Case: Problem of distribution of Protac

PROTAC has four assembly plants in Europe. These plants are located in Leipzig (Germany),
Nancy (France), Lieja (Belgium), and Tilburg (Netherlands). The engines employed in the
plants are manufactured in the United States, shipped to ports of Amsterdam, Amberes, El
Havre, and from those ports transported to the plants for their assembling.

The company has prepared the production plans for the following trimester. The
requirements of diesel engines (the demand in the four plants) appear in the following table.
For example, Leipzig requires 400 engines, and Nancy requires 900 engines.

Plant Quantity of required engines

Leipzig 400
Nancy 900
Lieja 200
Tilburg 500
TOTAL 2000

The number of available engines in the ports, on time to be used in the following trimester,
appears in the following table. For example, Amsterdam has 500 engines. Notice that this is a
balanced model in the sense that the total supply of engines (2,000) is equal to the total
demand (2,000).

Port Quantity of available engines

Amsterdam 500
Amberes 700
El Havre 800
TOTAL 2000

PROTAC has to decide how many engines to transport from each port to each plant. The
engines will be shipped by a transportation company and the costs will be charged per engine.
For instance, to transport an engine from Amsterdam to Nancy has a cost of US$ 130, whereas
to transport an engine from El Havre to Lieja has a cost of US$ 122.

Cost of transportation ($ per engine)

Port Destination
Leipzig Nancy Lieja Tilburg
Amsterdam 120 130 41 62
Amberes 61 40 100 110
El Havre 102.5 90 122 42

The company PROTAC wants to minimize the total cost of transportation. To do so, it will
have to choose an optimal plan of distribution. In other words, it will have to determine how
many engines to transport from each port to each plant.
a. How many engines must the company ship from each port to each plant? What will be
the total cost of transportation?
b. Will the answer change if the unit cost of transporting engines from Amsterdam to
Tilburg increases from US$ 62 to US$ 100?
c. Will the answer change if the unit cost of transporting engines from El Havre to
Tilburg increases from US$ 42 to US$ 80?