Question

DryIce Inc. is a manufacturer of air conditioners that has seen its demand grow significantly. The company anticipates nationwide demand for the next year to be 180,000 units in the South, 120,000 units in the Midwest, 110,000 units in the East, and 100,000 units in the West. Managers at DryIce are designing the manufacturing network and have selected four potential sites- New York, Atlanta, Chicago, and San Diego. Plants could have the capacity of either 200,000 or 400,000 units. The annual fixed costs at the four locations are shown in the table below, along with the cost of producing and shipping an air conditioner to each of the four markets. Where should DryIce build its factories and how large should they be?

Production and transport costs for DryIce Inc.

Demand Region

Supply City	East	South	Midwest	West
New York	$211	$232	$240	$300
Atlanta	$232	$212	$230	$280
Chicago	$238	$230	$215	$270
San Diego	$299	$280	$270	$225
Demand	110,000	180,000	120,000	100,000

Plant Option

Capacity	Fixed Cost	Capacity	Fixed Cost
200,000	$6,000,000	400,000	$10,000,000
200,000	$5,500,000	400,000	$9,200,000
200,000	$5,600,000	400,000	$9,300,000
200,000	$6,100,000	400,000	$10,200,00

a. (3 pts) Clearly define decision variables

b. (3 pts) What is the total cost (define the objective function) we are trying to minimize? First, write the general formulation and then substitute the given data for the parameters.

c. (4 pts) What are the constraints? First, write the general formulation and then substitute the given data for the parameters.

Supply constraint:

Demand constraint:

Others:

Please write clearly and get a like!

Answer 1