Business, 03.07.2020 17:01, smariedegray
A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are three origins for this raw material, which must be shipped to three manufacturing plants. The current network has the following characteristics:
Costs Plant 1 Plant 2 Plant 3 Supply
Raw material source 1 $6 $8 $9 400
Raw material source 2 $4 $7 $3 600
Demand 500 500 500 Supply < Demand
The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Solve with the transportation method. Which site should be selected?
Answers: 2
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