1. (15pts)TelecomOne and HighOptic are two manufacturers of telecommunication eq

Question

1. (15pts)TelecomOne and HighOptic are two manufacturers of telecommunication equipment TelecomOne has manufacturing plants located in Baltimore, Memphis, and Wichita and serves markets in Atlanta, Boston, and Chicago. HighOptic serves markets in Denver, Omaha, Sacramento, and Portland from plants located, Reno, Cheyenne and Salt Lake City. Plant capacities, market demand, variable production and transportation cost per thousand units shipped, and fixed cost per month at each plant are shown in the table below. In addition, every product sold in Atlanta, Boston and Chicago generates a revenue of S3,500 (per 1000 units). The rest of the markets also bring in a revenue of S3,300 (per 1000 units) each, irrespective of the supply city or manufacturer Inputs - Cost, Capacities, Demands (for TelecomOptics) Demand City Production and Transportation Cost per 1000 Units Fixed Cost Supply City Atlanta Boston Chicago Denver Omaha Sacramento Portland (S)Capacity Baltimore Cheyenne Salt Lake Reno Memphis Wichita Demand 685 1630 1160 495 950 615 665 311 2415 600 415 85 830 825 2800 7650 1200 3500 800 5000 5100 4100 1797 2200 18 24 27 25 1675 400 1460 1940 1925 2400 1525 2420 3801355 9221646 100 500 350 543 1045 508 6 970 1425 812 302 2321 700 31 10 14 Managements at both companies have decided to merge the two companies into a single entity to be called TelecomOptic. As part of the merger agreement, it has been decided that each market will receive supplies from one and only one supply city. However, a supply city can supply more than one market if necessary It believes that significant benefits will result if the two networks are merged appropriately. TelecomOptic will have six factories from which to serve seven markets. Management is debating whether all six factories are needed. It has assigned your supply chain team to study the network for the combined company and identify the plants that could be shut down to minimize cost. Solve. and interpret the results. 2. (1Opts) Based on your solution in problem 1, what is the total production and transportation cost?

Explanation / Answer

1 HERE IN THIS CASE THE PROBLEM CAN BE SOLVED BY USING FACTOR VALUE FACTOR VALUE = (( VARIABLE COST/ REVENUE) + FIXED COST ) BY USING THE ABOVE FORMULA FOLLOWING TABULAR VALUE IS FILLED SUPPLY CITY DEMAND CITY FACTOR PER 1000 UNITS ALT BSN CKG DNV OMH SRT PLND FIXED COST CAPACITY BMR 7650.479 7650.114 7650.196 7650.494 7652.318 7650.732 7650.848 7650 18 CYN 3500.417 3500.554 3500.277 3500.03 3501.061 3500.182 3500.364 3500 24 SLK 5000.55 5000.686 5000.407 5000.152 5001.515 5000.126 5000.242 5000 27 RN 5100.436 5100.691 5100.232 5100.106 5101.545 5100.026 5100.092 5100 25 MPH 4100.109 4100.387 4100.155 4100.317 4101.242 4100.252 4100.703 4100 22 WCT 2200.263 2200.47 2200.2 2200.154 2200.667 2200.25 2200.545 2200 31 DEM 10 8 14 6 7 11 11 147 NOW SOLVE THIS PROBLE USING NORTH WEST CORNER METHOD 67 ( WE SHOULD NOT TRY FOR SLOVE THIS PROBLEM USING OTHER METHOD ) 80 BUT HERE SUM OF CAPACITY = 147 TOTAL DEMAND = 67 SO ADD A DUMMY COLUMN OF DEMEND = 147-67 = 80 SUPPLY CITY DEMAND CITY FACTOR PER 1000 UNITS ALT BSN CKG DNV OMH SRT PLND DUMMY CAPACITY BMR 7650.479 7650.114 7650.196 7650.494 7652.318 7650.732 7650.848 0 18 CYN 3500.417 3500.554 3500.277 3500.03 3501.061 3500.182 3500.364 0 24 SLK 5000.55 5000.686 5000.407 5000.152 5001.515 5000.126 5000.242 0 27 RN 5100.436 5100.691 5100.232 5100.106 5101.545 5100.026 5100.092 0 25 MPH 4100.109 4100.387 4100.155 4100.317 4101.242 4100.252 4100.703 0 22 WCT 2200.263 2200.47 2200.2 2200.154 2200.667 2200.25 2200.545 0 31 DEM 10 8 14 6 7 11 11 80 147 ALLOCATION TABLE: SUPPLY CITY ALLOCATED VALUES ALT BSN CKG DNV OMH SRT PLND DUMMY CAPACITY BMR 10 8 18 CYN 14 6 4 24 SLK 3 11 11 2 27 RN 25 25 MPH 22 22 WCT 31 31 DEM 10 8 14 6 7 11 11 80 147 NOW WE CAN CHECK THE OPTIMALITY OF THIS SOLUTION 2 PRODUCTION COST = 10*1675+8*400+970*14+100*6+495*4*+950*3+415*11+800*11 = $52325

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.