CASE STUDY

FAST-GRO FERTILIZERS
[Source : Lawrence Lapin Cases in Management Science Pub: Thomson Pub]
Fast-Gro Fertilizer Company currently operates in California with two plants, located in Red Bluff
(annual capacity 1,500,000 tons) and Bakersfield (1,000,000 tons). Fast-Gro has two
warehouses, each with a capacity of 500,000 tons situated in Sacramento and Visalia. Each facility lies
near the centre of gravity of a local sales territory. The California market is divided into five more
territories, each containing hundreds of individual customers.
Fast-Gro serves the warehouse function for the territory in which they are situated. Any warehouse
may deliver to customers in neighbouring territories, within geographical constraints. The following table
gives the territory demand and applicable distances.
Mileage data and allowed routes for Fast-Gro Fertilizers
Territory Code
Territory
Code
1
2
3
4
5
6
7
8
9

Territory Name
Bakersfield
(Plant)
Imperial
Napa/North Coast
Red Bluff
(Plant)
Sacramento
(Warehouse)
Salinas
San Bernardino
Turlock
Visalia
(Warehouse)

Demand
(000s'
tons)

35
-----

240
10
---

240
--20

-------

210
-----

150
--50

140
--100

150
-----

50
--100

250
50
300

---

---

120

30

110

---

240

200

280

200

---------

---------

50
100
--100

---------

25
-------

140
15
--80

----15
---

70
80
--25

--160
-----

400
400
200
150

---

---

---

---

---

160

--95
20
Total Demand >>>

-- Indicates non-existing route

The numbers along the main diagonal indicates the average distances from the central point to
customers within territories. You may note that --- indicates that the particular route should not be
considered. Since the distances are due to different modes, the above matrix is not symmetric with
respect to the main diagonal.
The supply is only from the 2 plants at Red Bluff (annual capacity 1,500,000 tons) and Bakersfield
(1,000,000 tons) and there are two warehouses at Sacramento and Visalia. Although, the data above
provides distances from some of the market points to others or to warehouses, such movements may not
be allowed. Thus, movement of the fertilizer is from a plant to any market directly or through the two
warehouses.

300
2,250,000