Supply Chain Management Problem Set 1 1. ABC is going to build a new manufacturing plant to serve five market regions. ABC has four supply sources. The coordinates of location, the demand of each market region, maximum units from each supply source and the shipping cost from each supply source or to each market region are shown below. Supply Sources S1 S2 S3 S4 Shipping Cost (S/Ton Mile) 1.5 1 2 2 Supply (Tons) 180 220 140 170 X Coordinate 450 280 600 850 Coordinate 820 900 400 700 Markets M1 M2 M3 M4 M5 Shipping Cost (S/Ton Mile) 1 1.5 2.5 3 2 Demand (Tons) 110 70 85 90 65 Coordinate 100 200 1000 600 800 Coordinate 100 300 100 1100 900 a) Where should ABC locate its plant? (Hint: Use Gravity Model and Excel Solver). b) Identify some of the influencing factors that affect ABC's network design decision. 2. Find the optimal allocation of demand to production facilities for the data given in the following table. (Hint: Use the model for allocating demand to existing facilities. First, formulate the problem and then use Excel Solver to find the optimal results.) Supply Location Monthly Capacity (KI) Demand Location Production and Transportation Cost (S per unit) 1 2 3 2.0 1.0 1.7 0.9 2.0 1.3 1.8 2.4 1.6 1 2 3 17,000 20,000 29,000 Monthly Demand (D) 11,000 8,500 15,000