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Huntco plant & warehouse location model
Huntco produces tomato sauce for five different plants. The capacity for each plant is listed below
Goal: To minimize the annual cost of meeting customer demands. In addition, determine which
and warehouses to open, as well as a best shipping plan.
Plant to warehouse unit production, shipping costs, plant fixed costs, plant capacities
Warehouse
Plant 1 2 3 Fixed cost Capacity
1 $800 $1,000 $1,200 $35,000 300
2 $700 $500 $700 $45,000 200
3 $800 $600 $500 $40,000 300
4 $500 $600 $700 $42,000 200
5 $700 $600 $500 $40,000 400
Warehouse to customer unit shipping costs, warehouse fixed costs
Customer
Warehouse 1 2 3 4 Fixed cost
1 $40 $80 $90 $50 $40,000
2 $70 $40 $60 $80 $20,000
3 $80 $30 $50 $60 $60,000
Plant use decisions Warehouse use decisions
Plant Use? Warehouse Use?
1 0 1 0
2 1 2 1
3 1 3 1
4 0
5 1
Plant to warehouse shipments (tons)
Warehouse
Plant 1 2 3 Shipped out Capacity
1 0 0 0 0 <= 0
2 0 200 0 200 <= 200
3 0 0 300 300 <= 300
4 0 0 0 0 <= 0
5 0 0 400 400 <= 400
Shipped in 0 200 700
= = =
Shipped out 0 200 700
Warehouse to customer shipments (tons)
Customer
Warehouse 1 2 3 4 Shipped out Upper bound
1 0 0 0 0 0 <= 0
2 200 0 0 0 200 <= 900
3 0 300 150 250 700 <= 900
Shipped in 200 300 150 250
>= >= >= >=
Demand 200 300 150 250
Summary of costs
Text Box: Note: Unless you set the Tolerance option in Solver to 0% (or some percentage smaller than the 5% default), you probably won't get quite this good a solution.
Plant to warehouse $450,000
Warehouse to customer $45,500
Fixed plant $125,000
Fixed warehouse $80,000
Total cost $700,500