Construct a network representation of the problem of minimizing total transportation costs associated with shipping product from the warehouses to meet market demand.

Assignment 3 – Cargo assignment via linear programming

A pharmaceutical supplier with warehouses in Manchester, Madrid, and Rotterdam must meet market demand in Amsterdam, Vienna, Zurich and Lisbon. The following table summarize data relevant to this week’s distribution problem. The numbers in the first three rows and the first four columns are the transportation costs per unit from each distribution center to each market. Find the optimal allocation of inventory to minimize total transportation cost.

From/To Amsterdam Vienna Zurich Lisbon Supply Manchester €12 €10 €8 €9 800 Madrid €10 €15 €10 €7 650 Rotterdam €9 €8 €10 €12 600 Demand 400 650 600 400

a. Construct a network representation of the problem of minimizing total transportation costs associated with shipping product from the warehouses to meet market demand.

b. Formulate a linear programming model to solve this problem. (Write out the Objective Function and the constraints)

c. Solve the problem using Solver in Excel. (Make sure to save the spreadsheet and include in your Canvas submission)