Network Optimization SCM/Ops Question

PROTRAC is a manufacturer of diesel engines that has four assembly plants in Europe. They are located in Leipzig (Germany), Nancy (France), Liege (Belgium) and Tilburg (Netherlands). The engines parts come in kits from the United States for final assembly in Europe. The engines are shipped from the US to three ports: in Amsterdam (Netherlands), Antwerp (Belgium) and Le Havre (France). Upon arrival at the destination port, engines are shipped to the production plants.

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Demand at each Plant

Plant:      Leipzig     Nancy     Liege    Tilburg      Total

# engines 400           900         200        500         2000

PROTRAC negotiated contracts for a set maximum volume at each port:

Max Supply of Engines 

Port:      Amsterdam     Antwerp      Le Havre     Total

# engines     500              700              800          2000

The engines are transported by common carrier and charges are on a per-engine basis.

Cost to Transport an Engine from Port to Production Plant

  1. 1)  PROTRAC must decide how many engines to send from each harbor to each plant. Using solver in Excel determine the solution that would minimize cost for PROTRAC.

  2. 2)  Realizing that they may need more flexibility in their network, PROTRAC negotiated with a fourth port located in Rotterdam. The shipping costs from Rotterdam are included below. They can ship up to 300 engines through Rotterdam, on top of the capacity already available at of other ports. Would this solution save money for PROTRAC? If so, how much? If not, how much more expensive is it?

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Conduct your computations in Excel using Solver. Please answer and question 1 and 2 into two separate worksheets. Submit your Excel file. 

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