Please read the problem carefully. You are expected to draw the distribution network, build an LP model and solve it by using the Excel solver. Insert a textbox to type your comments in Excel if necessary. There are four questions that you must answer in your managerial report. You may keep the report short, i.e., 1 page.

PROBLEM DESCRIPTION

Solutions Plus is an industrial chemicals company that produces specialized cleaning fluids and solvents for a wide variety of applications. Solutions Plus just received an invitation to submit a bit to supply the Great North American railroad with cleaning fluid for locomotives. Great North American needs the cleaning fluid at 11 locations (railway stations); it provided the following information to Solution plus regarding the number of gallons of cleaning fluid required at each location (see Table 1).

Location	Gallons Required
El Paso	16,550
San Francisco	118,010
Portland	78,923
Chicago	23,565
Los Angeles	66,740
Pittsburgh	111,475
Houston	101,762
Las Vegas	38,973
Jacksonville	65,436
Little Rock	149,462
San Diego	20,590

Solutions Plus can produce the cleaning fluid at its Cincinnati plant for $1.20 per gallon. Even though the Cincinnati location is its only plant, Solutions Plus has negotiated with the industrial chemical company located in Oakland, California, to produce and ship up to 500,000 gallons of the locomotive cleaning fluid to selected Solutions Plus customer locations. The Oakland company will charge Solutions Plus $1.65 per gallon to produce the cleaning fluid, but Solution Plus thinks that the lower shipping costs from Oakland to some customer locations may offset the added cost of producing the product.

The president of Solutions Plus, Charlie Weaver, contacted several trucking companies to negotiate shipping rates between the two production facilities (Cincinnati and Oakland) and the location where the railroad locomotives are cleaned. Table 2 shows the quotes received in terms of dollars per gallon. The -- entries in Table 2 identify shipping routes that will not be considered because of the large distances involved. These quotes for shipping rates are guaranteed for one year.

Location	Cincinnati, OH	Oakland, CA
El Paso	0.72	0.72
San Francisco	--	0.17
Portland	0.83	0.45
Chicago	0.25	--
Los Angeles	--	0.22
Pittsburgh	0.22	--
Houston	0.62	0.72
Las Vegas	--	0.25
Jacksonville	0.35	--
Little Rock	0.42	--
San Diego	--	0.25

To submit a big to the railroad company, Solutions Plus must determine the price per gallon it will charge. Solutions Plus usually sells its cleaning fluids for 15% more than its cost to produce and deliver the product. For this big contract, however, Fred Roedel, the director of marketing, suggested that maybe the company should consider a smaller profit margin. In addition, to ensure that if Solutions Plus wins the bid, it will have adequate capacity to satisfy existing orders as well as accept orders for other new business, the management team decided to limit the number of gallons of the locomotive cleaning fluid produced in the Cincinnati plant to 500,000 gallons at most.

MANAGERIAL REPORT

You are asked to make recommendations that will help Solutions Plus prepare a bid. Your report should address, but not be limited to, the following issues: 1.

2. Formulate and solve the distribution network problem and answer the following questions.