Introduction to Operations and Supply Chain Management 3rd Edition Bozarth Test Bank

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Introduction to Operations and Supply Chain Management 3rd Edition Bozarth Test Bank

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Introduction to Operations and Supply Chain Management, 3e (Bozarth/Handfield)
Chapter 8 Logistics

1) Packaging is a logistics activity.
Answer: TRUE
Diff: 1 Page Ref: 221
Reference: Introduction
Keywords: logistics, packaging

2) The net result of the renaissance in logistics is that logistics costs are expected to decline.
Answer: FALSE
Diff: 2 Page Ref: 221
Reference: Why Logistics is Critical
Keywords: logistics, cost

3) In the United States, the value of goods transported via highway is greater than the value of goods transported by all other transportation modes.
Answer: TRUE
Diff: 2 Page Ref: 222
Reference: Logistics Decision Areas
Keywords: logistics, value, highway

4) Between any two locations, a less-than-truckload shipment probably experiences fewer stops and handling than a direct truck shipment.
Answer: FALSE
Diff: 1 Page Ref: 224
Reference: Logistics Decision Areas
Keywords: direct truck shipment, LTL, less than truckload, shipment

5) Roadrailers are considered a multimodal solution when all of their capabilities are utilized.
Answer: TRUE
Diff: 2 Page Ref: 225
Reference: Logistics Decision Areas
Keywords: roadrailers, multimodal

6) Cross-docking is essentially the reverse procedure from consolidation warehousing.
Answer: TRUE
Diff: 2 Page Ref: 226
Reference: Logistics Decision Areas
Keywords: cross-docking, consolidation warehousing, warehousing

7) Assortment warehousing is a form of warehousing that combines classic operations with light manufacturing and packaging duties in order to assure short customer lead times.
Answer: FALSE
Diff: 1 Page Ref: 228
Reference: Logistics Decision Areas
Keywords: postponement, assortment warehousing, warehousing

8) The most detailed level of a logistics information system is the execution system.
Answer: FALSE
Diff: 1 Page Ref: 229
Reference: Logistics Decision Areas
Keywords: logistics information system, information system, IS, execution
9) A material handling system includes equipment and procedures that are needed to move items within a facility, between a facility and a transportation mode, and between different transportation modes.
Answer: TRUE
Diff: 1 Page Ref: 230
Reference: Logistics Decision Areas
Keywords: material handling system

10) Inventory pooling occurs when a warehouse operator fails to complete shipments and is left with inventory that should be elsewhere.
Answer: FALSE
Diff: 1 Page Ref: 231
Reference: Logistics Decision Areas
Keywords: inventory, pooling

11) A company interested in consistently achieving a high level of on-time delivery would be best served by the highway or air modalities of transportation.
Answer: TRUE
Diff: 1 Page Ref: 232
Reference: Logistics Strategy
Keywords: transportation, mode, highway, air, water, rail, pipeline

12) The difference between a contract carrier and a common carrier is that the common carrier handles shipments on a case-by-case basis while the contract carrier handles shipments based on long-term contracts.
Answer: TRUE
Diff: 1 Page Ref: 232
Reference: Logistics Strategy
Keywords: common, contract, carrier, logistics

13) A third party logistics provider is a company that provides services when another firm decides to completely outsource the logistics function.
Answer: FALSE
Diff: 1 Page Ref: 232
Reference: Logistics Strategy
Keywords: 3PL

14) The perfect order measures how effectively logistics serves the customer but the landed cost measures how efficiently logistics provides that service.
Answer: TRUE
Diff: 1 Page Ref: 233
Reference: Logistics Strategy
Keywords: landed cost, logistics, perfect order

