Case 36 Essay

631 Words3 Pages
Executive Summary Overview Agrifarm Company is in the business of buying and selling grain. The company wants to increase profitability by ensuring that shipping costs are kept low. All is shipments come from 3 rail cars origins. In addition, all shipments must be routed through either of two grain processing centers before sending them to the final customer. The object is to minimize the total shipping cost, therefore selecting the proper shipping route for each carload. Problem There is a total capacity (rail carloads) of 14 that is available to serve a total demand (rail carloads sold) of 15. With this mentioned, there is an unbalanced capacity and demand. To solve for the proper shipping route, we will have to include a dummy…show more content…
Objective Agrifarm Company’s main objective is to determine the proper distribution, within a distribution network, to minimize the total shipping costs to deliver carloads from origin to the hubs and finally to the customers. To do so, we are given two distribution cost tables that explain the processing center shipping costs, meaning origin to hubs, and the customer shipping costs, meaning from hubs to the final customer. Therefore, the cost to ship rail cars of grain from the origins and hubs will determine the proper distribution of rail cars from origin to destination. Solution Our optimal solution (total shipping cost) to meet all ten constraints is $513,000. Origin Muncie will not ship to hub Louisville but will ship 3 rail cars of grain to hub Cincinnati. Origin Brazil will ship 6 rail cars of grain to hub Louisville but will not ship hub Cincinnati. Origin Xenia will not ship to hub Louisville but will ship 5 rail cars to hub Cincinnati. Origin Dummy will ship 1 rail car to hub Louisville but will not ship to hub Cincinnati. Hub Louisville will ship 2 rail cars to customer Macon, 5 rail cars to Greenwood, 0 to Concord, and 0 to customer Chatham. Hub Cincinnati will ship 0 rail cars to customer Macon, 0 rail cars to Greenwood, 3 rail cars to Concord, and 5 rail cars to customer Chatham. Final Decision The proper

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