Problem: Demonstrating how to locate plants or warehouse facilities to minimise shipping expenses while meeting demand. This problem is related to the class of
"network" or "routing" problems. In such problems, the variables
usually include multiple choices of transportation routes to and from a number of points
of origin and destination, with differing shipping and operating costs associated with
each possible route.
Your firm has a choice of five locations in which to operate a manufacturing facility. Six
markets exist with a demand for your product. Each potential plant has an associated
monthly operating cost, and shipping routes to the demand cities have varying costs. In
addition, each potential plant will have a production capacity which must not be exceeded.
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