C&A has two manufacturing plants, A, and B. Each plant is capable of producing 5
ID: 429280 • Letter: C
Question
C&A has two manufacturing plants, A, and B. Each plant is capable of producing 500 lbs of candies per month. The unit production cost is $10 in plant A and $15 in plant B. C&A supplies three customers from these two plants. The monthly demand at each customer and the unit shipping cost between each plant and each customer are as follows:
Customer1
Customer2
Customer3
Plant A
20
32
28
Plant B
25
18
15
Demand
800
300
400
C&A is considering adding a plant C either in Lexington or Louisville. Both locations are capable of producing 500 lbs of candies per month. The unit production cost is $12 in Lexington and $5 in Louisville. The unit shipping cost between each location and each customer are as follows:
Customer1
Customer2
Customer3
Lexington
12
12
30
Louisville
15
10
25
What are the optimal total production and shipping costs when adding plant C in Lexington versus Louisville?
Lexington are $39,300; Louisville are $42,300
Lexington are $42,300; Louisville are $39,300
Lexington are $23,800; Louisville are $24,300
Lexington are $24,300; Louisville are $23,800
None of the above
Customer1
Customer2
Customer3
Plant A
20
32
28
Plant B
25
18
15
Demand
800
300
400
Explanation / Answer
option A is correct
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