hr_om11_ism_ch13

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Unformatted text preview: ents some of the basic concepts of aggregate planning by the transportation method. The case involves solving a rather complex set of transportation problems. Four different configurations of operating plants have to be tested. The solutions, although requiring relatively few iterations to optimality, involve degeneracy if solved manually. The costs are: Total Total Variable Cost Fixed Cost Configuration All plants operating 1 & 2 operating, 3 closed 1 & 3 operating, 2 closed 2 & 3 operating, 1 closed $179,730  188,930  183,430  188,360 $41,000  33,500  34,000  33,000 Total Cost $220,730  222,430  217,430  221,360 The lowest weekly total cost, operating Plants 1 and 3 with 2 closed, is $217,430. This is $3,300 per week ($171,600 per year) or 1.5% less than the next most economical solution, operating all 3 Plants. Closing a plant without expanding capacity of the remaining plants means unemployment. The optimum solution, using Plants 1 and 3, indicates overtime pro...
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