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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:
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
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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- Spring '14