Horizon Computers manufactures laptops in Germany, Belgium, and Italy. Because of high tariffs between international trade groups, it is sometimes cheaper to ship partially completed laptops to factories in Puerto Rico, Mexico, and Panama and have them completed before final shipment to U.S. distributors in Texas, Virginia, and Ohio. The cost ($/unit) of the completed laptops plus tariffs and shipment costs from the European plants directly to the United States and supply and demand are as follows:

Alternatively, the unit costs of shipping partially completed laptops to plants for finishing before sending them to the United States are as follows:

Determine the optimal shipments of laptops that will meet demand at the U.S. distributors at the minimum totalcost.

  • CreatedJuly 17, 2014
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