? BestChip (BC) is a large nationwide corporation that produces low-fat snack products for an expanding market
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BestChip (BC) is a large nationwide corporation that produces low-fat snack products for an expanding market (pun intended). Basically, BC takes materials (corn, wheat, and potatoes) and turns them into two types of snacks: chips (regular and green onion) and party mix (one variety). BC is expanding into western United States and is considering sites for locating production facilities. BC currently has eight candidate sites. Table 1 shows the sites' purchase prices and the purchase and shipping cost per ton of each material to each site. The purchase cost represents the yearly amortized cost of opening and operating the site (exclusive of shipping costs). Each site may produce as many as 20,000 tons of products per year. BC has six major customers, and all demand is shipped by truck from the plant to the customer warehouse. The shipping cost depends on the tonnage and distance and comes to $0.15 per ton-mile. The customers, their location, and their yearly demand in tons for each product are listed in Table 2. You must meet demand. The makeup of the produces does not depend on the production plant. Table 3 gives the product ingredient mix data. The company requires that we consolidate our business, so we cannot locate plants in more than two states. For this analysis, ignore the differences in property and income tax rates between the states (this is usually critical, but is gets us far afield of the key issue of math programming). In addition, many critical factors actually determine locations; for example, the method of financing the site purchase will also be a major factor in the decision- but we will ignore that also. Your job is to determine how we should expand into the west and develop alternatives. Use the following five questions as a guide to produce an summary report for management of BestChip. Table 1 Site Information and Material shipping Cost Site Location Yuma, AZ Fresno, CA Tucson, AZ Pomona, CA Santa Fe, NM Flagstaff, AZ Las Vegas, NV St. George, UT Table 2 Demand Information. Company Jones YZCO Square Q AJ Stores Sun Quest Harm's Path Table 3 Product-Ingredient Mix Purchase Cost(S/Year) 125,000 130,000 140,000 160,000 150,000 170,000 155,000 115,000 Location. Salt Lake City 1,300 1,400 1,200 1,900 1,900 1,500 Albuquerque Phoenix San Diego Los Angeles Tucson Product Regular Chips Green Onion Chips Party Mix Corn 70 30 20 Material Shipping Cost(S/Ton) Wheat 5 8 Corn 10 12 9 11 8 10 13 14 Demand Regular Green Onion 900 1,100 800 1,200 1,400 1,000 Ingredient Wheat 20 15 50 10 7 14 12 12 15 Potato 16 11 15 14 10 11 Potato 10 55 30 Party Mix 1,700 1,700 1,800 2,200 9 8 2,300 1,400 Facilities at Tucson, Pomona, Santa Fe, and St. George are to be selected. The customer serving plan is: Jones YZCO Square Q AJ Stores Site location. Gr Gr Yuma 0 0 Fresno 0 0 0 800 0 Tucson Pomona Santa Fe Flagstaff Las Vegas St. George Re 0 0 0 0 0 0 0 1300 0 0 0 900 Re 0 0 0 0 1400 0 0 1700 0 Pa 0 0 0 0 0 0 0 Gr 0 0 0 0 1100 0 0 0 Re 0 0 1200 0 1700 0 0 0 0 Pa 0 0 0 0 0 0 0 0 0 0 0 0 Pa 0 0 1800 0 0 0 0 0 2........ 0 0 0 0 ²....... 0 2........ Re 0 0 0 1900 0 £......... Sun Quest 0 0 2...... 0 Harm's Pasta Gr 0 0 1500 13300 0 0 0 p........ 0 0 Pa 1400 In order to meet the potential demands in broader areas in the future, the company may decide not to build plants in any adjacent states. (States are adjacent if their borders touch at any point.) How are the recommendations affected? BestChip (BC) is a large nationwide corporation that produces low-fat snack products for an expanding market (pun intended). Basically, BC takes materials (corn, wheat, and potatoes) and turns them into two types of snacks: chips (regular and green onion) and party mix (one variety). BC is expanding into western United States and is considering sites for locating production facilities. BC currently has eight candidate sites. Table 1 shows the sites' purchase prices and the purchase and shipping cost per ton of each material to each site. The purchase cost represents the yearly amortized cost of opening and operating the site (exclusive of shipping costs). Each site may produce as many as 20,000 tons of products per year. BC has six major customers, and all demand is shipped by truck from the plant to the customer warehouse. The shipping cost depends on the tonnage and distance and comes to $0.15 per ton-mile. The customers, their location, and their yearly demand in tons for each product are listed in Table 2. You must meet demand. The makeup of the produces does not depend on the production plant. Table 3 gives the product ingredient mix data. The company requires that we consolidate our business, so we cannot locate plants in more than two states. For this analysis, ignore the differences in property and income tax rates between the states (this is usually critical, but is gets us far afield of the key issue of math programming). In addition, many critical factors actually determine locations; for example, the method of financing the site purchase will also be a major factor in the decision- but we will ignore that also. Your job is to determine how we should expand into the west and develop alternatives. Use the following five questions as a guide to produce an summary report for management of BestChip. Table 1 Site Information and Material shipping Cost Site Location Yuma, AZ Fresno, CA Tucson, AZ Pomona, CA Santa Fe, NM Flagstaff, AZ Las Vegas, NV St. George, UT Table 2 Demand Information. Company Jones YZCO Square Q AJ Stores Sun Quest Harm's Path Table 3 Product-Ingredient Mix Purchase Cost(S/Year) 125,000 130,000 140,000 160,000 150,000 170,000 155,000 115,000 Location. Salt Lake City 1,300 1,400 1,200 1,900 1,900 1,500 Albuquerque Phoenix San Diego Los Angeles Tucson Product Regular Chips Green Onion Chips Party Mix Corn 70 30 20 Material Shipping Cost(S/Ton) Wheat 5 8 Corn 10 12 9 11 8 10 13 14 Demand Regular Green Onion 900 1,100 800 1,200 1,400 1,000 Ingredient Wheat 20 15 50 10 7 14 12 12 15 Potato 16 11 15 14 10 11 Potato 10 55 30 Party Mix 1,700 1,700 1,800 2,200 9 8 2,300 1,400 Facilities at Tucson, Pomona, Santa Fe, and St. George are to be selected. The customer serving plan is: Jones YZCO Square Q AJ Stores Site location. Gr Gr Yuma 0 0 Fresno 0 0 0 800 0 Tucson Pomona Santa Fe Flagstaff Las Vegas St. George Re 0 0 0 0 0 0 0 1300 0 0 0 900 Re 0 0 0 0 1400 0 0 1700 0 Pa 0 0 0 0 0 0 0 Gr 0 0 0 0 1100 0 0 0 Re 0 0 1200 0 1700 0 0 0 0 Pa 0 0 0 0 0 0 0 0 0 0 0 0 Pa 0 0 1800 0 0 0 0 0 2........ 0 0 0 0 ²....... 0 2........ Re 0 0 0 1900 0 £......... Sun Quest 0 0 2...... 0 Harm's Pasta Gr 0 0 1500 13300 0 0 0 p........ 0 0 Pa 1400 In order to meet the potential demands in broader areas in the future, the company may decide not to build plants in any adjacent states. (States are adjacent if their borders touch at any point.) How are the recommendations affected?
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