ABC has been experiencing a significant decline in sales. The company anticipates demand for the next year to be 18,000 units in the East, 12,000 units in the South, 11,000 units in the Midwest, and 10,000 units in the West. ABC currently has three manufacturing plants. The current capacities, the annual fixed costs (if kept open) and the production cost per unit for each of the three plants are shown in the table below, along with the shipping costs to each of the four markets. Which plant or plants should ABC close and how should the product be distributed to each region?

((Hint: Three binary variables to decide which plants will be open, Three Integer variables to decide how much to produce in each plant and 12 integer variables to decide the shipping schedule.

Three constraints for units produced at each plant, three constraints to ensure that the total shipped out of each plant does not exceed production, and four constraints to ensure that demand is met.)

Current Plant Sites and costs:

Plant	Shipping Costs to Regions($/unit)				Cost and capacity of plants
Locations	East	South	Midwest	West	Production cost $/unit	FC $/ yr open	Annual Capacity
Raleigh	1.90	1.80	2.20	2.40	$45	950,000	40,000
Milwaukee	2.20	2.30	1.80	2.20	$48	980,000	40,000
Houston	2.00	1.70	2.20	2.50	$47	970,000	40,000

1. Which plant or plants should be closed down?

Milwaukee

2. Specify the shipping schedule:

Plant	Shipping Schedule to each Region				Total Shipped	Excess capacity
Locations	East	South	Midwest	West	Out of plant	Of each plant
Raleigh
Milwaukee
Houston
Total Shipped

Annual Fixed Cost: ___________

Annual Production Cost: _________

Annual Shipping Cost: ___________

Total Annual Cost: ____