Due to Increased Sales, a Company Is Considering Building Three

question 79

Essay

Due to increased sales, a company is considering building three new distribution centers (DCs) to serve four regional sales areas. The annual cost to operate DC 1 is $500 (in thousands of dollars). The cost to operate DC 2 is $600 (in thousands of dollars.). The cost to operate DC 3 is $525 (in thousands of dollars). Assume that the variable cost of operating at each location is the same, and therefore not a consideration in making the location decision.
The table below shows the cost ($ per item) for shipping from each DC to each region.
Region
$$\begin{array} { | c | c | c | c | c | } \hline \mathrm { DC } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } \\\hline 1 & 1 & 3 & 3 & 2 \\\hline 2 & 2 & 4 & 1 & 3 \\\hline 3 & 3 & 2 & 2 & 3 \\\hline\end{array}$$
The demand for region A is 70,000 units; for region B, 100,000 units; for region C, 50,000 units; and for region D, 80,000 units. Assume that the minimum capacity for the distribution center will be 500,000 units.
Write the objective function for this problem.

Identify the roles of different financial intermediaries and instruments in the economy.

Understand the process and implications of issuing new bonds and stock in the primary market.

Recognize the impact of regulatory changes on financial instruments and institutions.

Grasp the concept of free cash flow and its components in financial management.

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Definitions:

Durable Items

Products or goods made to withstand use over time without significant deterioration or wear.

Restocked

The process of replenishing goods or materials that have been used or sold, keeping supplies at a necessary level.

Used Indefinitely

Describes items or resources that can be utilized for an unlimited period without a predetermined end date.

Repaired

The process of fixing or mending something that was broken or damaged.