MGT 351 Fall 2016 CASE STUDY 2 GENERAL GUIDELINES: Due Date: September 27 (11:55 pm MST). Refer to Canvas for submission guidelines. Case format: Individual Total Points: 12. INSTRUCTIONS YYZ Inc, a custom cymbal manufacturer, has seen its demand grow significantly recently due to its quality and big stars endorsements (e.g. Neil Peart, Steward Copeland, Tommy Igoe, etc.). The company anticipates a nationwide demand for the upcoming year of 110000 cymbals in the East region, 180000 in the South, 120000 in the Midwest, and 100000 in the West regions. The Supply Chain manager along with the top Executive team are considering building a network of manufacturing/distribution facilities in four potential sites: New York, Nashville, Chicago, and Los Angeles. These facilities could have a capacity of 75000 (small plant) or 130000 (large plant) cymbals per year. Table 1 includes annual fixed costs at each of the four locations along with the production and transportation costs for each of the markets. Supply Demand East South Midwest West Small Plant Cap Fixed Costs Large Plant Cap Fixed Costs New York Nashville Chicago Los Angeles $ 211.00 $ 232.00 $ 238.00 $ 299.00 $ 232.00 $ 212.00 $ 230.00 $ 280.00 $ 240.00 $ 230.00 $ 215.00 $ 270.00 $ 300.00 $ 280.00 $ 270.00 $ 225.00 75,000 75,000 75,000 75,000 $ 600,000.00 $ 550,000.00 $ 560,000.00 $ 610,000.00 130,000 130,000 130,000 130,000 $ 1,000,000.00 $ 920,000.00 $ 930,000.00 $ 1,025,000.00 Table 1. Production and Transportation Costs for YYZ, Inc. Case Study 2 1 MGT 351 Fall 2016 Answer the following questions: 1. Express the model algebraically indicating the decision variables, objective function, and constraints. 2. Develop the model in Excel (name the file case2_lastName, where last name is your last name). 3. Given the current conditions, where would YYZ Inc built its factories and how large should they be? 4. What is the total cost of this alternative? 5. Assume the demand in the south region raises by 10000 units. Will the change in demand affect the solution you found in (3)? Is there a change in the total cost for this option? Include supporting information to justify your answer. Case Study 2 2