A company is considering 4 locations to open warehouses: New York, Los Angeles, Chicago and Atlanta. Each warehouse can ship up to 100 units per week

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

1. (10 points) Chapter 6 Problem 28

 

2. (15 points) A company is considering 4 locations to open warehouses: New York, Los Angeles, Chicago and Atlanta. Each warehouse can ship up to 100 units per week. The weekly fixed cost of keeping each warehouse open is $400 for NY, $500 for LA, $300 for Chicago, and $150 for Atlanta. The company’s customers are spread across three well-defined regions across the country. Region 1 requires 80 units per week, region 2 requires 70 units per week and region 3 requires 40 units per week. The unit transportation costs for each warehouse to a region are shown in the following table:

 

Table of Unit Transportation Costs

 

FROM TO

Region 1 Region 2 Region 3

New York $20 $40 $50

Los Angeles 48 15 26

Chicago 26 35 18

Atlanta 24 50 35

The company wants to meet weekly demands at minimum cost, subject to the preceding information and he following strategic criteria:

• If the NY warehouse is opened, then the LA warehouse must be opened.

• At most two warehouses can be opened.

• Either the Atlanta or LA warehouse must be opened.

 

Formulate a mixed integer linear program (MILP) for this problem and solve using POM/QM (Integer and Mixed Integer Programming). Interpret your results: (a) which warehouse locations are selected? (b) What is the transportation schedule and what is the total transportation cost?

 

3. (15 points) Chapter 7 Problem 8. You may want to review the Capital Budgeting example in Chapter 7 of the textbook.

 

4. (10 points) Chapter 7 Problem 9

 

5. (20 points) Chapter 7 Problem 11. Solve part “e” using POM/QM (Integer and Mixed Integer Programming).

 

6. (15 points) Chapter 7 Problem 14

 

7. (15 points) Chapter 9 Problem 6

 

Attachments:

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