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Bindley Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd. Rinso manufactures the washers at four locations around the country: New York, Fort Worth, San Diego and
Minneapolis. Plans call for the following number of washing machines to be produced at each location:
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New York 50,000
Fort Worth 70,000
San Diego 60,000
Minneapolis 80,000
Bindley has three plants that can produce the motors. The plants and production capacities are:
Boulder 100,000
Macon 100,000
Gary 150,000
Due to varying production and transportation costs, the profit Bindley expects to earn on each 1,000 units depends on where they were produced and where they are shipped. The following table gives the accounting department estimates of the dollar profit per unit. (Shipment will me made in lots of 1,000.)
Shipped to
Produced at New York Ft. Worth San Diego Minneapolis
Boulder 7 11 8 13
Macon 20 17 12 10
Gary 8 18 13 16
Given profit maximization as a criterion, Bindley would like to determine how many motors should be produced at each plant and how many motors should be shipped from each plant to each destination. Also indicate which of the plants has excess capacity and how much
