A Company Supplies Goods to Three Customers, Each of Whom

question 49

Essay

A company supplies goods to three customers, each of whom requires 50 units. The company has two warehouses. In Warehouse 1, 75 units are available, and in Warehouse 2, 55 units are available. The costs of shipping one unit from each warehouse to each customer are shown in the table below. There is a penalty for each unsatisfied customer unit of demand - with customer 1, a penalty cost of $100 is incurred; with customer 2, $90; and with customer 3, $115.
-Suppose that the company can purchase and ship extra units to either warehouse for a total cost of $125 per unit and that all customer demand must be met. Determine how to minimize the sum of purchasing and shipping costs.

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Definitions:

Adventure Travel

A type of tourism that involves exploration or travel to remote, exotic, and possibly hazardous areas, offering a unique and potentially challenging experience.

L.L. Bean

An American, privately held retail company founded in 1912, known for its outdoor clothing and recreation products.

Primary Package

The immediate container or wrapping that holds and protects a product, directly in contact with it.

Consumer's Perspective

Refers to the outlook or perception of a product, service, or brand from the viewpoint of the consumer, which influences their purchasing behavior.