Finding Optimal Location SCM/Ops Question
Steel Appliances, a manufacturer of high quality refrigerators and cooking ranges, has one assembly factory located near Denver from which it has supplied the entire United States. Demand has grown, and Steel Appliances has decided to set up another factory to serve its eastern markets. Three parts plants that will supply the new assembly factory are located in Buffalo, New York, Memphis, Tennessee, and St. Louis, Missouri. The new assembly factory will supply markets in Atlanta, Boston, Jacksonville, Philadelphia, and New York. (The new factory will supply all of the demand for these markets. That is, the original factory near Denver will no longer supply these markets.) The unit transportation costs, quantities shipped, and location of the parts plants and markets are shown in the following table.
Formulate and solve an Excel Solver model to determine the coordinates of the new assembly factory that will minimize the transportation costs. Attach your Excel spreadsheet document and make sure you include your solver solution and constraints.
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