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The company produces a potato product at three plants, which

SCMD: Assignment 1
The company produces a potato product at three plants, which can be delivered directly to
the two customers or it can first be shipped to the two warehouses and then to the
customers. Shipments between plants are allowed. This also applies to between
warehouses and between customers.
The cost of producing the potato product is the same at each plant; as a result, the company
is only concerned with minimising the total shipping cost incurred in meeting customer
demands. The production capacity of each plant (in tons per year) and the customer
demand are summarised in the table below:

Plant Capacity
Plant 1 200
Plant 2 200
Plant 3 350

 

Customer Demand
Customer 1 500
Customer 2 220

The cost (in thousands of dollars) of shipping a ton of the product between each pair of
locations is listed in the table below where a blank indicates that the company cannot ship
on that route:

From node To node
Plant 1 Plant 2 Plant 3 Warehouse 1 Warehouse 2 Customer 1 Customer 2
Plant 1 6 4 6 6 21 21
Plant 2 10 10 2 2 9 16
Plant 3 1.4 9 2 1.5 11 13
Warehouse 1 2.2 3 13
Warehouse 2 1.8 3 13
Customer 1 2
Customer 2 8

The road regulation does not allow truck to load more than 200 tons of the product
between any two nodes. The company wants to determine a minimum-cost shipping
strategy.

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