 Brazilian reals per liter permile. There is also a fixed cost of 5,000 Brazilian reals for eachDC that the company decides to use.

Design a distribution network that can use these DCs. What isthe optimal cost (transportation + fixed cost) under this newsituation?

Answer & Explanation Solved by verified expert
3.7 Ratings (622 Votes)
ANSWERFORMULASDistance from plants to DCs inmilesShipment schedule from plants    See Answer
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