Foolish Manufacturing Has Three Factories (1, 2, and 3)and Three

question 26

Essay

Foolish Manufacturing has three factories (1, 2, and 3)and three warehouses (A, B, andC).The table below shows the shipping costs between each factory (in dollars)and warehouse, the factory manufacturing capabilities (in 1000s), and the warehouse capacities (in 1000s).Write the objective function and the constraints.Let X_1A = 1000s of units shipped from factory 1 to warehouse A, etc.

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Definitions:

Optimal Order Quantity

The most cost-efficient quantity of items to order that minimizes holding costs and ordering costs in inventory management.

Holding Cost

The expense incurred from storing inventory over a period, including costs related to warehousing, depreciation, insurance, and obsolescence.

Price Breaks

Discounts applied to a product or service based on the quantity purchased.

EOQ Model

Economic Order Quantity Model, a formula used in inventory management to determine the optimal order size that minimizes the total holding costs and ordering costs.