Question: Allen Air Conditioning manufactures room air conditioners at plants in
Allen Air Conditioning manufactures room air conditioners at plants in Houston, Phoenix, and Memphis. These are sent to regional distributors in Dallas, Atlanta, and Denver. The shipping costs vary, and the company would like to find the least-cost way to meet the demands at each of the distribution centers. Dallas needs to receive 800 air conditioners per month, Atlanta needs 600, and Denver needs 200. Houston has 850 air conditioners available each month, Phoenix has 650, and Memphis has 300. The shipping cost per unit from Houston to Dallas is $ 8, to Atlanta $ 12, and to Denver $ 10. The cost per unit from Phoenix to Dallas is $ 10, to Atlanta $ 14, and to Denver $ 9. The cost per unit from Memphis to Dallas is $ 11, to Atlanta $ 8, and to Denver $ 12. How many units should owner Stephen Allen ship from each plant to each regional distribution center? What is the total transportation cost? (Note that a “dummy” destination is needed to balance the problem.)
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