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Allied Freight supplies goods to three customers, who each require 30 units. The company has two warehouses. In warehouse 1, 40 units are available, and shipping one unit from each warehouse to each customer are shown in the file P05-67.xlsx. There is a penalty for each
unsatisfied customer unit of demand: with customer 1, a penalty cost of $90 is incurred; with customer 2, $80; and with customer 3, $110.
a. Determine how to minimize the sum of penalty and shipping costs.
b. Use Solver Table to see how a change in the unit penalty cost of customer 3 affects the optimal cost.
c. Use Solver Table to see how a change in the capacity of warehouse 2 affects the optimal cost.
In the United Copiers service center model, we assumed that the potential locations of service centers are the same as existing customer locations. Change the model so that the customer locations are the ones given, but the only potential service center locations are in Memphis, Houston, Cleveland, Buffalo, Minneapolis, St. Louis, and Kansas City. Use Solver to find the optimal solution.


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