Question

Bindley Corporation has a one-year contract to supply motors for all washing machines produced by Rinso...

Bindley Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd. Rinso manufactures the washers at four locations around the country: New York, Fort Worth, San Diego, and Minneapolis. Plans call for the following numbers of washing machines to be produced at each location:

New York 30,000
Fort Worth 55,000
San Diego 65,000
Minneapolis 65,000


Bindley has three plants that can produce the motors. The plants and production capacities are

Boulder 100,000
Macon 120,000
Gary 90,000


Due to varying production and transportation costs, the profit Bindley earns on each 1,000 units depends on where they were produced and where they were shipped. The following table gives the accounting department estimates of the dollar profit per unit. (Shipment will be made in lots of 1,000.)

SHIPPED TO
PRODUCED AT NEW YORK FORT WORTH SAN DIEGO MINNEAPOLIS
Boulder 10 13 15 12
Macon 22 25 22 16
Gary 14 20 28 29

Given profit maximization as a criterion, Bindley would like to determine how many motors should be produced at each plant and how many motors should be shipped from each plant to each destination.

Find the optimal solution using Microsoft Excel. (Leave no cells blank - be certain to enter "0" wherever required.)

Canidate Solution Total Shipped

Boulder

Macon

Gary

Total Supplied

Profit

Boulder

Macon

Gary

Total Profit

Homework Answers

Answer #1

Answer-

PRODUCED AT NEW YORK FORT WORTH SAN DIEGO MINNEAPOLIS TOTAL SHIPPED
Boulder 0 0 15000 0 15000
Macon 30000 30000 22000 28000 110000
Gary 0 25000 28000 37000 90000
TOTAL SUPPLIED 30000 55000 65000 65000 215000

PROFIT

PRODUCED AT NEW YORK FORT WORTH SAN DIEGO MINNEAPOLIS TOTAL SHIPPED
Boulder 0 0 225000 0 225000
Macon 660000 750000 484000 448000 2342000
Gary 0 500000 784000 1073000 2357000
TOTAL PROFIT 660000 1250000 1493000 1521000 $4924000

TOTAL PROFIT IS $4924000. Note that optimal solution exists.

Production should be as:

Boulder = 15000 units

Macon = 110000 units

Gary = 90000 units

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