Dana Johnson Corp. is considering adding a fourth plant to its three existing fa
ID: 351139 • Letter: D
Question
Dana Johnson Corp. is considering adding a fourth plant to its three existing facilities in Decatur, Minneapolis, and Carbondale. Both St. Louis and East St. Louis are being considered. The transportation costs per unit are shown in the table From Existing Plants To Blue Earth Ciro Des Moines Capacit Carbondale S21 $20 S22 150 Minneapolis Demand 300 250 400 $25 $22 350 $27 $25 250 From Proposed Plants Blue Earth Ciro Des Moines Capac East St. Louis $29 S30 S30 200 St. Louis S27 S28 S31 200 Using the unit production costs in the following table, show which locations yield the lowest cost. Location Production Costs () Minneapolis Carbondale East St. Louis St Louis S50 60 70 40 50 Comparing the total cost between St. Louis and East St. Louis, Dana Johnson Corp. should select with a total cost of (enter your response as a whole number).Explanation / Answer
Production Cost: East St.Louis-$40; St.Louis-$50
Transportaion costs: East St.Louis-$29,$30,$30; Total transportaion cost=$89
St.Louis-$27,$28,$31; total transportation cost = $86
Total cost: East st.Louis-$129; St.Louis-$136
Therefore, Dana Johnson Corp should select East St.Louis with total cost of $129
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