ABC is going to build a new manufacturing plant to serve five market regions.
ABC is going to build a new manufacturing plant to serve five market regions.
Supply Chain Management LGMT 683
Problem Set 1
- 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.
| Supply Sources | Shipping Cost ($/Ton Mile) | Supply (Tons) | X Coordinate | Y Coordinate |
| S1 | 1.5 | 180 | 450 | 820 |
| S2 | 1 | 220 | 280 | 900 |
| S3 | 2 | 140 | 600 | 400 |
| S4 | 2 | 170 | 850 | 700 |
| Markets | Shipping Cost ($/Ton Mile) | Demand
(Tons) |
X Coordinate | Y Coordinate |
| M1 | 1 | 110 | 100 | 100 |
| M2 | 1.5 | 70 | 200 | 300 |
| M3 | 2.5 | 85 | 1000 | 100 |
| M4 | 3 | 90 | 600 | 1100 |
| M5 | 2 | 65 | 800 | 900 |
- Where should ABC locate its plant? (Hint: Use Gravity Model and Excel Solver).
- 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.)
| Supply Location |
Demand Location | Monthly Capacity (Ki) |
|||
| Production and Transportation Cost ($ per unit) |
|||||
| 1 | 2 | 3 | |||
| 1 | 2.0 | 1.0 | 1.7 | 17,000 | |
| 2 | 0.9 | 2.0 | 1.3 | 20,000 | |
| 3 | 1.8 | 2.4 | 1.6 | 29,000 | |
| Monthly Demand (Dj) |
11,000 | 8,500 | 15,000 | ||
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