A Firm Has Established a Distribution Network for the Supply

question 70

Essay

A firm has established a distribution network for the supply of a raw material critical to its manufacturing. Currently there are two origins for this raw material, which must be shipped to three manufacturing plants. The current network has the following characteristics: $$\begin{array} { | l | r | r | r | r | } \hline \text { COSTS } & \text { Plant 1 } & \text { Plant 2 } & \text { Plant 3 } & \text { Supply } \\\hline \text { Raw material source 1 } & \$ 6 & \$ 6 & \$ 9 & 400 \\\hline\text { Raw material source 2 } & \$ 4 & \$ 7 & \$ 3 & 600 \\\hline \text { Demand } & 500 & 500 & 500 & 1500 \backslash 1000 \\\hline\end{array}$$ The firm has identified two potential sites for a third raw material source; these are identified as Candidate A and Candidate B. From A, the costs to ship would be $9 to Plant 1, $10 to Plant 2, and $12 to Plant 3. From B, these costs would be $11, $14, and $8. The new source, wherever it is located, will have a capacity of 500 units. Solve with the transportation method. Which site should be selected?

---

Definitions:

Theories

Systematic sets of ideas intended to explain facts or phenomena, often forming the basis for further investigation or experiments.

Financial Institutions

Organizations such as banks, credit unions, and insurance companies that provide financial services, including deposits, loans, investments, and currency exchange.

Largest Bankruptcy

The biggest instance of a legal declaration by an entity that cannot repay its debts to creditors, historically significant due to its impact.

U.S. History

The chronological record of significant events (such as wars, economic developments, and social movements) affecting the United States.