15) The landed cost is the sum of all of the logistics activities from packaging at the producers site through transportation, handling, customs, and any other logistics fees to the point of sale.
Answer: FALSE
Diff: 1 Page Ref: 234
Reference: Logistics Strategy
Keywords: landed cost, logistics, cost
16) A reverse logistics system handles repairs, recycling and goods that require redeployment elsewhere.
Answer: TRUE
Diff: 2 Page Ref: 235
Reference: Logistics Strategy
Keywords: reverse logistics

17) In order for the weighted center of gravity method to yield an optimal solution all of the transportation costs in the area must be identical.
Answer: TRUE
Diff: 2 Page Ref: 236
Reference: Logistics Decision Models
Keywords: weighted center of gravity, logistics, cost

18) The solution obtained from an assignment problem is an optimal answer to the problem of shipping goods from multiple sources to multiple destinations.
Answer: TRUE
Diff: 2 Page Ref: 238
Reference: Logistics Decision Models
Keywords: assignment problem, logistics

19) In order for the assignment problem method to yield an optimal solution all of the transportation costs in the area must be identical.
Answer: FALSE
Diff: 2 Page Ref: 238
Reference: Logistics Decision Models
Keywords: assignment problem, logistics

20) Which of these is NOT a logistics activity?
A) material handling
B) inventory management
C) warehousing
D) inspection
Answer: D
Diff: 1 Page Ref: 221
Reference: Introduction
Keywords: logistics, activity

21) What percent of North American gross domestic product is accounted for by logistics?
A) almost 8 percent
B) almost 12 percent
C) almost 16 percent
D) almost 20 percent
Answer: A
Diff: 2 Page Ref: 221
Reference: Why Logistics is Critical
Keywords: logistics, expense
22) The transportation mode with the highest dollar value of freight in the United States is:
A) water.
B) rail.
C) highway.
D) pipeline.
Answer: C
Diff: 1 Page Ref: 222
Reference: Logistics Decision Areas
Keywords: transportation, mode, highway

23) The transportation mode other than highway with the highest annual tonnage in the United States is:
A) air.
B) water.
C) rail.
D) pipeline.
Answer: C
Diff: 2 Page Ref: 222
Reference: Logistics Decision Areas
Keywords: transportation, mode, rail

24) This transportation mode is often the most expensive on a per pound basis.
A) air
B) rail
C) water
D) highway
Answer: A
Diff: 1 Page Ref: 223
Reference: Logistics Decision Areas
Keywords: transportation, mode, air

25) The mode of transportation that is highly cost effective for bulky items but has relatively poor delivery reliability and speed is:
A) highway.
B) water.
C) rail.
D) air.
Answer: B
Diff: 1 Page Ref: 223
Reference: Logistics Decision Areas
Keywords: transportation, mode, water

26) Cargo is loaded and unloaded only once with:
A) direct truck shipment.
B) less-than-truckload shipment.
C) multimodal solutions.
D) None of these modes always has only one loading and unloading.
Answer: A
Diff: 1 Page Ref: 224
Reference: Logistics Decision Areas
Keywords: transportation, mode, loading, unloading
27) Which of the following is an example of consolidation warehousing?
A) Large shipments from multiple suppliers are re-sorted into customized shipments to individual stores.
B) A single manufacturer takes output directly from a single manufacturing plant and sends it directly to a single customer.
C) A single manufacturer takes output from several of its manufacturing plants and combines them into one shipment to a major customer.
D) A single manufacturer holds a wide array of goods close to the source of demand.
Answer: C
Diff: 2 Page Ref: 225
Reference: Logistics Decision Areas
Keywords: consolidation, warehousing

28) Hub and spoke systems are characterized by:
A) spokes that are represented by the sites that receive the goods.
B) hubs that hold inventory until the appropriate season or upswing in demand.
C) inventory locations that are close to producers, not customers.
D) warehouses that are purely sorting facilities.
Answer: D
Diff: 2 Page Ref: 227
Reference: Logistics Decision Areas
Keywords: hub, spoke, warehousing, hub and spoke

