1. GE. has been given a new contract for a large number of electric panels. To meet this demand, it will use its existing plants in Chicago and Houston, and consider new plants in Tuscaloosa, St. Louis, and Portland. Finished control panels are to be shipped to Seattle, Denver, and Kansas City. All related information is given in the table below:

		Shipping Cost to Destination
Sources	Construction Cost	Seattle	Denver	Kansas City	Capacity
Chicago	----	5	7	8	2,500
Houston	----	10	8	6	2,500
Tuscaloosa	350,000	9	4	3	10,000
St. Louis	200,000	12	6	2	10,000
Portland	480,000	4	10	11	10,000
	Demand	3,000	8,000	9,000

Develop a model whose solution would reveal which plants to build and the optimal shipping schedule. (Hints: all demand must be met, we have two cost components, shipping cost and the fixed construction costs if a new plant is chosen)

Then answer these questions:

1. What is your total cost?
2. Which plants will be chosen?
3. What is the excess capacity in each operating plant?

If the capacity of the proposed 3 plants (in Tuscaloosa, St.Louis and Portland) is to be reduced to 7000, how your answer will change?

Construction Cost Sources Chicago Houston Shipping Cost to Destination Seattle Denver Kansas City $5.00 $7.00 $8.00 $10.00 $8.00 $6.00 Capacity 2500 2500 Tuscaloosa $ 340,000.00 $9.00 $4.00 $3.00 7,000 $ St. Louis Portland 220,000.00 410,000.00 Demand $ $12.00 $4.00 3,000 $6.00 $10.00 8,000 $2.00 $11.00 9,000 7,000 7,000 Seattle Denver Kansas City Open/Don't Open 1 Open = 1 Don't open = 0 Chicago Houston 1 Tuscaloosa St. Louis Portland Demand met Excess capacity Chicago Houston Tuscaloosa St. Louis Portland Total cost