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P&T Company Distribution Problem
Unit Cost
Destination (Warehouse) Sacramento Salt Lake City Rapid City Albuquerque Supply
Source (Cannery)
Bellingham $464 $513 $654 $867 75
Eugene $352 $416 $690 $791 125
Albert Lea $995 $682 $388 $685 100
Demand 80 65 70 85
and
xii 0 i 1, 2,3; j 1, 2,3, 4
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Integer Solutions Property
As long as all its supplies and demands have integer values,
any transportation problem with feasible solutions is
guaranteed to have an optimal solution with integer values
for all its decision variables. Therefore, it is not necessary to
add constraints to the model that restrict these variables to
only have integer values.
For more details, see 1997 Jan-Feb Interfaces article, “Blending OR/MS,
Judgement, and GIS: Restructuring P&G’s Supply Chain”.
Question: How many units should Nifty sell to each customer and
how many units should they ship from each plant to each
customer?
Question: How much water should Metro take from each river, and how much
should they send from each river to each city?
Unit Cost of
Maximum Unit Cost of Production Storage
Production ($million) ($thousand)
Question: How many engines should be produced in each of the four months
so that the total of the production and storage costs will be minimized?
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Spreadsheet Formulation 5
Question: How should Energetic meet the energy needs for the new
building?
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Cost Data for Energetic
Unit Cost
Energy Need: Electricity Water Heating Space Heating
Source of Energy
Electricity $400 $500 $600
Natural gas - 600 500
Solar heater - 300 400
San
Pittsburgh Atlanka Kanasas City Francisco
Refinery
New Orleans 6.5 5.5 6 8
Charleston 7 5 4 7
Seattle 7 8 4 3
Potential Refinery
Los Angeles 8 6 3 2
Galveston 5 4 3 6
St. Louis 4 3 1 5
Number of units needed 100 80 80 100
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