29) One form of warehousing that features light manufacturing and packaging duties and allows firms to put off final assembly or packaging until the last possible moment is:
A) assortment warehousing.
B) spot stock warehousing.
C) postponement warehousing.
D) pac-man warehousing.
Answer: C
Diff: 1 Page Ref: 228
Reference: Logistics Decision Areas
Keywords: postponement, warehousing

30) The fireworks that were produced year-round in South Africa were sent to warehouses around the United States during the months of May and June in anticipation of large demand for the July 4th holiday. The warehousing system that is BEST suited to handle this situation is the:
A) assortment warehouse.
B) postponement warehouse.
C) spot stock warehouse.
D) break-bulk warehouse.
Answer: C
Diff: 2 Page Ref: 228
Reference: Logistics Decision Areas
Keywords: spot stock warehouse
31) A logistics manager uses this type of system to select a carrier for an outgoing shipment or to develop a weekly schedule of deliveries.
A) decision support
B) planning
C) execution
D) operating
Answer: B
Diff: 3 Page Ref: 228
Reference: Logistics Decision Areas
Keywords: logistics information system, information system, IS, planning

32) The most detailed level of logistics information systems is the:
A) decision support system.
B) planning system.
C) material handling system.
D) execution system.
Answer: D
Diff: 3 Page Ref: 229
Reference: Logistics Decision Areas
Keywords: logistics information system, information system, IS, execution

33) Which of the following is a type of material handling equipment?
A) 3PL
B) ASRS
C) LTL
D) RFID
Answer: B
Diff: 3 Page Ref: 230
Reference: Logistics Decision Areas
Keywords: material handling system

34) Which of these statements about inventory management is BEST?
A) Spot stock warehouses are more useful with less inventory in the system.
B) A system using air transportation experiences higher costs due to higher levels of inventory.
C) Cross-docking facilities dont need to match incoming and outgoing demand since they typically retain much of their inventory for a week or longer.
D) A system using water and rail transportation tends to have higher levels of inventory.
Answer: D
Diff: 3 Page Ref: 231
Reference: Logistics Decision Areas
Keywords: inventory
35) A firm that is interested in consistent on-time delivery would probably design their transportation and warehousing system to include:
A) air transportation with a spot stock warehouse.
B) rail transportation with a consolidation warehouse.
C) water transportation with a hub and spoke warehouse.
D) pipeline transportation with a postponement warehouse.
Answer: A
Diff: 2 Page Ref: 232
Reference: Logistics Strategy
Keywords: logistics, strategy, on-time, delivery, air, spot-stock

36) A service firm that takes care of all of the logistics requirements for other companies is a:
A) common carrier.
B) contract carrier.
C) third party logistics provider.
D) freight forwarder.
Answer: C
Diff: 1 Page Ref: 232
Reference: Logistics Strategy
Keywords: logistics, 3PL, third party logistics provider

37) Last year the Perfection Logistics Company delivered 3.1 million packages and damaged 45,000 deliveries, sent 28,000 to the wrong address, and was late 20,000 times. Their percent perfect order is:
A) 93000
B) 3007000
C) 97%
D) 93.7%
Answer: C
Diff: 1 Page Ref: 233
Reference: Logistics Strategy
Skill: AACSB: Analytic Skills
Keywords: perfect order, performance

38) The drought of 2011 devastated hay crops in the plains states and horse owners ranged far and wide to purchase hay for their horses when winter arrived. Hay can be purchased up north for $4 a bale and a few entrepreneurs with large trailers were more than willing to pick up a few hundred bales and haul them south where demand was high. The transportation cost was $6 per bale and a packing and loading cost of $1 was typical. The landed cost of a bale of hay this winter was:
A) $4.
B) $6.
C) $10.
D) $11.
Answer: D
Diff: 1 Page Ref: 234
Reference: Logistics Strategy
Skill: AACSB: Analytic Skills
Keywords: landed cost, logistics, cost

