Network Design in the Supply Chain

Create the Network Distribution Model (with Duties) Using MS Excel Solver

Rainbow TV decided to make an annual production of 2 million units per plant, while current demand will increase by 50%. This time, the plant has to consider the variable cost per unit and % duties as shown in Tables 1 and 2.

Variable Cost ($) Table 1. Input Data Production and Shipping Cost ($/unit) N. S. Europe Asia America Australia America N. America 185 180 175 175 200 S. America 170 190 180 200 220 Europe 180 180 185 185 215 Asia 220 220 195 195 175 Current Demand 1,050,000 600,000 600,000 450,000 900,000 (units/month) Annual Fixed Cost ($) 150,000,000 155,000,000 200,000,000 140,000,000 100 100 125 80 Table 2. % Duties Item Europe Asia Australia N. America 5% S. America 7% Duties 14% 18% 20%