Aberdeen computer corp. (ACC) is located in Aberdeen,
Washington. The company has developed the WebSurfer, a low-cost
e-mail and Web-surfing appliance. This product is manufactured at
four plants, located in Atlanta, Kansas city, Aberdeen, and Austin.
After production, the WebSurfers are shipped to three warehouses,
located in Nashville, San Jose, and Houston. ACC sells the
WebSurfers through the retail channel. In particular, five
different retailers currently sell the webSurfer – Sears, Best Buy,
Fry’s, Comp USA, and Office Max. ACC makes weekly shipments to the
main warehouses of these five retailers. The shipping cost from
each plant to each warehouse, along with the production cost and
weekly production capacity at each plant, are given in the table
below.

The shipping cost from each
warehouse to each customer, the variable cost ( cost per unit moved
through the warehouse), the capacity ( maximum number of units that
can be moved through the warehouse per week ) for each warehouse,
and the weekly demand for each customer are given in the table
below.

                               
Shipping cost ($/unit)

a)Formulate and solve a linear programming
model in a spreadsheet to determine the plan for weekly production
and distribution of the WebSurfer from the various plants, through
the warehouses, to the customers that will minimize total
costs.

b)Now suppose that ACC is considering saving
money by closing some of its production facilities and/or
warehouses. Suppose there is a fixed cost to operate each plant and
each warehouse as indicated in the tables. Add binary variables to
your model in part a to incorporate the decision
of which plants and warehouses to keep open so as to minimize total
cost (including the fixed costs for any plant or warehouse that is
operated).