Inputs – Costs, Capacities, Demands
Fixed Low Fixed High
Supply Region N. America S. America Europe Asia Africa Cost ($) Capacity Cost ($) Capacity
N. America 81 92 101 130 115 6,000 10 9,000 20
S. America 117 77 108 98 100 4,500 10 6,750 20
Europe 102 105 95 119 111 6,500 10 9,750 20
Asia 115 125 90 59 74 4,100 10 6,150 20
Africa 142 100 103 105 71 4,000 10 6,000 20
Demand 12 814 16 7
Decision Variables
Small
Plants
Large
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 0 0 0 0 0 0 0 0
Europe 0 0 0 0 0 0 0 0
Asia 0 0 0 0 0 0 0 0
Africa 0 0 0 0 0 0 0 0
Constraints
Supply Region Excess Capacity
N. America 0
S. America 0
Europe 0
Asia 0
Africa 0
N. America S. America Europe Asia Africa
Unmet Demand 12 814 16 7
Objective Function
Cost = –$
Demand Region
Production and Transportation Cost per 1,000,000 Units
Demand Region – Production Allocation (1000 Units)
Obtaining Figure 5-7
1. Using Data | Analysis | Solver, solve the problem to obtain Figure 5–7.
Some alternative scenarios to try
1. What if a plant must be built in Europe? In this case add the
constraint I16 ≥ 1 in Solver and rerun.
2. What if plants must be built in every market? In this case, we need to add
constraints I14:18 ≥ 1 in Solver and rerun.