Mauriceâ€™s Pump Manufacturing Company currently maintains plants in Atlanta and Tulsa that supply major distribution centers...

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Mauriceâ€™s Pump Manufacturing Company currently maintains plantsin Atlanta and Tulsa that supply major distribution centers in LosAngeles and New York. Because of an expanding demand, Maurice hasdecided to open a third plant and has narrowed the choice to one oftwo citiesâ€”New Orleans or Houston. The pertinent production anddistribution costs, as well as the plant capacities anddistribution center demands, are shown in the following table.
Plants Distribution Centers
Location Capacity Production Cost (per unit) LA New York
Atlanta (existing) 600 $6 $8 $5
Tulsa (existing) 900 $5 $4 $7
New Orleans (Proposed) 500 $4 (anticipated) $5 $6
Houston (Proposed) 500 $3 (anticipated) $4 $6
Forecast Demand 800 Â Â Â Â Â Â Â 1,200
Help the company decide which of the two proposed plant shouldbe opened. Create a spreadsheet model of this situation and solveusing Solver. Clearly show the values of the decision variables andthe objective.

Answer & Explanation Solved by verified expert

3.6 Ratings (482 Votes)

Let be the quantity shipped from location i to the distribution centerj wherei1234 for locations Atlanta Tulsa New Orleans Houstonrespectivelyj12 for distribution centers LA New York respectivelyWe also create the following indicator variablesif the new plant is opened at New Orleans else if the new plant is See Answer

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Plants	Distribution Centers
Location	Capacity	Production Cost (per unit)	LA	New York
Atlanta (existing)	600	$6	$8	$5
Tulsa (existing)	900	$5	$4	$7
New Orleans (Proposed)	500	$4 (anticipated)	$5	$6
Houston (Proposed)	500	$3 (anticipated)	$4	$6
Forecast Demand			800	Â Â Â Â Â Â Â 1,200