Sunchem, a manufacturer of printing inks, has five manufacturing plants worldwide. Their locations, cost of producing...

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Sunchem, a manufacturer of printing inks, has five manufacturing plants worldwide. Their locations, cost of producing 1 ton of ink at each facility and capacities are shown in the table below: North South Capacity America Europe Japan America Asia $1300 $2000 $1200 $1400 ton/year Production cost/ton $10,000 15,000 euro 1,800,000 yen $600 $1300 $1700 $1400 $1300 $900 $2100 United States 185 $600 Germany Japan 475 $2000 $1200 $1400 $300 $1400 $2100 $1300 $1000 $2100 $800 50 Brazil 200 13,000 real India Demand $2200 $2300 $800 400,000 rupees 80 270 200 120 190 100 Table 1: Capacity, Demand, Production and Transportation Cost for Sunchem US$ Euro Yen Real Rupee 43.55 US$ 1 1.9333 107.7 1.78 Euro 0.502 54.07 0.89 21.83 Yen 0.0093 0.0185 0.016 0.405 Real 0.562 1.124 60.65 24.52 Rupee 0.023 0.046 2.47 0.041 Table 2: Anticipated Exchange Rates for the Next Year The production cost are in the local currency of the country where the plant is located. The major markets for the inks are North America, South America, Europe, Japan, and the rest of Asia. Demand at each market is also given in table 1. Transportation cost from each plant to each market (with dollar sign in table 1) are given in U.S. dollars. Management must come up with a production plan for the next year. Exchange rates are expected as in table 2. a) Which plants must open, and which markets will they supply? State the number of units that will be shipped from each plant to the markets. (Objective function = $7,816,450.00) Sunchem, a manufacturer of printing inks, has five manufacturing plants worldwide. Their locations, cost of producing 1 ton of ink at each facility and capacities are shown in the table below: North South Capacity America Europe Japan America Asia $1300 $2000 $1200 $1400 ton/year Production cost/ton $10,000 15,000 euro 1,800,000 yen $600 $1300 $1700 $1400 $1300 $900 $2100 United States 185 $600 Germany Japan 475 $2000 $1200 $1400 $300 $1400 $2100 $1300 $1000 $2100 $800 50 Brazil 200 13,000 real India Demand $2200 $2300 $800 400,000 rupees 80 270 200 120 190 100 Table 1: Capacity, Demand, Production and Transportation Cost for Sunchem US$ Euro Yen Real Rupee 43.55 US$ 1 1.9333 107.7 1.78 Euro 0.502 54.07 0.89 21.83 Yen 0.0093 0.0185 0.016 0.405 Real 0.562 1.124 60.65 24.52 Rupee 0.023 0.046 2.47 0.041 Table 2: Anticipated Exchange Rates for the Next Year The production cost are in the local currency of the country where the plant is located. The major markets for the inks are North America, South America, Europe, Japan, and the rest of Asia. Demand at each market is also given in table 1. Transportation cost from each plant to each market (with dollar sign in table 1) are given in U.S. dollars. Management must come up with a production plan for the next year. Exchange rates are expected as in table 2. a) Which plants must open, and which markets will they supply? State the number of units that will be shipped from each plant to the markets. (Objective function = $7,816,450.00)

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