A cars spare part company can use 3 different distribution warehouses (A, B, and C) for supplying
Question:
A cars spare part company can use 3 different distribution warehouses (A, B, and C) for supplying its 4 main retailers (I-IV). Monthly transportation cost from each warehouse to each retailer is as follows:
To maintain the warehouses the company faces fixed costs per month:
Warehouse A: 6005
Warehouse B: 9005
Warehouse C: 7505
Considering the given information,
a) Formulate the extended) mathematical programming for such a problem to know which warehouses should be established and which customer is supplied by which warehouse in order to minimize the overall costs? It is supposed that each warehouse is able to support the demand of all the retailers.
b) Either Apply the ADD-Algorithm or the Drop-Algorithm.
Intermediate Microeconomics and Its Application
ISBN: 978-0324599107
11th edition
Authors: walter nicholson, christopher snyder