Andrew-Carter, Inc. Issue: Due to the economic depression, A-C considers to close one of its 3 plants. The objective is to minimize the Cost. Setup: 1. Make a tabular 2. P1, P2, P3 are the Plants 1, 2, 3 3. r = regular time; o = overtime 4. W1, W2, W3, W4, W5 are the Warehouses 1, 2, 3, 4, 5 5. # in cells is the variable cost per unit ( Variable cost in Table 10.40 + Distribution cost from Table 10.41) 6. Perform the comparative analysis by using QM for Windows or Excel.

W1 W2 W3 W4 W5 Supply P1r 3.30 =2.80+0.5 3.24 3.29 3.26 3.36 27,000 P1o 4.02 3.96 4.01 3.98 4.08 7,000 P2r 3.18 3.28 3.34 3.35 20,000 P2o 3.88 4.00 4.04 4.05 5,000 P3r 3.25 3.32 3.07 25,000 P3o 3.95 3.93 3.77 6,000 Demand 9,000 13,000 11,000 15,000 8,000 90,000 56,000

Using QM for Windows Assume Plant 1 is Closed: Start QM for Windows Select Module Menu Select Transportation Select File Menu Select New Define Data set for Transportation

Using QM for Windows Fill in data grid with problem data from the Tabular without P1 Solve the problem by clicking the solve button

Using QM for Windows Total Variable Cost without P1 = $188,360 The solution can be viewed in the data grid

Using QM for Windows Assume Plant 2 is Closed: Select File Menu Select New Define Data set for Transportation

Using QM for Windows Fill in data grid with problem data from the Tabular without P2 Solve the problem by clicking the solve button

Using QM for Windows Total Variable Cost without P2 = $183,430 The solution can be viewed in the data grid

Using QM for Windows Assume Plant 3 is Closed: Select File Menu Select New Define Data set for Transportation

Using QM for Windows Fill in data grid with problem data from the Tabular without P3 Solve the problem by clicking the solve button

Using QM for Windows Total Variable Cost without P3 = $189,930 The solution can be viewed in the data grid

Use Excel Solver to solve the question Open Excel Select QM and Transportation from the menu bar

Excel Solver Fill in the spreadsheet initialization as follows:

Excel Solver Without P1 Fill in the tabular after enter the spreadsheet initialization and click OK Select tool and solver from menu bar

Excel Solver Without P1 Set Solver Parameters as follows: Then click solve View the solution

Excel Solver without P2 Repeat the Steps in Slides 12 and 13 Fill in the tabular after enter the spreadsheet initialization and click OK Select tool and solver from menu bar

Excel Solver without P2 Set Solver Parameters as follows: Then click solve View the solution

Excel Solver without P3 Repeat the Steps in Slides 12 and 13 Fill in the tabular after enter the spreadsheet initialization and click OK Select tool and solver from menu bar

Excel Solver without P3 Set Solver Parameters as follows: Then click solve View the solution

Conclusion From the result of QM for windows or Excel Solver, We conclude that: Without Total Variable Cost P1 188,360 P2 183,430 P3 188,930

Discussion Question 1 Evaluate the various configurations of operating and closed plants that will meet weekly demand. Determine which configuration minimizes total costs. To close the Plant 2 minimize total cost because by closing the Plant 2 will minimize the total variable cost.

Discussion Question 2 Discuss the implications of closing a Plant. To minimize the cost is to determine the lowest total variable cost for closing the plant.