Tamara MacEwen

IE 416

Page 403 Problem 5

By: Ms. Tamara MacEwen
Parisay’s comment in red.

General Ford has two plants, two warehouses, and three customers. The locations of these are as
follows:
Plants: Detroit and Atlanta
Warehouses: Denver and New York
Customers: Los Angeles, Chicago, and Philadelphia
Cars are produced at plants, then shipped to warehouses, and finally shipped to customers.
Detroit can produce 150 cars per week, and Atlanta can produce 100 cars per week. Los Angeles
requires 80 cars per week; Chicago, 70; and Philadelphia, 60. It costs $10,000 to produce a car
at each plant, and the cost of shipping a car between two cities is given in Table 62. Determine
how to meet General Ford’s weekly demands at minimum cost.

Table 62
To ($)
From Denver New York
Detroit 1253 637
Atlanta 1398 841

To ($)
From Los Angeles Chicago Philadelphia
Denver 1059 996 1691
New York 2786 802 100

a) Write the first transportation tableau, manually, using the style in your text book.
Los
Denver New York Angeles Chicago Philadelphia Dummy Supply
1253 637 M M M 0
Detroit 150
1398 841 M M M 0
Atlanta 100
0 M 1059 996 1691 0
Denver 250
M 0 2786 802 100 0
New York 250
Demand 250 250 80 70 60 40 650

b) Solve it as a transshipment problem using WinQSB (Network modeling>> Network option).

Notice you do not need to define transshipment point as in your textbook. Refer to the example
on the Class Notes. Print input and output tables.

1
 Tamara MacEwen
IE 416

c) Write a report to a manager and explain the solution.

Report to Manager:
After reviewing the current supply chain, I would make the following recommendations:
The total shipping costs of this plan will be $338,610 per week. Total production and shipping
costs per week would be $2,838,610 per week (200 cars produced at $10,000 each plus $338,610
in shipping costs).
Shipping plan will be:
1) Ship 20 cars from Detroit to Denver
2) Ship 130 cars from Detroit to New York
3) Ship 60 cars from Atlanta to Denver
4) Ship 80 cars from Denver to Los Angeles
5) Ship 70 cars from New York to Chicago
6) Ship 60 cars from New York to Philadelphia
With this plan, the customer demand for all three cities will be met and all supply produced in
Detroit will be sent to warehouses. If Atlanta produces to its supply target of 100 cars per week,
it will have 40 cars which are not needed in the warehouse to fulfill the current customer
demand. It is better to produce only 60 cars in Atlanta or find new customers for the extra
40 cars.
The required capacity for our warehouses are: Denver 80 cars, New York 130 cars.