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Location Problem

The document outlines production and transportation costs, capacities, and demands across various supply regions. It presents decision variables for production allocation and constraints related to excess capacity and unmet demand. The objective function indicates total costs associated with different scenarios for plant allocation and potential subsidies needed for North America.

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sonalipatnaikvssut
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23 views9 pages

Location Problem

The document outlines production and transportation costs, capacities, and demands across various supply regions. It presents decision variables for production allocation and constraints related to excess capacity and unmet demand. The objective function indicates total costs associated with different scenarios for plant allocation and potential subsidies needed for North America.

Uploaded by

sonalipatnaikvssut
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Inputs - Costs, Capacities, Demands

Demand Region
Production and Transportation Cost per 1,000,000 Units Fixed Low Fixed
Supply Region N. America S. America Europe Asia Africa Cost ($) Capacity Cost ($)
N. America 81 92 101 130 115 6,000 10 9,000
S. America 117 77 108 98 100 4,500 10 6,750
Europe 102 105 95 119 111 6,500 10 9,750
Asia 115 125 90 59 74 4,100 10 6,150
Africa 142 100 103 105 71 4,000 10 6,000
Demand 12 8 14 16 7

Decision Variables
Demand Region - Production Allocation (1,000,000 Small Large
Units) Plants Plants Total
Supply Region N. America S. America Europe Asia Africa (1=open) (1=open) Plants
N. America 0 0 0 0 0 0 0 0
S. America 12 8 0 0 0 0 1 1
Europe 0 0 0 0 0 0 0 0
Asia 0 0 4 16 0 0 1 1
Africa 0 0 10 0 7 0 1 1

Constraints
Obtaining Figure 5-7
Supply Region Excess Capacity 1. Using Data | Analysis | Solver, solve the prob
N. America 0 =G14*H4+H14*J4-SUM(B14:F14)
S. America 0 Some alternative scenarios to try
Europe 0 1. What if a plant must be built in Europe? In th
Asia 0 constraint I16 ≥ 1 in Solver and rerun.
Africa 3 2. What if plants must be built in every market?
N. America S. America Europe Asia Africa constraints I14:18 ≥ 1 in Solver and rerun.
Unmet Demand 0 0 0 0 0
=B9-SUM(B14:B18)
Objective Function
Cost = $ 23,751
High variable cost
Capacity
20
20 10mn plant cost
20
20
20

ure 5-7
| Analysis | Solver, solve the problem to obtain Figure 5-7.

tive scenarios to try


lant must be built in Europe? In this case add the
≥ 1 in Solver and rerun.
nts must be built in every market? In this case, we need to add
4:18 ≥ 1 in Solver and rerun.
Inputs - Costs, Capacities, Demands
Demand Region
Production and Transportation Cost per 1,000,000 Units Fixed Low Fixed
Supply Region N. America S. America Europe Asia Africa Cost ($) Capacity Cost ($)
N. America 81 92 101 130 115 6,000 10 9,000
S. America 117 77 108 98 100 4,500 10 6,750
Europe 102 105 95 119 111 6,500 10 9,750
Asia 115 125 90 59 74 4,100 10 6,150
Africa 142 100 103 105 71 4,000 10 6,000
Demand 12 8 14 16 7

Decision Variables
Demand Region - Production Allocation (1,000,000 Small Large
Units) Plants Plants Total
Supply Region N. America S. America Europe Asia Africa (1=open) (1=open) Plants
N. America 10 0 0 0 0 1 0 1
S. America 0 8 0 0 0 1 0 1
Europe 2 0 8 0 0 1 0 1
Asia 0 0 4 16 0 0 1 1
Africa 0 0 2 0 7 1 0 1

Constraints
Obtaining Figure 5-7
Supply Region Excess Capacity 1. Using Data | Analysis | Solver, solve the prob
N. America 0 =G14*H4+H14*J4-SUM(B14:F14)
S. America 2 Some alternative scenarios to try
Europe 0 1. What if a plant must be built in Europe? In th
Asia 0 constraint I16 ≥ 1 in Solver and rerun.
Africa 1 2. What if plants must be built in every market?
N. America S. America Europe Asia Africa constraints I14:18 ≥ 1 in Solver and rerun.
Unmet Demand 0 0 0 0 0
=B9-SUM(B14:B18)
Objective Function
Cost = $ 31,547

there should be plant in all regions.


total plant>=1
High variable cost
Capacity
20
20 10mn plant cost
20
20
20

ure 5-7
| Analysis | Solver, solve the problem to obtain Figure 5-7.

