Matt OGrady, vice president of supply chain at MobileOne thought that his current production and distribution network
Question:
Matt O’Grady, vice president of supply chain at MobileOne thought that his current production and distribution network was not appropriate given the significant increase in transportation costs over the past few years. A quick decision on building one or more new plants could save the company significant amounts in transportation expense in the future.
MobileOne was founded in the late 1980s and produced two types of products: Product1 and Product2. Demand for the two products is shown in Table 1. The company currently had one factory in zone A that produced both products for all three zones (zones A, B and C). The current transportation costs per unit (for both Product1 and Product2) are shown in Table 2.
The vice president had identified City1, City2 and City3 as potential sites for a new plant. Each new plant could have production line for Product1, Product2, or both. For Product1, a new plant has a capacity of 8 million units, an annual fixed cost of $2.2 million, and a variable production cost of $10 per unit. For Product2, a new plant has a capacity of 2 million units, an annual fixed cost of $1.8 million, and a variable cost of $20 per unit. The vice president would like to close down the current plant in zoneA and has to decide to build new plants and the number of new plants can not be more than 2.
Develop the capacitated facility model for the case study (submit your answer as an attached file on google class)( Define indices, parameters, decision variables, objective function, and constraints) (40 points)
Expert Answer:
a Excel model Solver inputs Solution From To If open1 NW SW UM LM NE SE Total Capacity ... View the full answer
