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ABC is going to build a new manufacturing plant to serve five market regions. ABC has four supply sources. The coordinates of location, the demand of each market region, maximum units from each supply source and the shipping cost from each supply source or to each market region are shown below.
Shipping Cost (S/Ton Mile) 1.5 Supply (Tons) 180 х Supply Y Coordinate Coordinate Sources Si 450 820 S2 1 220 280 900 S3 2 14
a) Where should ABC locate its plant? (Hint: Use Gravity Model and Excel Solver).b) Identify some of the influencing factors that affect ABC’s network design decision.
Find the optimal allocation of demand to production facilities for the data given in the following table. (Hint: Use the model for allocating demand to existing facilities. First, formulate the problem and then use Excel Solver to find the optimal results.)
Demand Location Production and Transportation Cost (S per unit) Supply Location Monthly Сараcity (K) 1 2 3 17,000 2.0 1.0 1.7
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