Question: Question 3) ( 35 points) Consider a transportation problem. There are a set of suppliers and a set of customers in a region. The customers


Question 3) ( 35 points) Consider a transportation problem. There are a set of suppliers and a set of customers in a region. The customers have their known demand of a specific product. Suppliers have supply capacities for the product. An operations manager wants to make shipment decisions, l.e., how many items to ship from each supplier to each customer, subject to the demand requirements and supply capacities. The shipment costs and supply information are presented below. Toble 1 We want to determine a shipment plan to satisfy customer's demand in the month of Aprii. But, we do not have demand information for April. But we have historical demand data for the previous 11 months for each of the customers. a) Apply the following three forecasting models to predict April's demand for each customer. 1) 4-month moving average ii) Exponential Smoothing with =0.4 iii) Trend Line (regression) Tabe 3 b) Use Mean Squared Error (MSE) evaluation method to select the best forecasting model for each customer. Report MSE of each forecasting model for each customer. c) For each customer, put April's prediction of the best model in the table below: Toble 5 d) Use Excel solver to solve a transportation problem for the month of April based on cost and supply information of Table 1 and demand information of Table 5. (if you could not solve parts a,b,c, use demands of 60,70 , and 75 for customers 1,2 , and 3 respectively). You should make sure that the demand of the customers is satisfied, and supply capacity of the suppliers is not violated, Can you solve this problem? If yes, what is the minimum transportation cost for this problem? What is the capacity utiliration of supplier 3
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