A company supplies goods to three customers, who each require 30 units. The company has two warehouses. Warehouse 1 has 40 units available, and warehouse 2 has 30 units available. The costs of shipping 1 unit from warehouse to customer are shown in Table 7. There is a penalty for each unmet customer unit of demand: With customer 1, a penalty cost of $90 is incurred; with customer 2, $80; and with customer 3, $110. Formulate a balanced transportation problem to minimize the sum of shortage and shipping costs.
A company supplies goods to three customers, who each require 30 units. The company has two warehouses. Warehouse 1 has 40 units available, and warehouse 2 has 30 units available. The costs of shipping 1 unit from warehouse to customer are shown in Table 7. There is a penalty for each unmet customer unit of demand: With customer 1, a penalty cost of $90 is incurred; with customer 2, $80; and with customer 3, $110. Formulate a balanced transportation problem to minimize the sum of shortage and shipping costs.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
A company supplies goods to three customers, who each
require 30 units. The company has two warehouses.
Warehouse 1 has 40 units available, and warehouse 2 has 30
units available. The costs of shipping 1 unit from warehouse
to customer are shown in Table 7. There is a penalty for each
unmet customer unit of demand: With customer 1, a penalty
cost of $90 is incurred; with customer 2, $80; and with
customer 3, $110. Formulate a balanced transportation
problem to minimize the sum of shortage and shipping costs.
Transcribed Image Text:TABLE 7
To
From
Customer 1
Customer 2
Customer 3
Warehouse 1
$15
$35
$25
Warehouse 2
$10
$50
$40
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