The Winston Company has four distribution centers (A, B, C, and D) that require 40,000, 60,000, 30,000, and 50,000 gallons of de-ionized water, respectively, per month for cleaning their long-haul trucks. Three de-ionized water wholesalers (1, 2, and 3) indicated their willingness to supply as many as 50,000, 70,000, and 60,000 gallons, respectively. The total cost (shipping plus price) of delivering 1,000 gallons of de-ionized water from each wholesaler to each distribution center is shown in the following table: Distribution Center Wholesaler A B D 1 $1.70 $1.90 $1.60 $1.70 2 $1.40 $1.90 $1.60 $1.70 3 $1.60 $1.50 $1.80 $1.40 a. Which of the following statements regarding setting up the tableau for the optimal solution for this problem is true? O A. The sum of supply capacities is greater than the sum of demands, so a dummy distribution center is needed. O B. The sum of supply capacities is less than the sum of demands, so a dummy wholesaler is needed. OC. The sum of supply capacities equals the sum of demands, so no dummy wholesaler or distribution center is needed. The capacity is fully utilized and the demand is fully satisfied.

Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
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The Winston Company has four distribution centers (A, B, C, and D) that require 40,000, 60,000, 30,000, and 50,000 gallons of de-ionized water, respectively, per
month for cleaning their long-haul trucks. Three de-ionized water wholesalers (1, 2, and 3) indicated their willingness to supply as many as 50,000, 70,000, and
60,000 gallons, respectively. The total cost (shipping plus price) of delivering 1,000 gallons of de-ionized water from each wholesaler to each distribution center is
shown in the following table:
Distribution Center
Wholesaler
A
B
D
$1.90
$1.90
$1.70
$1.60
$1.70
2
$1.40
$1.60
$1.70
3
$1.60
$1.50
$1.80
$1.40
a. Which of the following statements regarding setting up the tableau for the optimal solution for this problem is true?
O A. The sum of supply capacities is greater than the sum of demands, so a dummy distribution center is needed.
O B. The sum of supply capacities is less than the sum of demands, so a dummy wholesaler is needed.
O C. The sum of supply capacities equals the sum of demands, so no dummy wholesaler or distribution center is needed. The capacity is fully utilized and the
demand is fully satisfied.
Transcribed Image Text:The Winston Company has four distribution centers (A, B, C, and D) that require 40,000, 60,000, 30,000, and 50,000 gallons of de-ionized water, respectively, per month for cleaning their long-haul trucks. Three de-ionized water wholesalers (1, 2, and 3) indicated their willingness to supply as many as 50,000, 70,000, and 60,000 gallons, respectively. The total cost (shipping plus price) of delivering 1,000 gallons of de-ionized water from each wholesaler to each distribution center is shown in the following table: Distribution Center Wholesaler A B D $1.90 $1.90 $1.70 $1.60 $1.70 2 $1.40 $1.60 $1.70 3 $1.60 $1.50 $1.80 $1.40 a. Which of the following statements regarding setting up the tableau for the optimal solution for this problem is true? O A. The sum of supply capacities is greater than the sum of demands, so a dummy distribution center is needed. O B. The sum of supply capacities is less than the sum of demands, so a dummy wholesaler is needed. O C. The sum of supply capacities equals the sum of demands, so no dummy wholesaler or distribution center is needed. The capacity is fully utilized and the demand is fully satisfied.
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