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A company currently ships products from 4 plants to 5 warehouses. The company is considering the option of closing down one or more plants. This would increase distribution cost but perhaps lower overall cost. What plants, if any, should the company close?

Transportation Costs ($) (per 1000 products)

Warehouse 1 - Plant 1: 4400, Warehouse 1 - Plant 2: 2200, Warehouse 1 - Plant 3: 3300, Warehouse 1 - Plant 4: 4900,

Warehouse 2 - Plant 1: 2700, Warehouse 2 - Plant 2: 2800, Warehouse 2 - Plant 3: 3700, Warehouse 2 - Plant 4: 4400,

Warehouse 3 - Plant 1: 1300, Warehouse 3 - Plant 2: 1900, Warehouse 3 - Plant 3: 2800, Warehouse 3 - Plant 4: 3300,

Warehouse 4 - Plant 1: 1700, Warehouse 4 - Plant 2: 1300, Warehouse 4 - Plant 3: 2300, Warehouse 4 - Plant 4: 3100,

Warehouse 5 - Plant 1: 2400, Warehouse 5 - Plant 2: 2800, Warehouse 5 - Plant 3: 3400, Warehouse 5 - Plant 4: 3500,

Capacity of plants (per 1000)

Plant 1: 24, Plant 2: 26, Plant 3: 18, Plant 4: 22,

Fixed Cost per plant

Plant 1: $13200, Plant 2: $16500, Plant 3: $18700, Plant 4: $17600

Demand (per 1000)

Warehouse 1: 18, Warehouse 2: 12, Warehouse 3: 10, Warehouse 4: 15, Warehouse 5: 11,

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Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M92564103

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