Project 62 ? Dayton Electronics Manufacturing Inc The Entry Systems Are Sold Nationwide at the Same Prices

question 87

Essay

Project 6.2 ? Dayton Electronics Manufacturing Inc.DEMI)
The Dayton Electronic Manufacturing,Inc DEMI)company manufactures two styles of remote keyless entry systems the X30 and the X40)that various auto dealers supply to customers when a new or used)automobile is purchased.DEMI currently operates four production facilities located in Springfield OH,Hartford,New Orleans,and Orlando.The manufactured items are shipped from the plants to regional distribution centers located in Trenton,Chicago and Seattle.It is from these regional locations that the product is distributed nationwide.
As more automobile manufactures include keyless entry as a standard option,and DEMI finds itself locked out of the manufacturer market,demand for DEMI's products have decreased.As a result,management is contemplating closing one or more of its production facilities.Distribution facilities are not currently being considered for closing.
Each production facility carries a fixed operating cost and a variable cost associated with building each of the products.Data has been compiled on production costs,resource availability,and resource usage at each of the production plants.That information is summarized in the table below.
$\begin{array}{ccccc}\text { Plant } & \begin{array}{l}\text { Fixed Cost Per } \\\text { Month } \$ 1000 \text { ) }\end{array} & \begin{array}{c}\text { Production } \\\text { Cost per } 100 \text { ) } \\\text { X } 30-\mathrm{X} 40\end{array} & \begin{array}{c}\text { Production } \\\text { Time } \mathrm{hr} / 100 \text { ) } \\\mathrm{X} 30-\mathrm{X} 40\end{array} & \begin{array}{c}\text { Available } \\\text { Hours } \\\text { per Month }\end{array} \\\hline \text { Springfield } & 53 & 1100 \quad 1300 & 6\quad6 & 720 \\ \text { Hartford } & 38 & 1100 \quad 1250 & 7\quad8 & 780 \\\text { New Orleans } & 25 & 10001000 & 5\quad5 & 530 \\ \text { Orlando } & 28 & 1200 \quad 1500 & 5\quad9 & 680 \\\end{array}$
The entry systems are sold nationwide at the same prices: $24 for the X30 and $30 for the X40.
Current monthly demand projections at each distribution center for both products are given in the following table.
$$\begin{array}{c}\text { Demand }\\\begin{array} { c c c c } & \text { Trenton } & \text { Chicago } & \text { Seattle } \\\hline X 30 & 2200 & 3100 & 4000 \\X 40 & 4500 & 5800 & 6000\end{array}\end{array}$$
The transportation costs between each plant and each distribution center,which are the same for either product,are shown in the following table:
$\text {Cost per 100}$ $\quad$$\quad$$\text {To}$

$\begin{array}{lccc}\text { From } & \text { Trenton } & \text { Chicago } & \text { Seattle } \\\hline \text { Springfield } & \$ 200 & \$ 270 & \$ 450 \\\text { Hartford } & \$ 100 & \$ 200 & \$ 700 \\\text { New Orleans } & \$ 250 & \$ 240 & \$ 300 \\\text { Orlando } & \$ 180 & \$ 220 & \$ 350\end{array}$
• Determine which of the plants to close and which to keep open.
• Determine the number of X30 and X40 to be produced at each plant.
• Determine a shipping pattern from the plants to the distribution centers.
• Maximize the net total monthly profit.If any plants were closed,what was the impact of the closing on profits?
• Do not exceed the production capacities at any plant.
Formulate DEMI's problem as a fixed charge,integer program.Implement your model in Excel and solve the model to answer DEMI's questions.

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