Consider the facility location problem at the Giant Farmer Company described in Problem 16. Management is considering a third site, at Memphis. The shipping costs per case from Memphis are $3 to Miami, $11 to Denver, $6 to Lincoln, and $5 to Jackson. Find the minimum cost plan for an alternative plant in Memphis. Would this result change the decision in Problem 16?
Problem 16
The Giant Farmer Company processes food for sale in discount food stores. It has two plants: one in Chicago and one in Houston. The company also operates warehouses in Miami, Florida; Denver, Colorado; Lincoln, Nebraska; and Jackson, Mississippi. Forecasts indicate that demand soon will exceed supply and that a new plant with a capacity of 8,000 cases per week is needed. The question is where to locate the new plant. Two potential sites are Buffalo, New York, and Atlanta, Georgia. The two tables at the bottom of this page give data on capacities, forecasted demand, and shipping costs that have been gathered.
For each alternative new plant location, determine the shipping pattern that will minimize total transportation costs. Where should the new plant be located?