39) Universal Exports has several crates it needs to send from the United Kingdom to North Korea. They have located a firm that specializes in transferring cargo to the actual carrier that will bring the crates into North Korea. This firm could be described as:
A) an interlocuter.
B) a customs broker.
C) a freight forwarder.
D) a mercenary.
Answer: C
Diff: 1 Page Ref: 234
Reference: Logistics Strategy
Keywords: freight forwarder

40) Which of these statements about reverse logistics is BEST?
A) Reverse logistics systems are usually less cost-efficient than forward-based systems.
B) Reverse logistics systems are usually designed to be less flexible than forward-based systems.
C) Reverse logistics systems usually play no role in customer satisfaction.
D) Reverse logistics systems usually use the same processes and players that comprise the forward-based system.
Answer: A
Diff: 2 Page Ref: 235
Reference: Logistics Strategy
Keywords: reverse logistics

41) Your new Garden Weasel fails to completely satisfy you so you decide to return it for a full refund. What is the name for the system that will carry your weasel back to the manufacturer?
A) upstream logistics
B) reverse ordering
C) upstream ordering
D) reverse logistics
Answer: D
Diff: 1 Page Ref: 235
Reference: Logistics Strategy
Keywords: reverse logistics

42) Acme wants to locate a warehouse to serve their major customers that are shown in the table. What is the location that will minimize the transportation costs for their family of products?

Customer Annual Volume X-Coordinate Y-Coordinate
Coyote LLC 25 3 7
Destry 13 5 2
Kingston Inc. 6 8 4
Ed Wood Productions 4 1 5

A) Near (3,4)
B) Near (4,5)
C) Near (5,6)
D) Near (6,5)
Answer: B
Diff: 2 Page Ref: 236
Reference: Logistics Decision Models
Skill: AACSB: Analytic Skills
Keywords: weighted center of gravity, center, gravity

43) Using the map and annual volumes shown next to each location, what is the BEST location for a central warehouse that can be used to service all of the locations?

A) Near (2,3)
B) Near (3,2)
C) Near (3,4)
D) Near (4,3)
Answer: B
Diff: 3 Page Ref: 236
Reference: Logistics Decision Models
Skill: AACSB: Analytic Skills
Keywords: weighted center of gravity, center, gravity

Plants A, B, C, and D produce the same item that is demanded by customers W, X, Y, and Z. Customer demand and plant capacity are shown in the bottom row and rightmost column in the table. The cost to ship one unit between each combination of plants and customers is also shown in the table. The corporation wishes to minimize the total transportation costs of this assignment problem.

W X Y Z Total Capacity
A $3 $6 $4 $2 22,000
B $7 $10 $8 $6 19,000
C $10 $13 $11 $9 14,000
D $12 $15 $13 $11 15,000
Total Demand 25,000 15,000 18,000 12,000

