You are the recently hired Chief Operations Officer at ABC Inc, a regional firm which produces widgets used in the production of a wide range of automotive products. The company currently owns three production plants, one much newer than the other two. Once the widgets are produced, the firm ships them to one of four warehouses throughout the state where they are placed in inventory until ordered by the end-user. Each widget sells for $150.

Being the good COO that you are, you are always looking for ways to minimize costs and increase profitability. You suspect that there is much room for improvement in this regard. Specifically, you have reason to believe that production and stocking levels of each plant and warehouse could be modified to yield the desired results.

The details of this managerial challenge are as follows:

Production Costs - Plant A -- $100 per widgets

Plant B -- $120 per widgets

Plant C -- $90 per widgets

Plant Capacity - Plant A

Answer rating: 100% (QA)

Let A1 be the number of boards sent from plant A to warehouse1 Similarly we can have A2 ... View the full answer