Now consider a modified version of example 2 network design.

assume:

1. There are two plants, three warehouses, and four market areas.
2. The capacity of plant 2 is 100,000 while the capacity of plant 1 is unlimited.
3. The demands of the four market areas are 60,000, 80,000, 150,000, and 60,000 respectively.
4. The capacity of each warehouse is 200,000 if opened.
5. The fixed warehouse costs for the three potential warehouses are 500,000, 600,000, and 450,000, respectively.
6. You are allowed to open two warehouses only.
7. The distribution cost ($) per unit is shown in the following table.

Warehouse	P1	P2	C1	C2	C3	C4
W1	4	2	1	3	4	3
W2	0	5	3	2	1	4
W3	5	0	2	7	3	5

Unit Cost
Warehouse	P1	P2		Warehouse	C1	C2	C3
W1	0	4		W1	3	4	5
W2	5	2		W2	2	1	2
W3	0	2		W3	3	6	6
W4	6	0		W4	2	7	5

Flow
Warehouse	P1	P2		Warehouse	C1	C2	C3		Open or not	Cost	Capacity
W1				W1
W2				W2
W3				W3
W4				W4
									SUM
Capacity	1,000	60			50	100	50

Total Cost
Warehouse	P1	P2		Warehouse	C1	C2	C3
W1				W1
W2				W2
W3			SUM	W3				SUM
W4				W4
		SUM

C K A B D E F G H H Unit Cost Warehouse P1 P2 Warehouse C1 C2 C3 N 3 W1 0 4 W1 4 N2 2 W2 N U W3 0 W3 W 6 0 W4 7 N4 6 2 Flow Open or not Cost Capacity 8 Warehouse P1 P2 Warehouse C1 C2 C3 9 N1 W1 10 W2 W2 11 W3 W3 12 W4 W4 SUM 13 Capacity 1,000 60 100 50 14 50 15 Total Cost 16 Warehouse P1 P2 Warehouse C1 C2 C3 17 W1 W1 W2 W2 19 W3 SUM W3 SUM 20 W4 W4 21 SUM 22 23 24 25 26 27