Baldwin Wooster Corporation
Baldwin Wooster Company manufactures tractors. Currently it has two plants located in Berea and Phoenix, with capacities of 50,000 and 70,000. The tractors are shipped to following distribution centers showing associated demand. Boston – 50,000, Dallas – 70,000, Orlando – 40,000 and Portland – 80,000,
Because of anticipated increase in needs for the tractors, Baldwin is considering opening one to three new plants. Cities being considered are Atlanta, Omaha, and Tampa with plant capacities of 90,000, 60,000 and 70,000 respectively. Annual fixed and operating costs (in $000) associated with the new locations are: Atlanta $2,900,000, Omaha $1,400,000 and Tampa $2,200,000. Shipping cost per tractor is shown in the table below.
Shipping Cost $/tractor
Plant Boston Dallas Orlando Portland
Berea $25 $30 $33 $45
Phoenix $50 $22 $52 $18
Atlanta $26 $32 $15 $47
Omaha $38 $20 $45 $35
Tampa $24 $36 $12 $45
This problem is similar to the one in the text & discussed in the class.
Type the answers below in the space provided. What are the optimal schedule and the optimal cost? Where would you build the new plant(s)?