Question: ABC Company operates a 4 - stage supply chain - suppliers, plants, distribution centers and demand regions. The two manufacturing plants are located in Austin

ABC Company operates a 4-stage supply chain - suppliers, plants, distribution centers and demand regions. The two manufacturing plants are located in Austin and Charlotte, each with annual capacity of 30,000 units. The supply chain serves 5 markets as Asia -Pacific (with demand 15,000 units), Europe (10,000), North America (8,000), Middle East (4,000), South America (3,000). ABC works with 3 suppliers in China, Australia, and Kazakhstan.
ABC is considering 3 potential locations for distribution center: Houston ($1.5 million); New York ($2 million); Los Angeles ($1.8 million). The capacity will be 40,000 units.
Transportation costs are given as follows:
Houston New York Los Angeles
Austin $20 $100 $70
Charlotte $90 $30 $120
Asia-Pacific $220 $250 $200
Europe $195 $180 $210
North America $70 $75 $80
Middle East $240 $230 $235
South America $90 $115 $95
China Australia Kazakhstan
Austin $150 $175 $165
Charlotte $160 $170 $180
The objective is to minimize the total cost of investment and transportation such that all demands are met.
a) Write the mathematical optimization model for this problem. Define the appropriate notation for decision variables and present the objective function and constraints.
b) Solve your model using an optimization solver and find the optimal facility location and distribution plan.

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