A Firm Has Established a Distribution Network for the Supply

question 56

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. Set up-but do not solve-this problem as though you were going to solve it with transportation problem software.

Recognize the importance and variety of benchmarks in business performance evaluation.

Identify and differentiate between quality control and other performance measurement practices.

Understand the concept and process of dispatching in production control.

Grasp the role of quality control in maintaining standards in products and services.

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Definitions:

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