Sycamore Plastics (SP) is a manufacturer of polyethylene plastic pellets used as a raw material by manufacturers of plastic goods around the U.S. SP currently operate four manufacturing centers in Philadelphia, PA; Atlanta, GA; St. Louis, MO; and Salt Lake City, UT. The plants have different capacities and production costs as indicated in the table below:
Maximum Capacity Production Costs
PLANT (x 100,000 lbs.) (per 1,000 lbs)
Philadelphia 7.5 $325.00
Atlanta 9.0 $275.00
St. Louis 12.0 $305.00
Salt Lake City 10.3 $250.00
SP currently has six contract customers located in New York City, Birmingham, AL; Terre Haute, IN; Dallas, TX; Spokane, WA and San Diego, CA. Transportation costs between the plants and various customers, as well as contracted demand from each customer, are shown in the table below:
Transportation Costs per 1,000 lbs_______
From/To NYC Birmingham Terre Haute Dallas Spokane San Diego
Philadelphia $45 $52 $56 $62 $78 $85
Atlanta $55 $42 $58 $59 $80 $82
St. Louis $57 $60 $50 $54 $65 $70
Salt Lake City $72 $71 $67 $57 $52 $60
Total Demand 525 415 925 600 325 400
Create a solver model and find the optimal solution to help SP develop a distribution plan that will minimize the costs to supply the customer’s demand
Comment briefly on your solution. Beyond the obvious, does your proposed solution have any other implications for SP?