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A furniture company has a factory located in Tekirdag and three warehouses in Adana, Corum and Manisa. The warehouses collect customer orders, which are then shipped from the factory. Upon receipt the warehouse distribute customer orders using small trucks. Dally demand at each of the warehouses along with the distance from Tekirdag is given below All shipments are by truck. Two truck sizes are available For replenishment frequency of one day and three days for each warehouse, identify the optimal transportation option (replenishment frequency & truck type combination) and the associated unit cost for each warehouse.
Expert Answer
Total cost is calculated by the following formula
Small truck = ( 250 + 0.1 * distance )* number of trucks needed
Large Truck = (400 + 0.1 * distance )* number of trucks needed
