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The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The company can produce air conditioners at six plants across the country and stock these units in any of four different candidate warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table along with the monthly capacity and fixed cost of operating each plant. Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Warehouse 1 $700 $800 $850 $600 $500 $700 Demand Warehouse 2 $1,000 $500 $600 Customer 1 $40 $60 $55 $80 $800 $600 $600 Warehouse 3 $900 $600 $700 $500 $450 $750 Customer 2 $80 $50 $40 $30 Customer 3 $60 $75 $65 $80 The monthly demand from each customer is summarized next: Customer 1 200 Customer 2 300 Warehouse 4 $1,200 $700 $500 $600 $700 $500 Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the monthly fixed cost of operating each warehouse. Customer 4 $90 $40 $60 $50 Fixed Cost $55,000 $40,000 $45,000 $50,000 $42,000 $40,000 Customer 5 $50 $35 $80 $60 Customer 3 200 Capacity 300 200 300 $40,000 $50,000 $35,000 $60,000 250 350 400 Fixed Cost Capacity 700 500 400 600 Customer 4 150 Impact on environment 5 9 7 6 8 9 Impact on environment 8 7 9 5 Customer 5 250

The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The company can produce air conditioners at six plants across the country and stock these units in any of four different candidate warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table along with the monthly capacity and fixed cost of operating each plant. Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Warehouse 1 $700 $800 $850 $600 $500 $700 Demand Warehouse 2 $1,000 $500 $600 Customer 1 $40 $60 $55 $80 $800 $600 $600 Warehouse 3 $900 $600 $700 $500 $450 $750 Customer 2 $80 $50 $40 $30 Customer 3 $60 $75 $65 $80 The monthly demand from each customer is summarized next: Customer 1 200 Customer 2 300 Warehouse 4 $1,200 $700 $500 $600 $700 $500 Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the monthly fixed cost of operating each warehouse. Customer 4 $90 $40 $60 $50 Fixed Cost $55,000 $40,000 $45,000 $50,000 $42,000 $40,000 Customer 5 $50 $35 $80 $60 Customer 3 200 Capacity 300 200 300 $40,000 $50,000 $35,000 $60,000 250 350 400 Fixed Cost Capacity 700 500 400 600 Customer 4 150 Impact on environment 5 9 7 6 8 9 Impact on environment 8 7 9 5 Customer 5 250

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter11: Simulation Models
Section11.4: Marketing Models
Problem 30P: Seas Beginning sells clothing by mail order. An important question is when to strike a customer from...
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Case description The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The company can produce air conditioners at six plants across the country and stock these units in any of four different candidate warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table along with the monthly capacity and fixed cost of operating each plant. Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Warehouse 1 $700 $800 $850 $600 $500 $700 Demand Warehouse 2 $1,000 $500 $600 Customer 1 $40 $60 $55 $80 $800 $600 $600 Warehouse 3 $900 $600 $700 $500 $450 $750 Customer 2 $80 $50 $40 $30 Customer 3 $60 $75 $65 $80 The monthly demand from each customer is summarized next: Customer 1 200 Customer 2 300 Warehouse 4 $1,200 $700 $500 Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the monthly fixed cost of operating each warehouse. $600 $700 $500 Customer 4 $90 $40 $60 $50 Fixed Cost $55,000 $40,000 $45,000 $50,000 $42,000 $40,000 Customer 3 200 Capacity 300 200 300 250 350 400 Customer 5 Fixed Cost Capacity $40,000 $50 700 $35 $50,000 500 $80 $35,000 400 $60 $60,000 600 Customer 4 150 Impact on environment 5 9 7 6 8 9 Impact on environment 8 7 9 5 Customer 5 250
Transcribed Image Text:Case description The CoolAire Company manufactures air conditioners that are sold to five different retail customers across the United States. The company is evaluating its manufacturing and logistics strategy to ensure that it is operating in the most efficient manner possible. The company can produce air conditioners at six plants across the country and stock these units in any of four different candidate warehouses. The cost of manufacturing and shipping a unit between each plant and warehouse is summarized in the following table along with the monthly capacity and fixed cost of operating each plant. Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Warehouse 1 $700 $800 $850 $600 $500 $700 Demand Warehouse 2 $1,000 $500 $600 Customer 1 $40 $60 $55 $80 $800 $600 $600 Warehouse 3 $900 $600 $700 $500 $450 $750 Customer 2 $80 $50 $40 $30 Customer 3 $60 $75 $65 $80 The monthly demand from each customer is summarized next: Customer 1 200 Customer 2 300 Warehouse 4 $1,200 $700 $500 Similarly, the per-unit cost of shipping units from each warehouse to each customer is given in the following table, along with the monthly fixed cost of operating each warehouse. $600 $700 $500 Customer 4 $90 $40 $60 $50 Fixed Cost $55,000 $40,000 $45,000 $50,000 $42,000 $40,000 Customer 3 200 Capacity 300 200 300 250 350 400 Customer 5 Fixed Cost Capacity $40,000 $50 700 $35 $50,000 500 $80 $35,000 400 $60 $60,000 600 Customer 4 150 Impact on environment 5 9 7 6 8 9 Impact on environment 8 7 9 5 Customer 5 250
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