Pharma Inc. manufactures a pharmaceutical raw material at three factories in Puerto Rico: Dorado, Aguadilla, and Barceloneta. The Dorado factory can produce a maximum of 150,000 lbs./month. Aguadilla and Barceloneta can produce, each, as much as 100,000 lbs. per month. The raw material is shipped by ships to customers in LA, Boston, New Jersey, and Chicago. The customers in each city require a minimum of 75,000 lbs. per month. The table below shows the costs of shipping a pound of raw material to each destination. Pharma wants to minimize the total cost of shipping the required products to customers.

To → From↓	L.A.	Boston	New Jersey	Chicago
Dorado	$25	$28	$31	$30
Aguadilla	$21	$28	$33	$29
Barceloneta	$26	$23	$33	$32

1. Show the standard-form-model1 of this situation (Objective function and constraints).

2. Find the optimal solution to help Pharma develop a distribution plan that will minimize costs to supply the customers' demand.

3. Comment briefly on your solution. Beyond the obvious, does your proposed solution have any other implications for Pharma?

4. If a new policy requires Pharma to manufacture at least 40% of total production per month in Dorado, what would be the optimal distribution plan?

Answer rating: 100% (QA)

The transportation matrix for the given problem is represented as follows Factory Lo... View the full answer