Bindley Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd.
Question:
Bindley Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd. Rinso manufactures the washers at four locations around the country: New York City, Fort Worth, San Diego, and Minneapolis. Plans call for the following numbers of washing machines to be produced at each location:
| New York City | 85,000 |
| Fort Worth | 84,000 |
| San Diego | 95,000 |
| Minneapolis | 90,000 |
Bindley has three plants that can produce the motors. The plants and production capacities are
| Boulder | 105,000 |
| Macon | 145,000 |
| Gary | 132,000 |
Due to varying production and transportation costs, the profit Bindley earns on each 1,000 units depends on where they were produced and where they were shipped. The following table gives the accounting department estimates of the dollar profit per unit. (Shipment will be made in lots of 1,000.)
| SHIPPED TO | ||||
| PRODUCED AT | NEW YORK CITY | FORT WORTH | SAN DIEGO | MINNEAPOLIS |
| Boulder | 15 | 20 | 20 | 15 |
| Macon | 24 | 28 | 16 | 23 |
| Gary | 13 | 16 | 28 | 26 |
Given profit maximization as a criterion, Bindley would like to determine how many motors should be produced at each plant and how many motors should be shipped from each plant to each destination.
a.Develop a transportation grid for this problem.
Expert Answer:
To solve this problem we need to develop a transportation grid and then use it to determine the optimal production and distribution plan that maximize... View the full answer
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
