Question

PCB Chemicals PCB chemicals of Florida makes various chemical compounds. One compound is Bur Stomper insecticide. Bug stomper is used to ward off the dreaded Florida Palmetto Bugs. A palmetto bug is like a 3 inch long cock roach on steroids, that smells bad, can fly, and is extremely aggressive. They typically come out at night from behind the frig and like to fly into people's faces. PCB also makes the plastic lups bur stomper is sold in. Plastics jugs are made in one location, filled in another and then sent to a distribution center for sale to local exterminators. Plastic iurs are made in Tampa and Jacksonville. The process takes poly resin pellets from a train car melts them and injection molds a jug. The gallon jug is then tested for quality by measuring the thickness of the plastic at bend points and pressurizing the jug with air to see if it leaks. Jugs are then put in a chamber and reheated and flooded with fluorine gas to seal the plastic (else the bug stomper juice would eat through the jug). It costs $.35 to mold a jug in Tampa and $.25 to mold a jug in Jacksonville. Each plant can mold 150,000 jugs a month. The molded jugs are placed in train cars and sent to filling plants in Plant City, Tallahassee and Yehaw Junction. At the filling plants the jugs are filled with bug stomper and labeled. It costs $.9 to fill a jug in Plant City, $1.25 to fill one in Tallahassee, and $1.00 to fill one in Yehaw Junction. Each filling plant can fill 75,000 jugs a month. The filled jugs are sent to the distribution centers in Tampa (separate facility from jug molding), Orlando, Miami and Panama City. Next month's demand is as follows Gallon Jugs Tampa 50,000 Orlando 40,000 Miami 70,000 Panama City 30,000 Shipping costs for empty jugs are as follows Cost Per jug $ To From Plant City Tallahassee Yehaw Junction Tampa .05 .15 Jacksonville 2

Answer 1

Tampa Jacksonville Capacity to mould jugs 150,000 150,000 Cost to mould 0.35 0.25 Production limited to sales demand 40,000 150,000 Cost of production $14,000 $37,500 190,000 $51,500

Plant city Tallahassee Yehaw junction 75,000 Capacity to filling jugs Filling cost Limiting to sales demand Maximum filling done at low cost 75,000 0.9 75,000 75,000 1.25 40,000 75,000 190,000 67,500 93,750 75,000 $236,250

Sales Demand Tampa Orlando Miami Panama city Sales Demand 50,000 40,000 70,000 30,000 190,000 Jugs Shipping cost to fill jugs Plant city Tallahassee Yehaw junction 0.5 0.2 Tampa to Number of moulds to fill Jacksonville to Number of moulds to fill Shipping cost to fill jugs 0.15 40,000 0.22 0.2 110,000 22,000 0.06 40,000 2,400 6,000 30,400