# Where should ABC locate its plant? (Hint: Use Gravity Model and Excel Solver). Identify some of the influencing factors that affect ABC’s network design decision.

1. ABC is going to build a new manufacturing plant to serve five market regions. ABC has four supply sources. The coordinates of location, the demand of each market region, maximum units from each supply source and the shipping cost from each supply source or to each market region are shown below.

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Supply Chain Management LGMT 683

Problem Set 1

1. ABC is going to build a new manufacturing plant to serve five market regions. ABC has four supply sources. The coordinates of location, the demand of each market region, maximum units from each supply source and the shipping cost from each supply source or to each market region are shown below.
 Supply Sources Shipping Cost (\$/Ton Mile) Supply  (Tons) X Coordinate Y Coordinate S1 1.5 180 450 820 S2 1 220 280 900 S3 2 140 600 400 S4 2 170 850 700 Markets Shipping Cost (\$/Ton Mile) Demand (Tons) X Coordinate Y Coordinate M1 1 110 100 100 M2 1.5 70 200 300 M3 2.5 85 1000 100 M4 3 90 600 1100 M5 2 65 800 900

1. Where should ABC locate its plant? (Hint: Use Gravity Model and Excel Solver).
2. Identify some of the influencing factors that affect ABC’s network design decision.

1. Find the optimal allocation of demand to production facilities for the data given in the following table. (Hint: Use the model for allocating demand to existing facilities. First, formulate the problem and then use Excel Solver to find the optimal results.)
 Supply Location Demand Location Monthly Capacity (Ki) Production and Transportation Cost (\$ per unit) 1 2 3 1 2.0 1.0 1.7 17,000 2 0.9 2.0 1.3 20,000 3 1.8 2.4 1.6 29,000 Monthly Demand (Dj) 11,000 8,500 15,000