Calculate the total transportation cost, Cost Accounting

The sunshine tomato soup shippers produce tomato soup at three west coast canneries in Bakersfield, phoenix, and Eugene. The soup is shipped to four regional warehouses. Due to high demand, the company is considering opening a fourth cannery. The company is considering opening up the fourth cannery either at san diego, san jose, los angeles, or Stockton. The following table shows the cost of shipping a case from each cannery [existing and proposed] to each regional warehouse. The company wishes to ship all of its cannery capacity to the regional warehouses so that monthly transportation cost is minimized.


Source                         seattle,             los angeles,      Denver,           Dallas,             Maxium

                                    Washington     California        Colorado         Texas               monthly

                                                                                                                                    Cannery capacity

Phoenix, Arizon             $2.80                  $0.60             $1.20               $1.50              70,000

Eugene, Oregon            $0.50                   $1.20             $2.20                $2.90              80,000

Bakersfield, California    $1.80                   $04.0              $1.80               $2.20              90,000

Los angeles, California   $1.70                  $0.75              $1.75               $2.50              110,000

San diego, California      $1.80                   $0.60             $1.60               $2.60              110,000

San jose, California       $1.40                   $0.70             $2.00               $2.40              110,000

Stockton, California       $1.60                    $0.80            $1.80               $2.50               110,000

Monthly warehouse   

       Demand                 80,000                  90,000            70,000             100,000


  •  What is the total transportation cost if each of the four sites should be selected?
  •  White site should be selected to locate the next cannery? Why?
  •  State the shipment schedule associated with the selected site.
  •  For the optimum solution determined, perform Sensitivity Analysis and interpret the results.
Posted Date: 2/25/2013 6:06:36 AM | Location : United States

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