tive scenarios to try


lant must be built in Europe? In this case add the
≥ 1 in Solver and rerun.
nts must be built in every market? In this case, we need to add
4:18 ≥ 1 in Solver and rerun.
Inputs - Costs, Capacities, Demands
Demand Region
Production and Transportation Cost per 1,000,000 Units Fixed Low Fixed
Supply Region N. America S. America Europe Asia Africa Cost ($) Capacity Cost ($)
N. America 81 92 101 130 115 6,000 10 9,000
S. America 117 77 108 98 100 4,500 10 6,750
Europe 102 105 95 119 111 6,500 10 9,750
Asia 115 125 90 59 74 4,100 10 6,150
Africa 142 100 103 105 71 4,000 10 6,000
Demand 13.2 8.8 15.4 17.6 7.7

Decision Variables
Demand Region - Production Allocation (1,000,000 Small Large
Units) Plants Plants Total
Supply Region N. America S. America Europe Asia Africa (1=open) (1=open) Plants
N. America 0 0 0 0 0 0 0 0
S. America 11 9 0 0 0 0 1 1
Europe 0 0 0 0 0 0 0 0
Asia 2 0 10 18 0 1 1 1
Africa 0 0 5 0 8 0 1 1

Constraints
Obtaining Figure 5-7
Supply Region Excess Capacity 1. Using Data | Analysis | Solver, solve the prob
N. America 0 =G14*H4+H14*J4-SUM(B14:F14)
S. America 0 Some alternative scenarios to try
Europe 0 1. What if a plant must be built in Europe? In th
Asia 0 constraint I16 ≥ 1 in Solver and rerun.
Africa 7 2. What if plants must be built in every market?
N. America S. America Europe Asia Africa constraints I14:18 ≥ 1 in Solver and rerun.
Unmet Demand 0 0 0 0 0
=B9-SUM(B14:B18)
Objective Function
Cost = $ 28,254

demand increased by 10%


High variable cost
Capacity
20
20 10mn plant cost
20
20
20
1.1

ure 5-7
| Analysis | Solver, solve the problem to obtain Figure 5-7.

tive scenarios to try


lant must be built in Europe? In this case add the
≥ 1 in Solver and rerun.
nts must be built in every market? In this case, we need to add
4:18 ≥ 1 in Solver and rerun.
Inputs - Costs, Capacities, Demands
Demand Region
Production and Transportation Cost per 1,000,000 Units Fixed Low Fixed
Supply Region N. America S. America Europe Asia Africa Cost ($) Capacity Cost ($)
N. America 81 92 101 130 115 4,500 10 6,750
S. America 117 77 108 98 100 4,500 10 6,750
Europe 102 105 95 119 111 6,500 10 9,750
Asia 115 125 90 59 74 4,100 10 6,150
Africa 142 100 103 105 71 4,000 10 6,000
Demand 13.2 8.8 15.4 17.6 7.7

Decision Variables
Demand Region - Production Allocation (1,000,000 Small Large
Units) Plants Plants Total
Supply Region N. America S. America Europe Asia Africa (1=open) (1=open) Plants
N. America 13 7 0 0 0 0 1 1
S. America 0 0 0 0 0 0 0 0
Europe 0 0 0 0 0 0 0 0
Asia 0 0 12 18 0 1 1 2
Africa 0 2 3 0 8 0 1 1

Constraints
Obtaining Figure 5-7
Supply Region Excess Capacity 1. Using Data | Analysis | Solver, solve the prob
N. America 0 =G14*H4+H14*J4-SUM(B14:F14)
S. America 0 Some alternative scenarios to try
Europe 0 1. What if a plant must be built in Europe? In th
Asia 0 constraint I16 ≥ 1 in Solver and rerun.
Africa 7 2. What if plants must be built in every market?
N. America S. America Europe Asia Africa constraints I14:18 ≥ 1 in Solver and rerun.
Unmet Demand 0 0 0 0 0
=B9-SUM(B14:B18)
Objective Function
Cost = $ 27,905 0.17
High variable cost
Capacity
20
20 10mn plant cost
20
20
20

ure 5-7
| Analysis | Solver, solve the problem to obtain Figure 5-7.

tive scenarios to try


lant must be built in Europe? In this case add the
≥ 1 in Solver and rerun.
nts must be built in every market? In this case, we need to add
4:18 ≥ 1 in Solver and rerun.
how much subsidy should be given by a govt in North America to get plant in North america

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