A Firm Has Established a Distribution Network for the Supply

question 55

Essay

A firm has established a distribution network for the supply of a raw material critical to its manufacturing.Currently there are two origins for this raw material,which must be shipped to three manufacturing plants.The current network has the following characteristics: The firm has identified two potential sites for a third raw material source;these are identified as Candidate A and Candidate B.From A,the costs to ship would be $9 to Plant 1,$10 to Plant 2,and $12 to Plant 3.From B,these costs would be $11,$14,and $8.The new source,wherever it is located,will have a capacity of 500 units.Solve with the transportation method.Which site should be selected?

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Definitions:

Retained Earnings

The portion of net income that is held back by a company to be reinvested in its operations or to pay down debt, rather than being distributed to shareholders as dividends.

Business Managers

Individuals responsible for overseeing the operational, financial, and strategic management of a company or a specific department.

Operating Activity

Financial activities directly related to the core business operations, including cash flows from selling goods and services.

Statement of Cash Flows

This financial document summarizes the cash and cash equivalents entering and leaving a company, highlighting cash flows from operating, investing, and financing activities.