This case study aims to provide the best decision on which two locations would minimize cost and at the same time meet the demands of each outlet of Custom Campers, Inc. Each outlet is located in different states and Ricky needs to make sure that the company would be able to satisfy the consumers' demands for Shower-Rifics in each state. There are many factors that Ricky and each outlet manager should consider before they can make a decision. These factors include transportation costs, meeting each outlet's needed supply and being able to continue providing their consumers quality Shower-Rifics that is expected from them. Rockford, Madison and Detroit are the three possible choices for the two new manufacturing plants. These locations vary in distance from the existing outlets in Chicago, Milwaukee, Minneapolis and Detroit which is why there are differences in transportation costs. Constraints like minimizing transportation costs and meeting the demands of all the outlets are to be considered so that Ricky can make the best decision for the company. Availability of the materials needed, specifically fiberglass should be accessible to all manufacturing plants so they there is a better chance to produce the Shower-Rifics. For Custom Campers, Inc. to fully minimize their cost they should be able to minimize labour hours, expenses for salaries and materials that will be used and shipping costs. II. ProblemStatement
Custom Campers, Inc's main dilemma is deciding among which of the three possible locations would minimize their cost but at the same time maximize their production of Shower-Rifics. Solving this dilemma would permit them to provide each of their outlets the needed supply to meet their respective demands. III. Model Application
- To be able to come up with the best decision in selecting the two new locations for Custom Campers, Inc's new manufacturing plant - To be able to minimize all costs that the company will be incurring from the development of the new outlets - To be able to maximize the production process of each manufacturing plant and each outlet's performance - To be able to meet the demands of each outlet's customers
- To be able to provide all of the outlets needed supply
In this case Custom Vans, Inc. may be able to further reduce shipping costs by allocating production to Gary, and/or Detroit up to 100, 50 more units respectively. By shifting production to one (or all) of these facilities shipping costs can be reduced by $10, and $14 respectively. Although shifting production to Madison would reduce shipping cost by $28 per unit, the facility is at its maximum allowable amount; therefore no units of production can be shifted to Madison. Note also that shifting production to Fort Wayne will not further reduce shipping costs.
The Range of Optimality shows us how much money we are saving (reduced cost) by exhausting the routes used in the optimal solution. These routes are: Gary to Chicago; Gary to Milwaukee; Gary to Minneapolis; Fort Wayne to Chicago; Fort Wayne to Detroit; Detroit to Detroit; Madison to Minneapolis. By not shipping from: Gary to Detroit we have reduced costs by $20; Detroit to anywhere but Detroit we have reduced costs by $20; Madison to Chicago we have reduced costs by $15; Madison to Detroit we have reduced costs by $50.
The optimal solutions of the Detroit-Rockford Combination, the Detroit-Madison Combination, and the Rockford-Madison Combination were $10,800, $10,200, and $10,550, respectively. Provided that the objective was to minimize cost, the Detroit-Madison Combination proves to the best choice with the lowest cost of $10,200.
We can integrate transportation model since the company's main problem revolves around minimizing the cost of shipping Shower-Rifics from one location to another. Since there is a demand to be met, the transportation model can easily obtain the solution that would...
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