Question 1

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You work for Melodic, a vintage guitar reseller that's just opening its doors in the United States. As the logistics manager, you are in charge of designing the distribution network of your Idols26 guitar series.

The guitar series is composed of a bundle of guitars that can be purchased from any four available suppliers (all of them produce the same type of guitars). Melodic packs together the guitars in this series, incorporates the marketing package (mugs, picks, and guitar bands as accessories), and then distributes them to six reseller stores. Due to the product mix requirements, all suppliers have a limited capacity of guitar bundles.

Table 1. Distance from Suppliers to Warehouses (in miles)

Suppliers/Warehouses	W 1	W 2	W 3
ZoeJames	100	163	49
Matthias	95	35	66
Remi	46	88	98
FeliP	77	96	104

Table 2. Distance from warehouses to reseller stores (in miles).

Warehouse/Reseller stores	Store 1	Store 2	Store 3	Store 4	Store 5	Store 6
W 1	85	97	85	99	39	48
W 2	108	45	79	100	27	70
W 3	78	115	35	76	60	59

Table 3.Reseller stores' demand (in units)

Reseller stores	Demand
Store 1	500
Store 2	350
Store 3	298
Store 4	630
Store 5	420
Store 6	369

Table 4. Suppliers' capacity (in units)

Suppliers	Capacity
ZoeJames	500
Matthias	600
Remi	950
FeliP	1000

Your colleague Jose Turner from finance reports and estimated transportation cost of $0.18 per unit per mile from suppliers to warehouses, and $0.06 per unit per mile from warehouses to the stores.

The general manager Ms. King, calls for a team meeting to discuss network design opportunities and limitations that you may want to evaluate before making a final decision on the guitar series distribution.

Diane, a trainee in logistics that just finished SC2x, suggests creating and optimizing the model to find the minimum transportation cost considering all existing constraints. Following this approach, what's the minimum transportation cost?

Round your answer to the nearest integer.

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Question 2

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Based on the basic optimization model you just built, select all the correct options below.

Select all correct answers

If supplier Remi leaves the market, your minimum transportation cost decreases.

If the company stops serving store 2, the minimum transportation cost will increase.

If all stores reduce their demand by 10%, the minimum transportation cost of this model will decrease.

To decide the impact of opening or closing a warehouse in the model, an option is to incorporate binary variables.

Adding a warehouse to this model could never reduce the minimum transportation cost you can achieve.

None of the above.

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Question 3

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Beverly, from operations, reports that there's a periodic fixed cost for operating the warehouses, and requests incorporating them to the optimized model. She also reports that there's the option of closing a warehouse when it's not needed.

Table 5. Warehouse Fixed Cost (in $ per period)

Warehouse	Cost
W1	4500
W2	3600
W3	6500

What's the minimum transportation cost considering this new piece of information? Do not consider any of the statements in Question 2 when building this model.

Round your answer to the nearest integer.

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Question 4

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The marketing manager Johnny suggests that, to shorten the delivery time window and provide an improved service level to the stores, warehouses should deliver to those stores that are not further than 80 miles away. To isolate the impact of this alternative on the network design, you disregard the warehouses' fixed costs constraint on this analysis and just use the Question 1 model as the baseline.

What's the minimum transportation cost considering this alternative?

Round your answer to the nearest integer.

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