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Suppose that MetalPR has decided to produce steel coils at three mill locations, in the following amounts: San Juan 1400, Ponce 2600, and Mayaguez 2900. The total of 6,900 tons must be shipped in various amounts to meet orders at six locations of demand: Caguas 900, Jayuya 200, Cabo Rojo 600, Humacao 400, Vieques 1700,Arecibo 1000. The following table shows the shipping costs per ton:

San Juan-Caguas -> $45; San Juan-Jayuya->$70; San Juan-Cabo Rojo->$60; San Juan-Humacao->$55; San Juan-Vieques->$85; San Juan-Arecibo->$55

Ponce-Caguas -> $45; Ponce-Jayuya->$60; Ponce-Cabo Rojo->$50; Ponce-Vieques->$95; Ponce-Arecibo->$55

Mayaguez-Caguas -> $65; Mayaguez-Jayuya->$90; Mayaguez-Cabo Rojo->$35; Mayaguez-Humacao->$65; Mayaguez-Vieques->$80;Mayaguez-Arecibo->$65

1. Explain the least expensive plan for shipping the coils from mills to demand centers.

2. Based on the output analysis, should MetalPR consider closing one of the mills?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91767179

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