For the transportation example in this chapter, suppose that television sets not shipped were to incur storage costs of $9 at Cincinnati, $6 at Atlanta, and $7 at Pittsburgh. How would these storage costs be reflected in the linear programming model for this example problem, and what would the new solution be, if any?
The Zephyr Television Company is considering leasing a new warehouse in Memphis. The new warehouse would have a supply of 200 television sets, with shipping costs of $18 to New York, $9 to Dallas, and $12 to Detroit. If the total transportation cost for the company (ignoring the cost of leasing the warehouse) is less than with the current warehouses, the company will lease the new warehouse. Should the warehouse be leased?
If supply could be increased at any one warehouse, which should it be? What restrictions would there be on the amount of the increase?