A producer of dog food is trying to decide whether they should change the number and locations of their warehouses to better meet projected demand over the next three years. They do a study and determine that their transportation and warehousing costs will be $51 million if they stick with their current structure. They have determined that if they close two warehouses and open two new warehouses, their costs will drop to $50.5 million. Assume that all other costs stay the same. Should they make the change?
Answer to relevant QuestionsYou need to set up a mathematical optimization model. Assume you are modeling a supply chain for a business with ten warehouses and 1,000 customers. If you set up the model to minimize cost, set the decision variables to ...If the planners of Logistica had been lucky enough for their first calculation to have picked an existing city, why should they still analyze other cities? In the mathematical formulation, what does the X decision variable mean? Why does it have to take on a value of 0 or 1? If the mathematical formulation only had an objective that maximized the amount of demand within a certain limit (say, 800km) and no other objective or restriction on the distance, how would customers outside of the limit be ...In the formulation of this optimization problem, we put in a constraint that limits the number of warehouses to P. If we did not have this in the model, why, in general, would the optimization choose to open and use every ...
Post your question