50.1K

Verified Solution

Link Copied!

Fork Motor Company is an automobile manufacturer operating in the US.

It has divided its market into three regions and has built three regional distribution centers (RDC) to serve these markets. The RDCs are located in California, Florida and Texas.

The annual demand at each regional distribution center is estimated as follows and the company wants to meet all the demand.

- RDC California: 1.5M automobiles (i.e., 1.5 million)

- RDC Florida: 0.5M automobiles

- RDC Texas: 1M automobiles

Fork Motor has two plants in Michigan and Nevada and wants to distribute the automobiles to the RDCs at the lowest cost. So they need to decide how many cars to ship from each of the plants to each of the RDCs to achieve minimum cost. You are asked to model and solve this allocation problem.

Below, you are given the shipping distance between Fork Motors facilities in miles.

	Plant Michigan	Plant Nevada
RDC California	2000	300
RDC Florida	1000	1300
RDC Texas	1200	800

The head of supply chain informs you that you need to consider the capacity limits of the plants. The Michigan plant is much larger than the one in Nevada. He adds that the capacity limits are as follows:

- Plant Michigan: 2.5M

- Plant Nevada: 0.7M

The company estimates that transportation of each car will cost 8.53 dollars per mile.

What is the minimum cost of shipping cars to RDCs in million dollars?

Answer & Explanation Solved by verified expert

See Answer