Chic is a global supplier of high-end special clothing material specifically for baby clothes. The company buys cotton from producers located in Alabama, Missouri, and Tennessee. The cotton is picked from the farms, cleaned, processed, and packed. The cotton is shipped in bales and transported on trucks to ports in Galveston, Louisiana, Mobile, and Baltimore where the cotton is loaded into 80-foot container vans to be shipped to Chic's factories around the world. Next year, Chic has an agreement with its cotton buyer in the United States to purchase 71,000 bales of cotton (1 bale - 550 pounds). The cotton buyer provided Chic with the following transportation and handling costs (for each bale) from each processing plant/ facility locations to each port: Farms and processing facility locations
Ports Mississippi Alabama Tennessee Demand at each port
(in millions of pounds)
Galveston $26 $18 $14 14.3
Louisiana $19 $23 $29 10.45
Mobile $14 $15 $21 7.7
Baltimore $27 $23 $32 6.6
Supply from each facility 24.75 17.05 14.85
(in millions of pounds)
Answer the following questions:
1) Is this a maximization or minimization problem? Explain your answer.
2) Is this a balanced or unbalanced problem? If unbalanced, is it is an oversupply or shortage situation? Explain your answer.
3) What is the $$$ value of your optimum solution?
4) How many bales of cotton should be delivered from each facility to each port?
5) Comment on the optimal solution and recommend a strategy for Chic that could maximize their profits.