# Custom Vans Background

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CASE STUDY: CUSTOM VANS, INC. Custom Vans Background: * Specializes in converting standard vans into campers. * Shower-Rific is a small shower that could be placed in any type of van. * One Shower-Rific takes 3 hours of labor to build and use 2 gallons of fiberglass. * Most Shower-Rifics are manufactured in Gary which could produce 300 Shower-Rific in a month (but this capacity never seems to be enough). * Minneapolis is farther away from Gary than other Custom Van shops and Shower-Rifics have been delivered to other locations first. * Start another manufacturing plan at Fort Wayne, Indiana which could produce 150 Shower-Rifics per month. * Decision to open two new manufacturing plants as soon as possible…show more content…
OPTION ONE – DETROIT &amp; MADISON We use the solution from excel calculation; however it can be done using any of the 3 methods for example, Vogel’s Approximation Method as shown below. =SUMPRODUCT(B13:E16,B5:E8) Calculate using Excel Total cost of Option One = 300 (10) + 100 (30) + 150 (22) + 50 (15) + 150 (1) = \$10,200 SHOP PLANT | CHICAGO | MILWAU-KEE | MINNEA-POLIS | DETROIT | CAPACITY | GARY | 10 200 | 20 | 40 100 | 25 | 300 | FORT WAYNE | 20 100 | 30 | 50 | 15 50 | 150 | DETROIT | 26 | 36 | 56 | 1 150 | 150 | MADISON | 7 | 2 100 | 22 50 | 37 | 150 | DEMAND | 300 | 100 | 150 | 200 | 750 | Calculate using VAM Total cost of Option One = 200 (10) + 100 (20) + 100 (2) + 100 (40) + 50 (22) + 50 (15) + 150 (1) = \$10,200 OPTION TWO – MADISON &amp; ROCKFORD =SUMPRODUCT(B13:E16,B5:E8) PLANT SHOP | CHICAGO | MILWAU-KEE | MINNEA-POLIS | DETROIT | CAPACITY | GARY | 10 250 | 20 | 40 | 25 50 | 300 | FORT WAYNE | 20 | 30 | 50 | 15 150 | 150 | MADISON | 7 | 2 100 | 22 50 | 37 | 150 | ROCKFORD | 5 50 | 10 | 30 100 | 35 | 150 | DEMAND | 300 | 100 | 150 | 200 | 750 | Both EXCEL and VAM Total cost of Option Two = 250 (10) + 50 (5) + 100 (2) + 50 (22) + 100 (30) + 50 (25) + 150 (15) = \$10,550 OPTION THREE – DETROIT &amp; ROCKFORD =SUMPRODUCT(B13:E16,B5:E8) Calculate using Excel Total cost of Option Three = 300 (10) + 100 (30) + 150 (30) + 50 (15) +