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.