Exhibit 5-1
Sinclair Plastics Operates Two Chemical Plants Which Produce

question 30

Essay

Exhibit 5-1
Sinclair Plastics operates two chemical plants which produce polyethylene; the Ohio Valley plant which can produce up to 10,000 tons per month and the Lakeview plant which can produce up to 7,000 tons per month. Sinclair sells its polyethylene to three different auto manufacturing plants, Grand Rapids (demand = 3000 tons per month), Blue Ridge (demand = 5000 tons per month), and Sunset (demand = 4000 tons per month). The costs of shipping between the respective plants is shown in the table below:
$$\begin{array} { | l | l | l | l | } \hline & \text { Grand Rapids } & \text { Blue Ridge } & \text { Sunset } \\\hline \text { Ohio Valley } & 50 & 40 & 100 \\\hline \text { Lakeview } & 60 & 50 & 75 \\\hline\end{array}$$
-Refer to Exhibit 5-1.Suppose the shipping capacity between any two plants was limited to 2500 tons per month.Design and implement a network flow version of this model in Solver and obtain the optimal shipping plan.How much more would the shipping plan cost Sinclair in that case

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Definitions:

Amortization

The process of gradually reducing a debt through regular payments of both principal and interest.

Risk Optimization

The process of identifying, assessing, and prioritizing risks followed by coordinating and applying resources to minimize, monitor, and control the probability or impact of unfortunate events.

Emerging Companies

are businesses in the early stages of development, usually characterized by innovative products or services and high growth potential.

Equity Capital

The funds raised by a company in exchange for shares of ownership, providing investors with a stake in the company.