Publisher Dilemma

a – formulate the linear programming model.

b – solve the linear programming model on Excel.

c – print out the sensitivity report.

A publisher has orders for 600 copies of a certain text from San Francisco, 300 copies from San Jose, and 400 copies from Sacramento. The company has 700 copies in a warehouse in Novato and 800 copies in a warehouse in Lodi. It costs $5 to ship a text from Novato to San Francisco, costs $7 to ship it to San Jose, and costs $10 to ship it to Sacramento. It costs $15 to ship a text from Lodi to San Francisco, costs $8 to ship it from Lodi to San Jose, and costs $4 to ship it from Lodi to Sacramento.

1- How many copies should the company ship from each warehouse to San Francisco and Sacramento to fill the order at the least cost?

2 – With the Excel's optimal solution (Using the sensitivity report from your hard copy), is the publisher happy with the result? Explain why or why not.

3 – If there is a limit of 300 copies be send for each route. How would the linear programming (LP) model be changed? How is the optimal solution for the final cost compare with the solution from question 1?. (Hint, you will need to provide a constraint for each route)

4- Another potentially “real” dilemma: If on top of the limit of 300 copies be send for each route, what if there are only 600 copies of the text from both Novato and Lodi. How would the model be changed? Will there be unhappy customers (why would they be unhappy)?