Question: Best Sell Ltd . has decided to launch a new product in addition to its range of products. The following information is available: 1 .
Best Sell Ltd has decided to launch a new product in addition to its range of products. The following information is available:
The new product may be distributed through any combination of the two company warehouses W and W
The available monthly production capabilities for the new products are:
units at plant A
units at plant B
units at plant C
Three major concentration points of customer demand are at locations E F and G which are estimated to have a monthly demand of:
units at E
units at F
units at G
The unit production costs amount to Sh Sh Sh at A B and C respectively.
The unit handling costs at the warehouses amount to Sh and Sh at W and W
The unit transportation costs from plant to warehouse and unit delivery cost from warehouse to customers are as shown below:
Transportation cost schedule.
Warehouses
W W
Plants
A
B
C Sh
Sh
Delivery costs schedule
Locations
E F G
Warehouses
A
B Sh
Sh
Sh
Required:
Determine the optimum production and distribution schedule to minimize total cost.
Marks
Total: Marks
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