In this tranportation problem you need to include production cost in your transportation cost. For example, the cost of transporting 1 ton in from Germany to Northe America is $1,300. Furthermore, the company needs to spend 15,000 euros in Germany to produce 1 ton of ink. This needs to be added to the transportation cost. Therefore, it increases to $1,300 + $7,530 (7,530 = 15,000 0.502, to exchange euro to $).

The production cost is not a fixed cost. It needs to be included for every ton of ink transported.

Variables and parameters needed:

x_ij = quantity transported from Plant i to City j

c_ij = transportation cost from Plant i to City j

p_i = production cost in Plant I

What is the objective function?