Homework #4 - Homework 2: Spring 2008-A Warehouse Location...

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Homework 2: Spring 2008--A Warehouse Location Problem Your company has just been legally separated from a mega-firm that was in violation of the nation's antitrust laws. The task now is to find the least cost locations so that the firm can ship to the ten markets that are shown below in Row 36 in Table Three. Joe, an analyst in your IE department has identified five possible locations for the warehouses. These are shown in the first column.of Table One. that will result in the lowest shipping and warehouse costs. The fixed and variable costs associated with each warehouse location are shown in Table One. Table One Warehouse Location Fixed Cost/Yr Variable Cost/ton Max. Capacity Phila. $1,500,000 $32.00 300,000 Baltimore $1,800,000 $25.00 250,000 New Orl. $2,000,000 $28.00 200,000 Houston $2,800,000 $23.00 300,000 Oakland $1,800,000 $27.00 400,000 The freight cost to ship a ton from the warehouse to each destination is shown in Table Two. Table Two Unit Freight Costs From/To Boston N. Y. Atlanta Chic. Memp. Dallas Denver Seattle Oaklnd L A. Phila. $6.00 $5.75 $8.50 $11.00 $11.50 $14.00 $15.50 $20.00 $20.00 $20.00 Baltimore $6.50 $6.00 $8.25 $11.50 $12.50 $13.50 $16.00 $20.50 $20.50 $20.50 New Orl. $13.00 $11.75 $11.00 $11.50 $8.00 $11.00 $14.00 $16.00 $15.00 $14.50 Houston $14.00 $12.50 $11.00 $12.00 $8.00 $9.00 $12.50 $15.60 $14.50 $14.00 Oakland $20.00 $18.00 $17.00 $15.50 $16.00 $15.00 $13.00 $11.00 $5.00 $9.00 Estimates of the annual demand in each market is shown in Table Three. Table Three Annual Demand in Tons Annual Boston N. Y. Atlanta Chic. Memp. Dallas Denver Seattle Oakland L A. Demand 60,000 80,000 55,000 60,000 40,000 45,000 15,000 20,000 35,000 60,000 Solution Matrix From/To Boston N. Y. Atlanta Chic. Memp. Dallas Denver Seattle Oaklnd L A. Phila. 0 0 0 0 0 0 0 0 0 0 Baltimore 0 0 0 0 0 0 0 0 0 0 New Orl. 0 0 0 0 0 0 0 0 0 0 Houston 0 0 0 0 0 0 0 0 0 0 Oakland 0 0 0 0 0 0 0 0 0 0 Total 0 0 0 0 0 0 0 0 0 0 Feasible No No No No No No No No No No Freight Cost Incurred From/To Boston N. Y. Atlanta Chic. Memp. Dallas Denver Seattle Oakland L A. Phila.
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Homework #4 - Homework 2: Spring 2008-A Warehouse Location...

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