Finnish FurnitureFinnish FurnitureTRANSPORTATION ALGORITHM

Homework Solution

STRATEGICRESOURCE

ALLOCATIONand

PLANNING

MGMT E-5050

Finnish FurnitureFinnish Furniture

Finnish Furniture manufactures tables in facilities located in 3 cities - Reno, Denver, and Pittsburgh. The tables are then shipped to 3 retail stores loca- ted in Phoenix, Cleveland, and Chicago. Management wishes to develop a distribution sche- dule that will meet the demands at the lowest possi- ble cost. The shipping cost per unit from each of the sources to each of the destinations is shown in the following table:

Finnish FurnitureFinnish Furniturefrom / to Phoenix Cleveland Chicago

Reno 10 16 19

Denver 12 14 13

Pittsburgh 18 12 12

The available supplies are: 120 units from Reno 200 units from Denver 160 units from Pittsburgh

The store demands are;

140 units from Phoenix160 units from Cleveland180 units from Chicago

REQUIREMENT:

1. How many units should be shipped from each facility to each of the retail stores if cost is to be minimized?

2. What is the total cost?

Finnish FurnitureFinnish Furniture

Finnish Furniture has experienced a decrease in thedemand for tables in Chicago; demand has fallen to150 units.

REQUIREMENT:

1. What special condition would exist?

2. What is the minimum cost solution?

3. Will there be any units remaining at any of the manufacturing facilities?