A Firm Has 4 Plants That Produce Widgets The Firm Needs to Satisfy All Demand Each Day, but B

question 12

Multiple Choice

A firm has 4 plants that produce widgets. Plants A, B, and C can each produce 100 widgets per day. Plant D can produce 50 widgets per day. Each day, the widgets produced in the plants must be shipped to satisfy the demand of 3 customers. Customer 1 requires 75 units per day, customer 2 requires 100 units per day, and customer 3 requires 175 units per day. The shipping costs for each possible route are shown in the table below:
$\begin{array}{c}Shipping~ Costs&&&Customer\\per~unit~Plant&&1&2&3\\\mathrm{A} && \$ 25 & \$ 35 & \$ 15 \\\mathrm{~B} && \$ 20 & \$ 30 & \$ 40 \\\mathrm{C} && \$ 40 & \$ 35 & \$ 20 \\\mathrm{D} && \$ 15 & \$ 20 & \$ 25\end{array}$
The firm needs to satisfy all demand each day, but would like to minimize the total costs.
The objective function for the firm's problem will have how many terms?

• A) 5
• B) 7
• C) 10
• D) 12
• E) 14

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Definitions:

Support Departments

Units within an organization that provide essential services and support to the main production or operational departments but do not directly contribute to the primary business product or service.

Machining Department

A specific department within a manufacturing facility where machining processes such as cutting, drilling, or milling are performed on materials.

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific activities, enhancing the accuracy of product costing.

Overhead Pools

Aggregations of indirect costs or overheads that are then allocated to products or services based on predetermined criteria.