Supply and Demand Decision
Several companies use warehouse inventory to stock company stores to serve the buyers. Shipping fees are a significant cost to the company. Ample Computers has warehouses in Chicago, New York, and San Diego. The firm owns company-owned, retail stores in Houston, Indianapolis, and Miami. Each warehouse has 3,000 computers in inventory. The demand for computers at the store in Miami is 2,500 or more. Indianapolis needs at least 2,500 computers, and a minimum of 4,000 computers has been requested at the Houston store.
Below are the shipping costs for each computer shipped from each warehouse to each company-owned, retail store.
Warehouse Houston Store Indianapolis Store Miami Store
Chicago $1.20 $0.60 $0.50
New York $2.00 $1.10 $0.90
San Diego $3.00 $2.60 $2.80
To minimize the shipping costs, how many computers should be shipped from each warehouse to each company-owned, retail store?
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A Supply and Demand Decision is studied.