Question: Given the following information set up the problem in a transportation table and solve for the minimum-cost plan: PERIOD 1 2 3 Demand 550 700
Given the following information set up the problem in a transportation table and solve for the minimum-cost plan:
| PERIOD | ||||
| 1 | 2 | 3 | ||
| Demand | 550 | 700 | 750 | |
| Capacity | ||||
| Regular | 500 | 500 | 440 | |
| Overtime | 50 | 50 | 50 | |
| Subcontract | 120 | 120 | 100 | |
| Beginning inventory | 100 | |||
| Costs | ||||
| Regular time | $ | 60 per unit | ||
| Overtime | $ | 80 per unit | ||
| Subcontract | $ | 90 per unit | ||
| Inventory carrying cost | $ | 1 per unit per month | ||
| Back-order cost | $ | 3 per unit per month | ||
Suppose the inventory carrying cost has just increased and is now $2 per unit per period. Compute the total cost for the original transportation model with $1 inventory carrying cost, and the new total cost at $2 carrying cost. What is the additional cost for the optimal plan?
Additional Cost =
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