Network Models

The CoolAire Company manufacturers air conditioners that are sold to four different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most cost effective manner possible. The company produces air conditioners at five plants across the country and stocks these units at four warehouses before finally shipping to the retail locations. The cost of manufacturing and shipping a unit between plants and warehouses, cost of shipping between warehouses and retail locations, plant capacities, and retail location demands are shown below:

Plant/Warehouse Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Plant Capacity
Plant 1 $700 $1,000 $900 $1,200 300
Plant 2 $800 $500 $600 $700 200
Plant 3 $850 $600 $700 $500 300
Plant 4 $600 $800 $500 $600 250
Plant 5 $500 $600 $400 $700 350

Warehouse/Retail Retail 1 Retail 2 Retail 3 Retail 4
Warehouse 1 $40 $80 $60 $90
Warehouse 2 $60 $50 $75 $40
Warehouse 3 $55 $40 $65 $60
Warehouse 4 $80 $30 $80 $50
Demand 200 300 200 150

CoolAir would like to determine the optimal shipment plan across their supply chain network by minimizing cost.

1. Draw a network diagram showing the supply chain network for CoolAir.
2. Clearly define and list the decision variables and express objective function and all constraints in mathematical form.
3. Develop a decision model in EXCEL and identify the optimal shipment plan (Include all EXCEL reports)
4. If there is a fixed cost of producing air conditioners at each of the plants as shown below:

Plant 1- $100,000
Plant 2- $150,000
Plant 3- $200,000
Plant 4- $95,000
Plant 5- $125,000

Revise the problem formulation to address the plant selection decisions in addition to optimal shipment decisions. Clearly define and list the decision variables and express objective function and all constraints in mathematical form. Solve the problem in EXCEL and discuss the solution

Sample Solution

Desires and impression of customers assume a huge job in assessing administration quality. I was interning with an IT specialist organization firm and was liable for the showcasing of their administrations just as producing leads. It is along these lines significant for us to satisfactorily comprehend the total necessities so pertinent changes can be executed to support so as to fulfill customer needs.

One of my significant job there was to feature the administrations gave by the firm and furthermore think of various computerized promoting technique and spread the attention to the customers by means of certain advanced crusades and cold reasons for living.

The purchasing conduct of the current customers was purchasing the administrations that were given by the organization at the underlying stage. All the business was getting through the individual contacts of the CEO. However, that was insufficient to create benefits as the activities were not long haul.

While the organization is in a developing stage, they were going into the most recent innovations and were fit for offering the types of assistance for the equivalent. However, because of the absence of mindfulness inside the current customers just as the absence of data to the prospecting customers, they couldn’t create any benefits. So the CEO chose to set up another deals and promoting group including the advanced showcasing specialists and substance journalists. Mr. Gupta has joined the organization as a team lead in 2017. He had finished an official administration program in deals and promoting from a top administration organization in India. He had nine years of corporate deals understanding and was viewed as an entertainer in the business.

After the consistent meetings to generate new ideas and various gatherings, the deals and promoting groups thought of the choice that the prospecting customers are as yet not mindful of the administrations and capacities of the organization yet so they have to compose a web based life battles through different stages.

Mr. Gupta set up a gathering with the partners and CEO of the organization to examine the issue looked by the promoting and deals group of absence of appropriate apparatuses and strategies to oversee and lead the computerized advertising efforts. For this, they require monetary help from the organization to purchase these valuable to

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