44) What is a suitable constraint?
A) Minimize Cost = $3Saw + $6Sax + $4Say + $2Saz
B) Minimize Cost = $3Saw + $7Sbw + $10Scw + $12Sdw
C) Saw + Sbw + Scw + Sdw <= 25,000 D) Saw + Sax + Say + Saz <= 22,000 Answer: D Diff: 3 Page Ref: 238 Reference: Logistics Decision Models Skill: AACSB: Analytic Skills Keywords: assignment problem 45) Which of these is part of an appropriate objective function? A) $12DW + $15DX + $13DY + $11 DZ B) -$3AW - $7BW - $10CW - $12DW C) CW + CX + CY + CZ = 14,000 D) CW + CX + CY + CZ 14,000 Answer: A Diff: 2 Page Ref: 238 Reference: Logistics Decision Models Skill: AACSB: Analytic Skills Keywords: assignment problem, logistics 46) The ________ mode of transportation is highly cost effective for bulky items but has relatively poor delivery reliability and speed. Answer: water Diff: 1 Page Ref: 223 Reference: Logistics Decision Areas Keywords: transportation, mode, water 47) A(n) ________ uses more than one transportation mode through physical, information, and monetary flows that are as seamless as possible. Answer: multimodal solution Diff: 1 Page Ref: 225 Reference: Logistics Decision Areas Keywords: transportation, multimodal, solution 48) It looked like a scene right out of the Transformers series, albeit in a far more functional format. With the push of a button the rail car's wheels folded up into the body of the car and wheels suitable for highway transportation appeared out of nowhere. The whole process took only a minute or so and the ________ was ready to deliver steaming burritos to the growing crowd at the center of town. Answer: roadrailer Diff: 1 Page Ref: 225 Reference: Logistics Decision Areas Keywords: roadrailers, multimodal 49) ________ is a form of warehousing in which smaller outgoing shipments are created from large incoming shipments. Answer: Cross-docking Diff: 2 Page Ref: 226 Reference: Logistics Decision Areas Keywords: warehousing, cross-docking 50) The goods entered doors on one side of the massive building and crossed the floor to the other side, where they were loaded on delivery trucks headed out on their delivery routes. The screams of the workers were drowned out by the constant traffic from the nearby airport and rail yard, making this an ideal ________ for the retail giant. Answer: hub and spoke system Diff: 2 Page Ref: 227 Reference: Logistics Decision Areas Keywords: hub, spoke, warehousing, hub and spoke 51) The printer manufacturer shipped all finished goods to a centrally located warehouse just down the street from an international airport. When orders came in from one country, workers at the warehouse added instruction manuals in that language and included a power supply that fit the appropriate electrical distribution system. This is an example of ________. Answer: postponement warehousing Diff: 2 Page Ref: 228 Reference: Logistics Decision Areas Keywords: postponement, warehousing 52) Seasonal goods such as holiday decorations and recreational equipment may be placed in a(n) ________ close to the marketplace. Answer: spot stock warehouse Diff: 2 Page Ref: 228 Reference: Logistics Decision Areas Keywords: warehousing, spot stock 53) The online tracking systems offered by overnight carriers are examples of logistics information systems known as ________. Answer: execution systems Diff: 2 Page Ref: 229 Reference: Logistics Decision Areas Keywords: logistics, information system, execution system 54) A(n) ________ can handle shipments on an as-needed basis with no long-term contract required. Answer: common carrier Diff: 1 Page Ref: 232 Reference: Logistics Strategy Keywords: common carrier 55) The complicated gift basket was delivered exactly as it was designed and in plenty of time to be enjoyed during seasonal celebrations. From a logistics performance standpoint, the product could be considered a(n) ________. Answer: perfect order Diff: 2 Page Ref: 233 Reference: Logistics Strategy Keywords: perfect order, performance 56) A location model that looks at the problem of serving various demand points from multiple supply points at the lowest cost is the ________. Answer: assignment problem Diff: 1 Page Ref: 238 Reference: Logistics Decision Models Keywords: decision models, assignment problem, optimization 57) Define logistics and explain why it is critical. Answer: The Council of Logistics Management put it best when they said logistics "is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements." Logistics has a significant impact on a business's cost, flexibility, and performance. Logistics costs account for between 5 and 35 percent of total sales costs and represent one of the largest costs in international commerce. Logistics is one component of lead time, so as the time spent in this phase drops, lead time also drops. Lower cost and time mean