Problem

$2$

By including intermediary distribution centers

and

as shown in the figure and using the given network, will the company save money in its transportation costs compared to the results obtained in problem

$1$

$?$

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Note: For any two given nodes, a directed arrow represents an existing route between the two nodes.

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a

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Write the mathematical formulation of the problem. b

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Use the Excel Solver to solve the problem. Generate the answer and sensitivity reports in Excel, and submit your Excel workbook as a separate attachment. c

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Provide the solution obtained in the space provided. What is the optimal cost of transportation? Will the transportation costs be reduced after the intermediate points have been included?