In the Illinois Quality Parts case study, we first ran the baseline model with a rate of $2/mile for all lanes. Figure 8.14 shows the output of this scenario, showing total cost and total miles traveled out of each warehouse.

a. Even though we applied a rate of $2/mile, the table (total cost / total miles) shows a rate higher than $2/mile for all warehouses. Why is that? 

b. The solution with the best two warehouses shows an average distance to the customers that is 144 miles higher than the optimized baseline with optimal customer assignments. However, the freight costs for the two scenarios are very close (~$74 million). How can you explain this?

c. When we look at the results of the scenarios shown in Figure 8.10, it looks as though some customers are not assigned to their closest warehouse. Why is that? Does that make sense?

Transcribed Image Text:

Total Weight Baseline with Total Miles Warehouse Addison, IL Bridgewater, NJ Riverside, CA 1,091 1,205 604 pped $2/Mile TL(in Millions) Avg S/Mile 2.08 S 2.19 $ 2.26 $35.35 $32.94 $15.22 16.97 15.06 $ 6.73 TOTAL 2,900 $83.51 38.76 $2.15