Transportation

Module C
Introduction
Custom Vans, Inc., specializes in converting standard vans into campers.
Depending on the amount of work and customizing to be done, the customizing
can cost less than $1,000 to more than $5,000. In less than 4 years, Tony Rizzo was
able to expand his small operation in Gary, Indiana, to other major outlets in
Chicago, Milwaukee, Minneapolis, and Detroit. Innovation was the major factor
in Tony’s success in converting a small van shop into one of the largest and most
profitable custom van operation in the Midwest. Tony seemed to have a special
ability to design and develop unique features and devices that were always in
high demand by van owners. An example was Shower-Rific, which was
developed by Tony only 6 months after Custom Vans, Inc., was started. These
small showers were completely self-contained, and they could be placed in
almost any type of van and in number of different locations within a van. Shower-
Rific was made of fiberglass, and contained towel racks, built-in soap and
shampoo holders, and a unique plastic door. Each Shower-Rific took 2 gallons of
fiberglass and 3 hours of labor to manufacture
Problem
 The owner of the company, planned to open two new plants in Rockford, Madison, or
Detroit.
 The problem was that Tony was a very smart person because he was able to invent
various types of specific devices required by van owners. He invented the `Shower-
Rific`, developed by Tony, just six months after founding Custom Vans, Inc. The
problem was that these small showers were completely self-contained and could be
placed in almost any van, and in various locations within the van.
 Shower-Rific is, usually made in the South American city of Gary, Indiana. Problem
stated that the production of these showers is 300 units per months, but according to
the problem, the production of showers is not enough to meet consumer demand.
 Tony received a number of complaints about the `Shower-Rifics` shortage, and Tony
decided to open another Shower-Rifics facility in Fort Wayne, Indiana. The Fort Wayne
facility can generate 150 Shower Ricks per month. The purpose of this process is to
minimize the profits Tony produces when he plans to expand his production units to
meet consumer demands.
1- Where would you locate the two new plants?
 Currently implemented solution:

Total Cost = 9,000 $

 Initial solution—Northwest corner rule:
  First Option: Detroit and Madison:
Initial solution—Northwest corner rule:

We can get optimal solution model through using this Mobile application
Optimal one for this Option
 Second Option: Madison and Rockford:

Initial solution—Northwest corner rule:

Optimal solution:
 Third Option: Detroit and Rockford:

Initial solution—Northwest corner rule:

Optimal solution:
After trying or implementing available three options of using new plants
in Rockford, Madison, or Detroit as follows:

 First Option: Detroit and Madison

Optimal Cost: 10,200 $

 Second Option: Madison and Rockford

Optimal Cost: 10,550 $

 Third Option: Detroit and Rockford

Optimal Cost: 11,400 $

So the right one with lowest optimal cost which is

The first option Detroit and Madison
 2- Why???

 Because the total cost is lowest in the following:

Gary – Fort Wayne – Detroit– Madison combination ($10,200).
 Then the new plants should be located in Detroit and Madison.
 This system is also an improvement over the existing pattern, which
costs $9,000, for now an extra 300 units can be shipped at an additional
cost of $1,200.
Presented By
Ahmed Salah Ali Mohamed Gharib
Osama Mohamed Harfosh
Ahmed Mohamed El Zakaziky
Ahmed Mahmoud Abd El Razik
Ayat Ibrahem Borey
Omnia Ahmed Salem
Amany Mohamed Abd El Moneim