A company sells seven types of boxes, ranging in volume from 17 to 33 cubic feet. The demand and size of each box is given in Table 7. The variable cost (in dollars) of producing each box is equal to the box’s volume. A fixed cost of $1,000 is incurred to produce any of a particular box. If the company desires, demand for a box may be satisfied by a box of larger size. Formulate and solve a shortest-path problem whose solution will minimize the cost of meeting the demand for boxes. TABLE 7:
Solution
VerifiedThis can be modeled as a shortest-path problem with 8 nodes, one labeled 0 and the other 7 labeled by the possible box sizes, and with edges for all and associated cost given by the formula
where is the demand for boxes of size . The associated transshipment problem is given by the tableau
which has optimal solution
which tells us the company should produce boxes of sizes 19, 24, 26 and 33.
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