Using appropriate Operational Research models solve the questions given below and present a management report to the respective situations given:

Calculations: Answer all the questions

Question 1: 15 marks

The distribution system for a Herman Company consists of three plants, two warehouses and four customers. Plant capacities and shipping costs ($) from each plant to each warehouse are given below:

Plant	Warehouse
	1	2	Capacity
1	7	4	600
2	8	5	380
3	6	7	700

Customer demand and shipping costs per unit in from each warehouse to each customer are given in the table below:

Warehouse	Customer
	1	2	3	4
1	3	4	8	7
2	5	7	6	4
Demand	500	400	300	480

As a second option, the company decides to have online orders and deliver directly to the customers. The capacities and shipping cost ($) from the plant to the customer are given below:

Plant	Customer
	1	2	3	4	Capacity
1	8	7	7	4	600
2	6	4	8	5	380
3	5	7	6	7	700
Demand	500	400	300	480	Demand

1. Draw a network for the two options of transportation and transshipment models.
2. Develop the linear program models.
3. Determine the optimal solution for shipping the orders from the plant to the customers minimize total shipping and processing costs.

Using transportation and transshipment method solve the problem and present a report to the management by recommending the model that incurs optimal shipments cost.