Question: 2 Question 2 : ( 3 0 % ) SA Food Products Company owns several farms where it grows and harvests potatoes. It then ships

2 Question 2: (30%) SA Food Products Company owns several farms where it grows and harvests potatoes. It then ships these potatoes to three processing plants (called A, B, C) where different varieties of potato products, including chips, are produced. Recently, the company has experienced a growth in its product demand so it wants to buy one or more new farms to produce more potato products. The company is considering six new farms with the following annual fixed costs and projected harvest. Farms Fixed Annual Costs ($1,000s) Projected Annual Harvest (1,000 Tons) 140511.2 239010.5 345012.8 43689.3 552010.8 64659.6 The company currently has the following additional available production capacity (tons) at its three plants that it wants to use: Plant A: 12 thousands of tons, Plant B: 10 thousands of tons, Plant C: 14 thousands of tons. The shipping costs ($) per ton from the farms being considered for purchase to the plants are as follows: Shipping Costs, $/ton Farm A B C 1181512 2131017 3161418 4191516 5171912 6141612 The company wants to know which of the six farms it should purchase that will meet available production capacity at the minimum total cost, including annual fixed costs and shipping costs. Formulate a mathematical model and solve it using a computer, and what is the optimal solution? 3 Question 3: (30%) ABC company is a manufacturing company that has a contract to supply a customer with parts from April through September. However, ABC does not have enough storage space to store the parts during this period, so it needs to lease extra warehouse space during the six-month period. Following are ABCs space requirements. Month Required Space (ft2) April 47,000 May 35,000 June 52,000 July 27,000 August 19,000 September 15,000 The rental agent that ABC is dealing with has provided it with the following cost schedule for warehouse space. This schedule shows that the longer the space is rented the cheaper it is. For example, if ABC rents space for all six months, it costs $1.00/ft2 per month, whereas if it rents the same space for only month, it costs $1.70/ft2 per month. Rental Period (Months) $/ft2/month 61.00 51.05 41.10 31.20 21.40 11.70 ABC can rent amount of warehouse space on a month basis at any time for any number of (whole) months. ABC wants to determine the least costly rental agreement that will exactly meet its space needs each month and avoid any unused space. (a) Formulate a mathematical model for this problem, the space to rent is exactly the same as required. (b) Solve the model using a computer. (c) Suppose that ABC were to relax its restriction that it rent exactly the space it needs every month such that is would

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