Table 108
the Neale Company Has Four Distribution Centers (A, B

question 123

Multiple Choice

Table 10.8
The Neale Company has four distribution centers (A, B, C, and D) that require monthly shipments of 30,000, 24,000, 36,000,
and 24,000 gallons of diesel fuel per month, respectively. Three wholesalers (1, 2, and 3) are willing to supply up to 36,000,
48,000 and 30,000 gallons, respectively. Total costs (in $) for both shipping and price follow. A blank transportation method
tableau is provided below.
$$\begin{array}{l}\text { Distribution Center }\\\begin{array} { | c | c | c | c | c | } \hline \text { Wholesaler } & \text { A } & \text { B } & \text { C } & \text { D } \\\hline 1 & 2.2 & 2.0 & 2.0 & 2.0 \\2 & 1.9 & 2.3 & 2.0 & 2.2 \\3 & 2.3 & 1.9 & 2.3 & 2.0 \\\hline\end{array}\end{array}$$


-Use the information in Table 10.8. What can be said about a plan that ships 18,000 gallons from 1 to C; 18,000 gallons from 1 to D; 30,000 gallons from 2 to A; 18,000 gallons from 2 to C; 24,000 gallons from 3 to B; and 30,000 from 3 to D?

• A) It is not feasible in terms of satisfying distribution center demands.
• B) It is feasible, and the total monthly cost is greater than $227,000.
• C) It is not feasible in terms of wholesaler availabilities.
• D) It is feasible, and the total monthly cost is less than $223,000.

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Definitions:

Compounded Quarterly

Refers to the process of calculating and adding interest to the principal balance four times a year.

Eight Year Note

A debt instrument with a fixed interest rate and a maturity of eight years, at which point the principal sum is repaid to investors.

Yield

Yield is the income returned on an investment, such as the interest or dividends received from holding a particular security, expressed usually as a percentage of the investment's cost.

Buyer

An individual or entity that purchases goods or services from another for a price.