Inputs - Costs, Capacities, Demands

Demand Region - Production and

Fixed (fi1) Low (Ki1) Fixed (fi2) High (Ki2)
Transportation Cost per 1,000,000 Units
Supply Region N. America S. America Europe Asia Africa Cost ($) Capacity Cost ($) Capacity
N. America 81 92 101 130 115 6000 10 9000 20
S. America 117 77 108 98 100 4500 10 6750 20
Europe 102 105 95 119 111 6500 10 9750 20
Asia 115 125 90 59 74 4100 10 6150 20
Africa 142 100 103 105 71 4000 10 6000 20
Demand 12 8 14 16 7

Decision Variables
Supply Region N. America S. America Europe Asia Africa yi1 yi2
N. America 0 0 0 0 0 0 0 0
S. America 12 8 0 0 0 0 1 0
Europe 0 0 0 0 0 0 0 0
Asia 1.77636E-15 0 4 16 0 0 1 0
Africa 0 0 10 0 7 0 1 -3
Plant Production Cons
12 8 14 16 7 Market
= = = = = Demand
12 8 14 16 7 Constraints

Total Cost 23751

 Minimise the totoal cost comprising of the
facility, production and shipment cost

min Cij Xij + fi1 yi1 + fi2 yi2

yi1 = 1 if facility is opened at a lower
capacity

yi2 = 1 if te facility is opened at a higher

capacity

<= 0
<= 0
<= 0
<= 0
<= 0
Plant Production Constraints
 Demand Region - Production and Transportation Cost per 1,000,000 Units
Supply City Atlanta Boston Chicago Denver Omaha
Baltimore 1675 400 685 1630 1160
Cheyenne 1460 1940 970 100 495
Salt Lake City 1925 2400 1425 500 950
Memphis 380 1355 543 1045 665
Wichita 922 1646 700 508 311
Annual Demand 10 8 14 6 7

Decision variables
Supply City Atlanta Boston Chicago Denver Omaha
Baltimore 0 8 2 0 0
Cheyenne 0 0 0 6 7
Salt Lake City 0 0 0 0 0
Memphis 10 0 12 0 0
Wichita 0 0 0 0 0

10 8 14 6 7
= = = = =
10 8 14 6 7

Total Cost 47401

1,000,000 Units Annual Capacity Annual Fixed Cost
Portland (Thousand units) (Thousand $)
2800 18 7650
1200 24 3500
800 27 5000
2321 22 4100
1797 31 2200
11

Portland y
0 1 -8 <= 0
11 1 0 <= 0
0 0 0 <= 0
0 1 0 <= 0
0 0 0 <= 0

11
=
11
 Source / $/ton mile Tons Coordinates
Market Fn Dn xn yn dn Cost
Buffalo 0.9 500 700 1200 318.5525 159276.2
Sources Memphis 0.95 300 250 600 515.3104 154593.1
St. Louis 0.85 700 225 825 459.8494 321894.6
Atlanta 1.5 225 600 500 390.5531 87874.45
Boston 1.5 150 1050 1200 486.8914 73033.71
Markets Jacksonville 1.5 250 800 300 593.9773 148494.3
Philadelphia 1.5 175 925 975 260.8402 45647.04
New York 1.5 300 1000 1080 375.197 112559.1

Location X Location Y Total cost 1265235

681.3034425 881.996688