The Neale Company has four distribution centers (A, B, C, and D) that require monthly shipments of 30,000, 24,000, 36,000, and 24,000 gallons of diesel fuel per month, respectively. Three wholesalers (1, 2, and 3) are willing to supply up to 36,000, 48,000 and 30,000 gallons, respectively. Total costs (in $) for both shipping and price per gallon follow. A transportation method tableau is provided below. WHOLE-SALER 1 2 3 DISTRIBUTION CENTER B A 2.20 1.90 2.30 C 2.00 2,00 2.30 2.00 1.90 2.30 D 2.00 2.20 2.00 REQUIREMENTS 30,000 24,000 36,000 24,000 CAPACITY 36,000 48,000 30,000

Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Table 13.11
The Neale Company has four distribution centers (A, B, C, and D) that require monthly
shipments of 30,000, 24,000, 36,000, and 24,000 gallons of diesel fuel per month,
respectively. Three wholesalers (1, 2, and 3) are willing to supply up to 36,000, 48,000 and
30,000 gallons, respectively. Total costs (in $) for both shipping and price per gallon follow. A
transportation method tableau is provided below.
WHOLE-SALER
1
2
3
DISTRIBUTION CENTER
B
A
2.20
Select one:
1.90
2.30
C
2.00 2.00
2.30
2.00
1.90 2.30
D
2.00
2.20
2.00
REQUIREMENTS 30,000 24,000 36,000 24,000
CAPACITY
36,000
48,000
30,000
Use the information in Table 13.11. Which of the following statements about this scenario is
incorrect?
A. A dummy warehouse is required to complete the analysis.
B. It costs $2 per gallon to ship one gallon from Wholesaler 2 to Distribution Center C.
C. It costs $2 per gallon to ship from Wholesaler 3 to Distribution Center D.
D. It costs $2 per gallon to ship 20,000 gallons from Wholesaler 1 to Distribution Center
D.
2
Transcribed Image Text:Table 13.11 The Neale Company has four distribution centers (A, B, C, and D) that require monthly shipments of 30,000, 24,000, 36,000, and 24,000 gallons of diesel fuel per month, respectively. Three wholesalers (1, 2, and 3) are willing to supply up to 36,000, 48,000 and 30,000 gallons, respectively. Total costs (in $) for both shipping and price per gallon follow. A transportation method tableau is provided below. WHOLE-SALER 1 2 3 DISTRIBUTION CENTER B A 2.20 Select one: 1.90 2.30 C 2.00 2.00 2.30 2.00 1.90 2.30 D 2.00 2.20 2.00 REQUIREMENTS 30,000 24,000 36,000 24,000 CAPACITY 36,000 48,000 30,000 Use the information in Table 13.11. Which of the following statements about this scenario is incorrect? A. A dummy warehouse is required to complete the analysis. B. It costs $2 per gallon to ship one gallon from Wholesaler 2 to Distribution Center C. C. It costs $2 per gallon to ship from Wholesaler 3 to Distribution Center D. D. It costs $2 per gallon to ship 20,000 gallons from Wholesaler 1 to Distribution Center D. 2
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