Question: In determining the regional facility configuration, linear programming (LP) is usually applied to find the optimal solution. Under the following scenario, please provide the steps
In determining the regional facility configuration, linear programming (LP) is usually applied to find the optimal solution. Under the following scenario, please provide the steps and set equations for ordering the LP to find the optimal answer (no need to actually calculate the figures).
Assumption:
- Single product
- Two market areas, c1 and c2 with annual demands of 50,000 and 100,000 units respectively.
- Two plants, p1 and p2 with annual output capacity of 150,000 and 60,000 units respectively. The two plants have the same unit production costs.
- Two warehouses w1 and w2 with identical warehouse handling costs.
The unit distribution costs between p, w, and c are shown below (figures in HK Dollar)
|
| P1 | P2 |
| C1 | C2 |
|
| W1 | $0 | $4 |
| $3 | $4 |
|
| W2 | $5 | $2 |
| $2 | $1 |
|
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