improved performance for any business. Diff: 1 Page Ref: 221 Reference: Introduction, Why Logistics is Critical Keywords: logistics, expenditures 58) Compare any four transportation modes by volume of goods moved in the United States and apparent strengths and weaknesses. Answer: The five widely recognized transportation modes are highway, water, air, rail, and pipeline. From a dollar volume of goods moved, highway is over four times the volume of all other modes combined. From a tonnage standpoint, highway has two-thirds of the share, with water and rail each over 10% of share. From a ton-miles perspective, rail has 37% of the business, highway has almost 30% of the market with water and pipeline at 20% or lower. Highway transportation has great flexibility but is neither the fastest nor cheapest option. Water and rail are both highly cost effective for bulky items and are somewhat limited in locations, especially water transportation. Both also suffer from relatively poor delivery reliability and speed. Air is the quickest mode of delivery but also usually the most expensive on a per-pound basis. Pipelines are suitable for fluids and lack flexibility. Diff: 2 Page Ref: 222-223 Reference: Logistics Decision Areas Keywords: transportation, mode, highway, air, water, rail, pipeline 59) Choose a major manufacturer and a major retailer and describe two types of warehousing each might use and why they use it. Answer: Answers will vary depending on examples chosen. A major manufacturer might ship goods to a cross-docking facility that will enable them to parcel out their production to several smaller locations. They might also use break-bulk warehousing for the same purpose. Both techniques would lower costs by negating the need for long routes served by trucks with very limited variety. A retailer might use cross-docking to take large shipments from many suppliers and send a small portion to each of several retail locations. A retailer might also use a hub and spoke system as part of their distribution chain. Finally, retailers can use assortment warehousing or spot stock warehousing to serve as a buffer for periods of high demand so they can fill unexpectedly large orders. Diff: 2 Page Ref: 225-228 Reference: Logistics Decision Areas Skill: AACSB: Reflective Thinking Keywords: warehousing, consolidation, cross-dock 60) What are the three main categories of logistics information systems? What function does each serve? Answer: Logistics information systems fall into three major categories: decision support tools, planning systems, and execution systems. Logistics managers often use decision support tools to design and fine-tune their logistics systems. Such tools help managers choose locations for their warehouses, determine the number of containers or vessels they need, and estimate costs and travel times. Some decision support tools even have simulation and optimization capabilities. Planning systems help managers with specific activities, such as selecting a carrier for an outgoing shipment or developing a weekly schedule of deliveries. Of course, such activities have been going on for a long time. But with the aid of computer-based planning systems, today's logistics managers can more quickly analyze a wider range of options and identify the delivery schedule or carrier that best suits their needs. Execution systems are the most detailed level of a logistics information system. As the name implies, execution systems take care of the hundreds of small details associated with logistics activities, ensuring that planned activities take place as expected. They oversee order and shipment management, shipper/receiver management, satellite and bar code tracking, and automated payment and billing systems. Execution systems can also help managers monitor the logistics system and identify problems before they get out of hand. Diff: 2 Page Ref: 228-229 Reference: Logistics Decision Areas Keywords: information, information system 61) Compare the advantages and disadvantages of ownership of logistics assets. What factors should be considered when deciding whether to own or outsource the assets needed to execute the logistics function? Answer: Advantages and disadvantages should be linked to the organization's expertise in logistics and their overall strategy and business plan. If the firm has no expertise in the logistics area and time (deliverability) is how they have chosen to win orders in the market, then they are probably best served by outsourcing the function. If they have the expertise or can build it quickly and see delivery speed and flexibility as important, then they might consider owning their own assets, depending on their fit with the following factors. Some of the major considerations are reflected in the following