SUPPLY CHAIN MANAGEMENT

Assignment 1

Question 1:
The supply capacities at each origin (factory) and demand at each destination (warehouse) are
shown and the cost information is given as follows.

Cost Information:
Warehouse
Factory 1 2 3 4 Supply
1 4 7 7 1 100
2 12 3 8 8 200
3 8 10 16 5 150
Demand 80 90 120 160

Please generate the conceptual model and excel model to decide the optimal transportation
decisions.

Question 2

SC Consulting, a supply chain consulting firm, must decide on the location of its home offices. Its
clients are located primarily in the 5 states listed below. There are four potential sites for home
offices: Los Angeles, Tulsa, Denver, and Seattle. The annual fixed cost of locating an office in Los
Angeles is $165,000, Tulsa is $131,000, Denver is $140,000, and Seattle is $145,000. The
expected number of trips to each state and the travel costs from each potential site are shown
below. Each consultant is expected to take at most 40 trips each year.

If at most 3 consultants are to be assigned to a home office, where should the offices be set up?
How many consultants should be assigned to each office? What is the annual cost of this
network? Please generate the conceptual model and excel model to answer these questions.

Travel cost ($)

Los Angeles Tulsa Denver Seattle Number of trips required
Washington 150 250 200 25 40
Oregon 150 250 200 75 35
California 75 200 150 125 100
Idaho 150 200 125 125 25
Nevada 100 200 125 150 40

Tips: The limit number of consultants and the maximal number of the expected trips for each
consultant determine the capacity of the home offices in each area. When you get the number of
trips assigned to each office, then divided by 40 and you can get the required number of
consultants.