Assignment:
A large retailer is planning to open a new store to add to its two existing retail stores (A & B). Three locations in California are currently under consideration for the new store: South Coast Plaza (SCP), Fashion Island (FI), and Laguna Hills (LH). Each of these new stores under consideration will have a demand of 500 units. The product (construction building toy sets) is currently supplied from three warehouses (1, 2, and 3). Warehouses 1, 2 and 3 can each supply a total of 600, 340, and 200 units, respectively. The following two tables provide additional Information regarding supply/demand and shipping costs per unit reflected in $.
|
Shipping costs/unit
|
|
SCP
|
FI
|
LH
|
|
Warehouse 1
|
$ 4.00
|
$ 7.00
|
$ 5.00
|
|
Warehouse 2
|
$ 11.00
|
$ 6.00
|
$ 5.00
|
|
Warehouse 3
|
$ 5.00
|
$ 5.00
|
$ 6.00
|
|
A
|
B
|
Supply
|
|
Warehouse 1
|
$ 15.00
|
$ 9.00
|
600
|
|
Warehouse 2
|
$ 10.00
|
$ 7.00
|
340
|
|
Warehouse 3
|
$ 14.00
|
$ 18.00
|
200
|
|
Demand:
|
400
|
500
|
Formulate this problem as a linear programming (LP) problem by identifying the decision variables (e.g., let X1 = no. of units shipped from A to B, etc.), objective function (e.g., Min $15X1 + $9X2 +....), and all relevant constraints for the South Coast Plaza (SCP) location only (e.g., the relevant supply and demand constraints).
Explain your answer like I'm five; I have no clue about this.