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Category > Accounting Posted 21 Jun 2017 My Price 6.00

Consider an order allocation problem under multiple sourcing, where it is required to buy 2000 units

6.11     Consider an order allocation problem under multiple sourcing, where it is required to buy 2000 units of a certain product from three different suppliers. The fixed set-up cost (independent of the order quantity), variable cost (unit price), and the maximum capacity of each supplier are given in the following (two suppliers offer quan- tity discounts):

 

Supplier    Fixed Cost     Capacity                         Unit Price

1

$100

600 units

$ 10/unit for the first 300 units

 

 

 

$7/unit for the remaining 300 units

2

$500

800 units

$2/unit for all 800 units

3

$300

1200 units

$6/unit for the first 500 units

 

 

 

$4/unit for the remaining 700 units

 

 

 

 

Criteria

 

Flexibility                               Price      Service

 

Sub criteria

 

Process capability Defective parts       Distance Lead time

 

FIGURE 6.8

Supplier selection criteria and sub-criteria (Exercise  6.12).

 

The objective is to minimize the total cost of purchasing (fixed plus  variable cost). Formulate this as a linear integer-programming problem. You must define all your variables clearly, write out the constraints to be satisfied with a brief explanation of each and develop the objective function.

 

 

 
 

 

Answers

Alpha Geek
(8)
Status NEW Posted 21 Jun 2017 06:06 AM My Price 6.00

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file 1498027954-Answer.docx preview (169 words )
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