In the distribution problem there is a possibility of opening new depots at Bristol and Northampton as well as of enlarging the Birmingham depot.[21]
It is not considered desirable to have more than four depots and if necessary Newcastle or Exeter (or both) can be closed down.
The monthly costs (in interest charges) of the possible new depots and expansion at Birmingham are given in Table 20.1 together with the potential monthly throughputs.
The monthly savings of closing down the Newcastle and Exeter depots are given in Table 20.2.
Table 20.1:
|
Cost (£1000) |
Throughput (1000 tons) |
|
|---|---|---|
|
Bristol |
12 |
30 |
|
Northampton |
4 |
25 |
|
Birmingham (expansion) |
3 |
20 |
Table 20.2:
|
Saving (£1000) |
|
|---|---|
|
Newcastle |
10 |
|
Exeter |
5 |
Table 20.3:
|
Supplier |
||||
|---|---|---|---|---|
|
Liverpool |
Brighton |
Bristol |
Northampton |
|
|
Supplied to |
factory |
factory |
depot |
depot |
|
New depots |
||||
|
Bristol |
0.6 |
0.4 |
||
|
Northampton |
0.4 |
0.3 |
||
|
Customers |
||||
|
C1 |
1.2 |
— |
||
|
C2 |
0.6 |
0.4 |
||
|
C3 |
As given for |
0.5 |
— |
|
|
C4 |
distribution problem |
— |
0.5 |
|
|
C5 |
0.3 |
0.6 |
||
|
C6 |
0.8 |
0.9 |
||
The distribution costs involving the new depots are given in Table 20.3 (in £ per ton delivered).
Which new depots should be built? Should Birmingham be expanded? Should Exeter or Newcastle be closed down? What would be the best resultant distribution pattern to minimize overall costs?