Use This Information to Answer the Following Questions Shipping Cost/unit ($)

question 11

Essay

Use this information to answer the following questions.
A company can ship its product from any of its three factories,F1,F2,and F3,to any of its retail outlets,R1,R2,and R3.The capacity,demand,and shipping cost information is provided as follows:
$\begin{array}{ll}\text { Demand (units) } & \text { Capacity (units) } \\\hline \text { R1:300 } & \text { F1:250 } \\\text { R2: } 500 & F 2: 350 \\\text { R3:200 } & \text { F3:400 }\end{array}$



Shipping Cost/unit ($)
$\begin{array}{lll}&&\mathrm{R} 1 & \mathrm{R} 2 & \mathrm{R} 3\end{array}$
$\begin{array}{llll}\mathrm{F} 1 & 1 & 3 & 2 \\ \text { F2 } & 3 & 4 & 2 \\ \text { F3 } & 2 & 2 & 3\end{array}$


-Refer to the information above.The company wants to come up with an optimal shipping strategy to minimize its total shipping cost.Use Excel to formulate and solve this problem.

---

Definitions:

Autonomous Consumption

The level of consumption expenditure that occurs when income levels are zero, reflecting the basic level of consumption that does not depend on current income.

APS

An acronym for Average Propensity to Save, which is the ratio of savings to the total net disposable income.

Total Saving

The sum of personal, business, and government savings within an economy.

APS

Average Propensity to Save (APS) is the ratio of total savings to total disposable income, indicating the portion of income that households save rather than spend.