questions: Does the firm have the volume needed to justify a private logistics system? Firms with low volumes or sporadic shipping needs (e.g., transport of seasonal produce) are probably better off contracting for those services. Would owning the logistics system limit the firm's ability to respond to changes in the marketplace or supply chain? Investing in a private fleet of trucks or network of warehouses ties up capital and commits a firm to managing those systems. While that may be fine for firms with stable supply chains, it can present a problem for firms whose markets or supply chain partners are changing rapidly. A manufacturer that wants the flexibility to quickly change from domestic to foreign suppliers probably should not own the trucks and warehouses it uses. Is logistics a core competency for the firm? Core competencies were defined as organizational strengths or abilities, developed over a long period, that customers find valuable and competitors find difficult or impossible to copy. Many firms have decided that logistics is not one of their core competencies. These firms generally outsource the logistics function to common carriers (also known as public carriers), which handle shipments on a case-by-case basis, or to contract carriers, which enter into long-term agreements with firms. Another choice is third-party logistics providers (3PLs), which are service firms that handle all of the logistics requirements for other companies. Using 3PLs allows companies to focus on their core competencies yet still enjoy access to state-of-the-art logistics capabilities. Diff: 2 Page Ref: 231-232 Reference: Logistics Decision Areas Keywords: outsource, strategy 62) What is a perfect order and what are five elements that might comprise such a measure? Answer: A perfect order is the timely, error-free provision of a product or service in good condition. Answers will vary on the elements used to measure a perfect order. Some elements might be level of damage to goods, invoice accuracy, complete shipment, on-time delivery, correct location, and order tracking information consistently available and updated. Diff: 1 Page Ref: 233 Reference: Logistics Strategy Keywords: perfect order 63) A producer of action figures is in a quandary about where to locate a central warehouse that will serve all of their regional centers for the coming millennium. They have predicted average annual demands for the following locations in the table. Location Demand X Coordinate Y-Coordinate Gotham City 200 9 8 Metropolis 500 7 5 Central City 800 5 5 Gateway City 600 0 5 Capitol City 150 8 6 Where should they locate their central warehouse? Answer: Weighted X Coordinate = = Weighted X Coordinate = 4. Weighted Y Coordinate = = Weighted Y Coordinate = 5. Diff: 2 Page Ref: 236 Reference: Logistics Decision Models Skill: AACSB: Analytic Skills Keywords: weighted center of gravity method, center, gravity 64) Plants A, B, C, and D produce the same item that is demanded by customers W, X, Y, and Z in the amounts shown in the table. The cost to ship one unit between each combination of plants and customers is also shown in the table. The corporation wishes to minimize the total transportation costs of this assignment problem. What are the decision variables? What is the objective function? What are the constraints? W X Y Z Total Supply A $3 $6 $4 $2 22,000 B $7 $10 $8 $6 19,000 C $10 $13 $11 $9 14,000 D $12 $15 $13 $11 15,000 Total Demand 25,000 15,000 18,000 12,000 Answer: The decision variables are the quantities that are to be shipped between each combination of plant and customer. Saw, Sax, Say, Saz, Sbw, Sbx, Sby, Sbz, Scw, Scx, Scy, Scz, Sdw, Sdx, Sdy, Sdz The objective function will be to minimize cost as a linear sum of all possible combinations of locations. Using S to represent the amount shipped from any plant to any customer: Min Cost = $3Saw + $6Sax + $4Say + $2Saz + $7Sbw + $10Sbx + $8Sby + $6Sbz + $10Scw + $13Scx + $11Scy + $9Scz + $12Sdw + $15Sdx + $13Sdy + $11Sdz The constraints are that each plant cannot ship more than it produces and that each customer cannot receive less than they want. Plant A: Saw + Sax + Say + Saz <= 22,000 Plant B: Sbw + Sbx + Sby + Sbz <= 19,000 Plant C: Scw + Scx + Scy + Scz <= 14,000 Plant D: Sdw + Sdx + Sdy + Sdz <= 15,000 Customer W: Saw + Sbw + Scw + Sdw >= 25,000
Customer X: Sax + Sbx + Scx + Sdx >= 15,000
Customer Y: Say + Sby + Scy + Sdy >= 18,000
Customer Z: Saz + Sbz + Scz + Sdz >= 12,000
Saw, Sax, Say, Saz, Sbw, Sbx, Sby, Sbz, Scw, Scx, Scy, Scz, Sdw, Sdx, Sdy, Sdz >= 0
Diff: 3 Page Ref: 238
Reference: Logistics Decision Models
Skill: AACSB: Analytic Skills
Keywords: assignment problem, objective function, constraint, decision variables

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