Question: The Lilly Snack Company is considering adding an additional plant to its three existing facilities in Wise, Virginia; Humbolt, Tennessee; and Cleveland, Georgia to serve

The Lilly Snack Company is considering adding an additional plant to its three existing facilities in Wise, Virginia; Humbolt, Tennessee; and Cleveland, Georgia to serve three large markets in the Southeast. Two locations€”Brevard, North Carolina, and Laurens, South Carolina€”are being considered. The transportation costs per pallet are shown in the table at the top of the next page.
(a) Which site would you recommend? Why?
(b) Suppose that the Brevard location has been selected. Due to the perishable nature of the goods involved, management wishes to restrict the maximum number of pallets shipped from any one plant to any single market. To accomplish this, management is willing to accept a 10% surcharge on their optimal transportation costs from part (a). What is the new transportation plan, and what is the new cost?

FROM TO Charlotte Greenville $25 Atlanta WISE HUMBOLT CLEVELAND BREVARD LAURENS DEMAND $17 $27 $25 $29 $30 $30 50 $27 $28 $31 520 250 S21 520 S22 350 300

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