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Production and Transportation Cost Per 1 Million Units: Decision Variables

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Ragil R Sentosa
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14 views3 pages

Production and Transportation Cost Per 1 Million Units: Decision Variables

Uploaded by

Ragil R Sentosa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Inputs - Costs, Capacities, Demands

Production and(SunOil Company)Cost per 1


Transportation
million Units Fixed Low
Supply RegN. AmericaS. AmericaEurope Asia Africa Cost Capacity
N. America $ 81.00 $ 92.00 $ 101.00 $ 130.00 $ 115.00 $ 6,000 10
S. America $ 117.00 $ 77.00 $ 108.00 $ 98.00 $ 100.00 $ 4,500 10
Europe $ 102.00 $ 105.00 $ 95.00 $ 119.00 $ 111.00 $ 6,500 10
Asia $ 115.00 $ 125.00 $ 90.00 $ 59.00 $ 74.00 $ 4,100 10
Africa $ 142.00 $ 100.00 $ 103.00 $ 105.00 $ 71.00 $ 4,000 10
Demand 12 8 14 16 7

Decision Variables
Demand Regio - Production Allocation (Million Units) Plants Plants
Supply RegN. AmericaS. AmericaEurope Asia Africa (1=open) (1=open)
N. America 0 0 0 0 0 0 0
S. America 12 8 0 0 0 0 1
Europe 0 0 0 0 0 0 0
Asia 0 0 4 16 0 0 1
Africa 0 0 10 0 7 0 1

Constraints
Supply RegExcess Capacity
Excess Capacity
N. America 0
S. America 0 =G14*H4+H14*J4-SUM(B14:F14)
Europe 0
Asia 0
Africa 3
N. AmericaS. AmericaEurope Asia Africa
Unmet Demand
Unmet De 0 0 0 0 0
=B9-SUM(B14:B18)
Objective Function
Objective Function
Cost ###
=SUMPRODUCT(B14:F18;B4:F8)+SUMPRODUCT(G14:G18;G4:G8)+SUMPRODUCT(H14
Fixed High
Capacitated Plant Location Model
Cost Capacity
$ 9,000.00 20 n = Number of Potential Plant location / capacity (each level
$ 6,750.00 20 will count as a seperate location); n = 10 ( 5 x 2)
$ 9,750.00 20
$ 6,150.00 20 m = number of markets or demand points; m = 5 markets
Dj = annual demand from market j; Dj = B9:F9
$ 6,000.00 20
Ki = potential capacity of plant i; Ki = H4:H8 & J4:J8
fi = annualized fixed cost of keeping plant i open; fi = G4:G8 & I
cij = cost of producing and shipping one unit from plant i to marke
includes production, inventory, transportation, and tariffs); cij = B

Learning Objectives

The Capacitated plant location model can be used to obtain a


configuration that minimizes total cost or maximizes total pr
model provides optimal plant locations while ensuring that n
supplies more than its capacity and each market obtains eno
to meet demand

G4:G8)+SUMPRODUCT(H14:H18;I4:I8)
capacity (each level of capacity
0 ( 5 x 2)

ts; m = 5 markets
:F9
8 & J4:J8
i open; fi = G4:G8 & I4:I8
t from plant i to market j (cost
on, and tariffs); cij = B4:F8

n be used to obtain a regional


r maximizes total profits. The
while ensuring that no plant
market obtains enough supply

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