A2 ACME Manufacturing serves a number of markets from the company's manufacturing plant and the company's warehouses. Th

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A2 Acme Manufacturing Serves A Number Of Markets From The Company S Manufacturing Plant And The Company S Warehouses Th 1 (51.91 KiB) Viewed 18 times

A2 ACME Manufacturing serves a number of markets from the company's manufacturing plant and the company's warehouses. The distribution manager must decide on a plan for shipping product A from the manufacturing plant and the warehouse to the markets. Acme has 100 of product A available to be shipped from the manufacturing plant and 45 of product A available to be shipped from the warehouse. The market demands are given in the table 2.1 below together with the transportation cost per unit. These transportation costs include handling costs at the facilities and at the markets, and trucking (mileage) costs. Table 2.1: Demand and transportation cost data From/to M1 M2 M3 M4 M5 M6 M7 MB Supply Plant 14 24 21 20 21 5 19 17 30 100 Warehouse 24 15 28 20 18.5 19.5 24.528.00 45 Demand |22|14|18|17| The distribution manager at ACME wishes to investigate the potential benefits of locating a cross docking facility near the markets 4,5,6. The facility would receive products from the plant and the warehouse and immediately dispatch them to the three markets. Table 2.2 contains the relevant new transportation data. In addition, there is a handling charge of $2 for each product A transhipped through the cross dock facility which has a maximal flow capacity of 30 product A per week. Table 2.2: Additional transportation cost data Cross dock From/to Facility Plant From/to MARKET 4MARKET MARKET 11 Cross-Dock 6 5 5 Warehouse 10 Facility a) b) Draw a schematic representation of the ACME distribution problem showing all potential distribution flows. (3 MARKS) Construct a LP to minimise the cost of meeting market demand. Explain all steps in the formulation of the problem. Please note that you do not have to solve the LP. (10 MARKS)