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) |
---|
M1 | 375 |
M2 | 230 |
M3 | 229 |
M4 | 246 |
M5 | 383 |
Plant capacity (in liters) |
---|
P1 | 510 |
P2 | 700 |
P3 | 620 |
Distance from plants to markets (in miles) |
---|
| M1 | M2 | M3 | M4 | M5 |
P1 | 28 | 22 | 21 | 38 | 44 |
P2 | 16 | 42 | 11 | 14 | 35 |
P3 | 24 | 45 | 42 | 31 | 49 |
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) |
---|
DC1 | 900 |
DC2 | 650 |
DC3 | 850 |
DC4 | 1000 |
Distance from plants to DCs (in miles) |
---|
| DC1 | DC2 | DC3 | DC4 |
P1 | 53 | 20 | 36 | 24 |
P2 | 47 | 19 | 37 | 60 |
P3 | 59 | 29 | 14 | 52 |
Distance from DCs to markets (in miles) |
---|
| M1 | M2 | M3 | M4 | M5 |
DC1 | 21 | 31 | 26 | 17 | 27 |
DC2 | 28 | 12 | 27 | 43 | 39 |
DC3 | 22 | 49 | 16 | 39 | 50 |
DC4 | 25 | 45 | 44 | 47 | 18 |
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?