A big organization decides to construct new plants to produce products and satisfy customers demand in five regions while minimizing the relevant costs. The fixed costs, variable costs (production and transportation), the capacity of small and large factories, and regional

A big organization decides to construct new plants to produce products and satisfy customers’ demand in five regions while minimizing the relevant costs. The fixed costs, variable costs (production and transportation), the capacity of small and large factories, and regional demand are listed in the following table.

(Demand in millions of units; cost in thousands of dollars)

1. If every market is supplied by only one supplier (i.e., single-sourcing), please formulate the optimization model, solve the model Excel Solver and report optimal value of the total cost, as well as the optimal plant location and demand allocation.
 

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Inputs-Costs, Capacities, Demands Supply Region N. America S. America Europe Asia Africa Demand Demand Region Production and Transportation Cost per 1,000,000 Units N. America S. America Europe Asia Africa 81 117 102 115 142 12 92 77 105 125 100 8 101 108 95 90 103 14 130 98 119 59 105 16 115 100 111 74 71 7 Low Fixed High Fixed Cost ($) Capacity Cost ($) Capacity 6,000 10 9,000 4,500 10 6,750 10 9,750 6,500 10 6,150 10 6,000 4,100 4,000 20 20 20 20 20 22222 Inputs-Costs, Capacities, Demands Supply Region N. America S. America Europe Asia Africa Demand Demand Region Production and Transportation Cost per 1,000,000 Units N. America S. America Europe Asia Africa 81 117 102 115 142 12 92 77 105 125 100 8 101 108 95 90 103 14 130 98 119 59 105 16 115 100 111 74 71 7 Low Fixed High Fixed Cost ($) Capacity Cost ($) Capacity 6,000 10 9,000 4,500 10 6,750 10 9,750 6,500 10 6,150 10 6,000 4,100 4,000 20 20 20 20 20 22222 Inputs-Costs, Capacities, Demands Supply Region N. America S. America Europe Asia Africa Demand Demand Region Production and Transportation Cost per 1,000,000 Units N. America S. America Europe Asia Africa 81 117 102 115 142 12 92 77 105 125 100 8 101 108 95 90 103 14 130 98 119 59 105 16 115 100 111 74 71 7 Low Fixed High Fixed Cost ($) Capacity Cost ($) Capacity 6,000 10 9,000 4,500 10 6,750 10 9,750 6,500 10 6,150 10 6,000 4,100 4,000 20 20 20 20 20 22222

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