Question

1. ABC pharmaceutical Company has four factories supplying four warehouses. The company’s management hires you as...

1. ABC pharmaceutical Company has four factories supplying four warehouses. The company’s management hires you as consultant to determine a minimum-cost shipping schedule for its monthly output to the warehouses. Factory supply, warehouse demands, and shipping cost per case are shown below.

Factory

Supply

Warehouse

Demand

Indianapolis

15

Columbus

10

Phoenix

6

St. Louis

12

New York

14

Denver

15

Atlanta

11

Los Angeles

9

Shipping Costs per case (In Dollars0

From

To Columbus

To St. Louis

To Denver

To Los Angeles

Indianapolis

25

35

36

60

phoenix

55

30

25

25

New York

40

50

80

90

Atlanta

30

40

66

75

a. Determine an optimal shipping schedule.
b. Determine a shipping schedule if you definitely want to ship from New York to Denver.
c. Determine a shipping schedule if you the highway from Indianapolis to Columbus is broken.
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Answer #1

a. the optimal schedule can be obtained as given below using VAM

Shipping Costs per case (In Dollars0
From To Columbus To St. Louis To Denver To Los Angeles Supply Penalty1 Penalty2 penalty3 penalty4
Indianapolis 25 35 36 (15) 60 15 10 10 -
phoenix 55 30 25 25 (6) 6 0 - -
New York 40 50 (12) 80 90(2) 14 10 10 10 40
Atlanta 30 (10) 40 66 75(1) 11 10 10 36 35
Demand 10 12 15 9 46
penalty1 5 5 11 35
penalty2 5 5 30 15
penalty3 10 10 - 15
penalty4 - 10 - 15

the optimal schedule is

From Indianapolis to Denver- 15 units

From phoenix to Los Angeles - 6 units

From New York to St. Louis- 12 units

From New York to Los Angeles- 2 units

From Atlanta to Columbus- 10 units

From Atlanta to Los Angeles- 1 unit

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