Business, 24.12.2021 09:30 nuggetslices

The Chambers Corporation produces and markets an automotive theft deterrent product, which it stocks in various warehouses. Throughout the country. Recently, its market research group compiled a forecast indicating that a significant increase in demand will occur in the near future. The company decides to satisfy this demand by constructing a new plant capacity. Chambers already has plants in Baltimore and Milwaukee and has no desire to relocate those facilities. Each plant is capable of producing 600,000 units per year. After a thorough search, the company developed three site and capacity alternatives,

Alternative 1- is to build a 600,000 unit pant in Portland.
Alternative 2- is to build a 600,000 unit pant in San Antonio.
Alternative 3- is to build a 300,000 unit pant in Portland and a 300,000 unit pant in San Antonio.

The company’s four warehouses distribute the product to retails. The market research study provided the following data:

Warehouse Expected Annual Demand
Atlanta (AT) 500,000
Columbus (CO) 300,000
Los Angeles (LA) 600,000
Seattle (SE) 400,000

The logistics department complied the following cost table specifying the cost per unit to ship the product from each plant to each warehouse in the most economical manner, subject to the reality of various carriers involved
Warehouse
Plant AT CO LA SE
Baltimore $0.35 $0.20 $0.85 $0.75
Milwaukee $0.55 $0.15 $0.70 $0.65
Portland $0.85 $0.60 $0.30 $0.10
San Antonio $0.55 $0.40 $0.40 $0.55

As one part of the location decision, management wants an estimate of the total distribution cost for each alternative. Use the transportation method to calculate these estimates.

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The Chambers Corporation produces and markets an automotive theft deterrent product, which it stocks...

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