Supply Chain Management: Strategy, Planning and Operation, 7th edition
By Sunil Chopra
CASE STUDY: Designing the Production Network at CoolWipes
1. What is the annual cost of serving the entire nation from Chicago?
The total annual costs from the Chicago plant to serve all regions = $87,961,000
This took into account the variable costs related to the demand + transportation costs
related to the unit quantity and the destination + the fixed costs related to both lines.
2. Do you recommend adding any plant(s)? If so, where should the plant(S) be built
and what lines should be included?
After considering the addition of possible plants for both the wipes and ointment lines
independently and in addition to the Chicago plant, I recommend adding a plant in
Atlanta and Los Angeles for wipes, and nothing additional for ointment. This was
determined by using solver to find the minimum of the objective, Total Cost, with the
constraints of:
● All demand being met
● All variables being positive
● The fixed cost multiplier being binary
