Question: Hansen Controls has been awarded a contract for a large number of control panels. To meet this demand, it will use its existing plants in

Hansen Controls has been awarded a contract for a large number of control panels. To meet this demand, it will use its existing plants in Houston and Tulsa, and consider new plants in Portland, St. Louis and Lexington. Finished control panels are to be shipped to Denver, Kansas City and Seattle. Pertinent information is given in the table.

Sources

Construction

Cost

Shipping Cost to Destination:

Capacity

Denver

1

Kansas City

2

Seattle

3

1- Houston ---- 6 8 7 14,000
2- Tulsa ---- 9 5 13 13,000
3- Portland 500,000 11 8 5 13,000
4- St. Louis 450,000 8 3 10 10,000
5- Lexington 400,000 10 6 14 8,000
Demand 11,000 10,000 15,000

We develop a transportation model as an LP that includes provisions for the fixed costs (construction costs in this case) for the three new plants. The solution of this model would reveal which plants to build and the optimal shipping schedule.

Let xij = the number of panels shipped from source i to destination j
yi = 1 if plant i is built, = 0 otherwise (i = 3, 4, 5)

Suppose that Hansen has a budget crisis and is not able to construct any additional plants. Then, using only the Houston and Tulsa facilities, which destination has ALL of its demand requirement satisfied if Hansen applies the Greedy Heuristic discussed in class?

Group of answer choices

Denver

Both Denver and Seattle.

Kansas City

Both Denver and Kansas City

None of the others.

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