Solutions Plus Case Problem Essay

1005 WordsDec 12, 20115 Pages
Case Study Analysis: Abstract This analysis examines freight cost and cleaning fluid supplies at two locations; Cincinnati and Oakland, to determine the optimal distribution network to supply the cleaning fluid to Great North American at minimal cost to Solutions Plus. Based on projected cost a bid recommendation is made and decision factors related to the analysis are discussed. Keywords: Solutions Plus, Cost minimization, Breakeven, Bid, Shipping Cost Background Solutions Plus is an industrial chemicals company that produces cleaning fluids and solvents for many applications. Great North American railroad is taking bids for delivery of a cleaning fluid for its locomotives at eleven different locations. Solutions Plus can…show more content…
This also leads into the route capacity constraint. Oakland capacity is limited to 50,000 gallons and Cincinnati capacity to 500,000 gallons. The shipping cost and/or unavailability of transportation between the plants and some locomotive locations will eliminate some of the routes due to cost inefficiency. These routes are the unacceptable routes and will not be considered for distribution from the specified plant. By removing unacceptable routes, Solutions Plus is able to build a linear programming solution to determine which plant/locomotive location combinations are optimal. Based on the shipping cost provided, the routes that are eliminated are as follows: 1) From Cincinnati to Santa Ana, Los Angeles, Glendale, and Sacramento 2) From Oakland to Houston, Kansas City, Jacksonville, Little Rock, and Bridgeport In order to minimize cost, the 500,000 gallons of cleaning fluid from the Cincinnati plant will be distributed as follows: 1) El Paso – 6,583 at a cost of $13,429.67 2) Pendleton – 80,290 at a cost of $162,988.70 3) Houston - 100,447 at a cost of $165,737.55 4) Kansas City – 106,279 at a cost of $165,795.99 5) Jacksonville – 48,285 at a cost of $74,359.33 6) Little Rock – 88,335 at a cost of $136,036.33 7) Bridgeport – 69,780 at a cost of $107,460.86 The 50,000 gallons of cleaning fluid from the
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