Inputs - Costs, Capacities, Demands Fixed(Fi) Low(Ki)

Supply Region N. America S. America Europe Asia Africa

N. America 81 92 101 130 115 6,000 10S. America 117 77 108 98 100 4,500 10Europe 102 105 95 119 111 6,500 10Asia 115 125 90 59 74 4,100 10Africa 142 100 103 105 71 4,000 10Demand(Dj) 12 8 14 16 7

Decision Variables

Plants(Low) Plants(High)Supply Region N. America S. America Europe Asia Africa (1=open) (1=open)N. America 0 0 0 0 0 0 0S. America 0 0 0 0 0 0 0Europe 0 0 0 0 0 0 0Asia 0 0 0 0 0 0 0Africa 0 0 0 0 0 0 0

ConstraintsSupply Region Excess CapacityN. America 0S. America 0Europe 0Asia 0Africa 0

N. America S. America Europe Asia AfricaUnmet Demand 12 8 14 16 7

Objective FunctionCost = -

Demand RegionProduction, Inventory and Transportation Cost per

1,000,000 Units

Cost ($) in thousand

dollars per year

Capacity in million units

per year

Demand Region - Production Allocation (10,00,000 Units)

Fixed (Fi) High(Ki)

9,000 20 6,750 20 Demand in million of units 9,750 20 6,150 20 6,000 20

Total Cost= Fixed Cost + variable Cost

Sigma (Fi*Yi) from i=1 to nSigma (Fi*Yi) from i=1 to n

Decision Variable XijBinary Varibale Yi

Cost ($) in thousand

dollars per year

Capacity in million

units per year

B4:F8 are the variable production, inventory and transportation costs in thousand of dollars