Allied Manufacturing Has Three Factories Located in Dallas, Houston, and New

question 83

Essay

Allied Manufacturing has three factories located in Dallas, Houston, and New Orleans. They each produce the same 281 products and ship to three regional warehouses - #1, #2, and #3. The cost of shipping one unit of each product to each of the three destinations is given in the table below: There is no way to meet the demand for each warehouse. Therefore, the company has decided to set the following equally weighted goals: (1) each source should ship as much of its capacity as possible, (2) the number shipped to each destination should be as close to the demand as possible, (3) the capacity of New Orleans should be divided as evenly as possible between warehouses #1 and #2, and (4) the total cost should be less than $1,400. Formulate this as a goal program, which includes a strict requirement that capacities cannot be violated.

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Definitions:

Interest Rate

The cost of borrowing money or the return on savings, expressed as a percentage, influencing economic activity by affecting spending and investment decisions.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how changes in income affect spending.

Saving

The portion of income not spent on current expenditures or consumption, often put aside for future use or investment.

Disposable Income

The amount of money a household has available for spending and saving after income taxes have been accounted for.