Due to Increased Sales, a Company Is Considering Building Three

question 47

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.
-Define the decision variables for this situation.

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Definitions:

Affective Component

Part of an attitude that involves an individual’s feelings or emotions about the attitude object.

Behavioural Component

Aspects of psychology that involve observable actions and responses of individuals or organisms in their environment.

Richard LaPiere

A social psychologist known for his work in attitudes, particularly the attitudes-behavior discrepancy demonstrated through his landmark study on racial discrimination.

Attitudes

Enduring sets of beliefs or feelings about people, objects, or situations that predispose individuals to react in a particular way.