The vice president is considering options to optimize SunOil's production network to meet demand. The model inputs include production and transportation costs from each supply region to each demand region, as well as plant capacities and costs. The decision variables are the allocation of production to each demand region from each supply plant and whether low or high capacity plants are open in each supply region. The objective is to minimize total cost. Based on the solver results, the optimal solution is to open low capacity plants in South America and Asia, meeting all demand at lowest cost.
The vice president is considering options to optimize SunOil's production network to meet demand. The model inputs include production and transportation costs from each supply region to each demand region, as well as plant capacities and costs. The decision variables are the allocation of production to each demand region from each supply plant and whether low or high capacity plants are open in each supply region. The objective is to minimize total cost. Based on the solver results, the optimal solution is to open low capacity plants in South America and Asia, meeting all demand at lowest cost.
The vice president is considering options to optimize SunOil's production network to meet demand. The model inputs include production and transportation costs from each supply region to each demand region, as well as plant capacities and costs. The decision variables are the allocation of production to each demand region from each supply plant and whether low or high capacity plants are open in each supply region. The objective is to minimize total cost. Based on the solver results, the optimal solution is to open low capacity plants in South America and Asia, meeting all demand at lowest cost.
The vice president is considering options to optimize SunOil's production network to meet demand. The model inputs include production and transportation costs from each supply region to each demand region, as well as plant capacities and costs. The decision variables are the allocation of production to each demand region from each supply plant and whether low or high capacity plants are open in each supply region. The objective is to minimize total cost. Based on the solver results, the optimal solution is to open low capacity plants in South America and Asia, meeting all demand at lowest cost.
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Network Optimization Models
The vice president of SC SunOil considering several options to meet demand (set up a facility in each region or consolidate plants in just few regions). SunOil is considering 2 plant sizes in each location. Low capacity plants can produce 10 million units a year, whereas high-capacity plants can produce 20 million units a year. VP want to know what the lowest cost network should look like
Inputs - Costs, Capacities, Demands
Demand Region Fixed Cost Low Fixed Cost High Supply Region Production and Transportation Cost per 1,000,000 Units ($) Capacity ($) Capacity N. America S. America Europe Asia Africa N. America 81 92 101 130 115 6,000 10 9,000 20 S. America 117 77 108 98 100 4,500 10 6,750 20 Europe 102 105 95 119 111 6,500 10 9,750 20 Asia 115 125 90 59 74 4,100 10 6,150 20 Africa 142 100 103 105 71 4,000 10 6,000 20 Demand 12 8 14 16 7
Decision Variables Demand Region - Production Allocation (Million Units) Plants L Plants H Supply Region N. America S. America Europe Asia Africa (1=open) (1=open) N. America 1.3322676E-15 0 0 0 0 0 0 = There's a formula S. America 12 8 0 0 0 0 1 = Known/given Europe 0 0 0 0 0 0 0 = Solver Asia 0 0 4 16 0 0 1 = Formula & Solver Africa 0 0 10 0 7 0 1
Constraints Supply Region Excess capacity N. America -1.332268E-15 S. America 0 Europe 0 Asia 0 Africa 3 N. America S. America Europe Asia Africa Unmeet Demand 0 0 0 0 0
Objective Functions Cost= $ 23,751.00 The Capacitated Plant Location Model
Management executives at both TelecomOne and HighOptic have decided to merge the two companies into a sing assigned SC team to study the network for the combined company and identify the plants that could be shut down
Demand City Fixed Cost Supply City Production and Transportation Cost per 1000 Units ($) Atlanta Boston Chicago Denver Omaha Portland Baltimore 1,675 400 685 1,630 1,160 2,800 7,650 Cheyenne 1,460 1,940 970 100 495 1,200 3,500 Salt Lake 1,925 2,400 1,425 500 950 800 5,000 Memphis 380 1,355 543 1,045 665 2,321 4,100 Wichita 922 1,646 700 508 311 1,797 2,200 Demand 10 8 14 6 7 11
Decision Variables Demand City - Production Allocation (1000 Units) Plants Supply City Atlanta Boston Chicago Denver Omaha Portland (1=open) Baltimore 0 8 2 0 0 0 1 Cheyenne 0 0 0 6 7 11 1 Salt Lake 0 0 0 0 0 1.776E-15 0 Memphis 10 0 12 0 0 0 1 Wichita 0 0 0 0 8.882E-16 0 0
Constrraints Supply City Excess Capcity Baltimore 8 Cheyenne 0 Salt Lake -1.776357E-15 Memphis 0 Wichita -8.881784E-16 Atlanta Boston Chicago Denver Omaha Portland Unmeet Demand 0 0 0 0 0 0
Objective Function Cost = $ 47,401.00
Based on Solver, it's optimal for TelecomOptic to close the plants in Salt Lake & Wichita, while keeping Baltimore, C The total monthly cost of this network and operation is $47,401,000 o companies into a single entity called TelecomOptic. Management is debating whether all five factories are needed. It has that could be shut down.
Capacity
18 24 27 22 31
= There's a formula = Known/given = Solver = Formula & Solver
hile keeping Baltimore, Cheyenne, and Memphis open
