Question: KIKX Inc. has been given a new contract for a large number of electric panels. To meet this demand, it will use its existing plants
- KIKX Inc. 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:
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| Shipping Cost to Destination |
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| 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 |
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| Demand | 3,000 | 8,000 | 9,000 |
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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)
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