You decide to make Marseilles an intermediate transshipment point. Based on the information provided, what is the
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You decide to make Marseilles an intermediate transshipment point. Based on the information provided, what is the minimum total cost for this new network design?
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Network Design Case Study You work for a large US oil company that recently acquired a small European regional gasoline distributor. You have been tasked with proposing the best design for your company's supply chain for distributing 18,000,000 barrels of oil in the European market from your refinery in Dhahran, Saudi Arabia. Your company also has terminals near ports in Suez and Alexandria in Egypt that will be used as intermediate transshipment points between the refinery and the final destination ports for markets at Marseille in France, Naples in Italy, and Rotterdam in the Netherlands. Transportation costs between locations in the network, capacity and processing cost at each terminal, and demand in each market are given in the tables below. Note that due to trade agreements that not all markets can be served by all terminals. Shipping Cost ($/barrel) To Dhahran From Dhahran Alexandria Suez Alexandria $4.50 1. Draw this network below. Suez $3 Demand (barrels) Market Rotterdam Marseille Naples Rotterdam $8 Demand 4,000,000 10,000,000 4,000,000 Marseille Naples Terminal Processing Capacity (barrels) and Processing Cost ($/barrel) Capacity Terminal Suez 10,000,000 Alexandria 8,000,000 $7 $2 Processing Cost $2 $1.50 $6 Network Design Case Study You work for a large US oil company that recently acquired a small European regional gasoline distributor. You have been tasked with proposing the best design for your company's supply chain for distributing 18,000,000 barrels of oil in the European market from your refinery in Dhahran, Saudi Arabia. Your company also has terminals near ports in Suez and Alexandria in Egypt that will be used as intermediate transshipment points between the refinery and the final destination ports for markets at Marseille in France, Naples in Italy, and Rotterdam in the Netherlands. Transportation costs between locations in the network, capacity and processing cost at each terminal, and demand in each market are given in the tables below. Note that due to trade agreements that not all markets can be served by all terminals. Shipping Cost ($/barrel) To Dhahran From Dhahran Alexandria Suez Alexandria $4.50 1. Draw this network below. Suez $3 Demand (barrels) Market Rotterdam Marseille Naples Rotterdam $8 Demand 4,000,000 10,000,000 4,000,000 Marseille Naples Terminal Processing Capacity (barrels) and Processing Cost ($/barrel) Capacity Terminal Suez 10,000,000 Alexandria 8,000,000 $7 $2 Processing Cost $2 $1.50 $6
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