The top speed Bicycle Co. manufactures and markets a line of 10-speed bicycles nationwide. The firm has
Question:
The top speed Bicycle Co. manufactures and markets a line of 10-speed bicycles nationwide. The firm has a final assembly plant in two cities, New Orleans and Omaha. If three major warehouses are located near the large market area New York, Chicago, and Los Angeles. The sale requirements for the next year at the New York warehouse are 10,000 bicycles, at the Chicago warehouse 8,000 bicycles, and at the Los Angeles 15,000 bicycles. The factory capacity at each location is limited. New Orleans can assemble and ship 20,000 bicycles, the Omaha plant can produce 15,000 bicycles per year. The cost of shipping one bicycle from each factory to each warehouse differ and these unit shipping costs are as follows
To
New York Chicago Los Angeles
New Orleans $2 $3 $5
From
Omaha $3 $1 $4
The company wishes to develop a shipping schedule that will minimize its total annual transportation cost.
Expert Answer:
