Posted: March 2nd, 2017

Assignment Model – Minimizing Shipping Costs

Finnish Furniture manufactures tables in facilities located in three cities- Reno, Denver, and Pittsburgh. The tables are then shipped to three retail stores located in Phoenix, Cleveland, and Chicago. Management wishes to develop a distribution schedule that will meet the demands at the lowest possible cost. The shipping cost per unit from each of the sources to each of the destinations is shown in the following table…

From To Phoenix Cleveland Chicago
Reno 10 16 19
Denver 12 14 13
Pittsburg 18 12 12

The available supplies are 120 units from Reno, 200 from Denver, and 160 from Pittsburg. Phoenix has a demand of 140 units, Cleveland has a demand of 160 units, and Chicago has a demand of 180 units.
1) How many units should be shipped from each manufacture facility to each of the retail stores if cost is to be minimized? What is the total cost?
10-20 Finnish furniture has experienced a decrease in the demand for tables in Chicago; the demand has fallen to 150 units (see problem 10-19). What special condition would exist? What is the minimum cost solution? Will there be any units remaining at any of the manufacturing facilities?

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