Plant Fixed Cost
Variable
Cost/Unit
Capacity Fixed Cost
Variable
Cost/Unit
Capacity
Chicago 5,000 10 5,000 1,500 20 1,000
Princeton, NJ 2,200 10 2,000 1,500 20 1,000
Atlanta 2,200 10 2,000 1,500 20 1,000
LA 2,200 10 2,000 1,500 20 1,000
Zone Northwest Southwest
Upper
Midwest
Lower
Midwest
Northeast Southeast Total
Wipes 500 700 900 800 1,000 600 4,500
Ointment 50 90 120 65 120 70 515
Northwest Southwest
Upper
Midwest
Lower
Midwest
Northeast Southeast
Transport
Cost
Multiplier
Chicago 6.32 6.32 3.68 4.04 5.76 5.96 1
Princeton, NJ 6.60 6.60 5.76 5.92 3.68 4.08
Atlanta 6.72 6.48 5.92 4.08 4.04 3.64
LA 4.36 3.68 6.32 6.32 6.72 6.60
Northwest Southwest
Upper
Midwest
Lower
Midwest
Northeast Southeast Fixed Capacity
Chicago – – 900 800 – – 1 3,300
Princeton, NJ – – – – 1,000 600 1 400
Atlanta – – – – – – 0 –
LA 500 700 – – – – 1 800
Demand – – – – – –
Northwest Southwest
Upper
Midwest
Lower
Midwest
Northeast Southeast Fixed Capacity
Chicago 50 90 120 65 120 70 1 485
Princeton, NJ – – – – – – 0 –
Atlanta – – – – – – 0 –
LA – – – – – – 0 –
Demand – – – – – –
Total Cost 31,025.40
Plant Costs and Capacity
Wipes Variables
Ointment Variables
Ointment
Regional Demand by Product
Transportation Costs
Question 1
Set Cells H23 and H31 to be 1. Copy B11 to G11 to
B23 to G23. Copy B12 to G12 to B31 to G31. Total
cost is obtained in Cell B37.
Question 2
Use Data | Analysis | Solver to solve for the optimal
configuration. To change transportation costs,
change the multiplier in Cell I16.
Question 3
Delete the constraints in Solver setting Cells H23 and
H31 to 1 and resolve.