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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?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M91767179

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