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Answers to Questions
7-1. McDonalds: The company is supplied by food distributors and restaurant product suppliers (for
plates, napkins, etc.). Production is located in retail
sites that are usually small and are near large easily
accessible customer markets. Their inventory levels
are typically small because food cannot be stored in
large quantities. Their primary mode of transportation is trucking.
Ford: Ford suppliers include raw materials and
auto parts. They receive some items on-demand for
JIT production and some is stored in warehouses.
Production is in large plants with heavy-machinery in
close proximity to good transportation sources. Ford
plants are located all over the world as are their distribution systems. Transportation is by all modes of
transportation.
7-6. In a transshipment problem the sources and destinations can also serve as intermediate shipping points
through which items can be transported.
7-7. Answer depends on the company the student selects.
7-8. Answer depends on the company the student selects.
7-9. Answer depends on the e-marketplace selected.
7-10. Answer depends on the transportation exchange
selected.
7-11. Answer depends on the ERP provider selected.
7-12. Answer depends on the international logistics
provider selected.
Answers to Problems
7-1.
TC = $82,600
7-2. No effect. The Gary Mill has 60 tons left over as surplus; reducing the capacity at Gary to 30 tons still
leaves 30 tons.
7-3.
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TC = $5,080
7-4. There is no effect; the shipping routes remain the
same
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7-5.
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7-11.
TC = $19,500
7-6.
TC = $13,200
7-7.
TC = $7,075
7-8.
TC = $3,260
7-9. No change; the total minimum cost remains $3,260
and all routes are the same.
7-10.
TM = 364 miles
7-14.
TC = $21,930
TP = $159,000
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7-15.
7-18.
TC = $1,070; this solution is optimal, but several multiple optimal solutions exist.
7-16.
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7-20. If Easy Time purchased all the baby food demanded
at each store from the distributor total profit would
be $1,246, which is less than buying it from the other
locations as determined in problem 7-19. This profit is
computed by multiplying the profit at each store by
the demand. In order to determine if some of the
demand should be met by the distributor a new
source (F) must be added to the transportation
tableau from problem 7-19. This source represents
the distributor and has an available supply of 150
cases, the total demand from all the stores. The
tableau and optimal solution is shown as follows.
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7-23.
Z = $723,500
Penalty costs = 200 $800 = $160,000
Optimal: total transport time = 1,275 hours
7-22.
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The total cost of this solution is $2,630 per week. There are
multiple optimal solutions. The solution is summarized as
follows.
1.
1.
2.
3.
4.
4.
5.
6.
Kingsport
Kingsport
Danville
Macon
Selma
Selma
Columbus
Allentown
2.
3.
B.
C.
3.
5.
A.
2.
Danville = 16 bbls
Macon = 19 bbls
Los Canos = 80 bbls
Duras = 78 bbls
Macon = 17 bbls
Columbus = 36 bbls
Whitewater = 65 bbls
Danville = 38 bbls