Shoes manufacturer “Old Balance” has been operating its regular every-day business with 4 warehouses and 7 sales points ( warehouse capacities, sales points’ demands and transportation costs among them are presented in the table).
Yet, one day due to intense hipster protests one of the stores was destroyed and another one expanded:
- Sales point 3 was destroyed (demand: 2500 -> 0)
- Sales point 7 expanded (demand 1800 -> 5000)
Using the Transportation Model please calculate the following:
- The optimum total logistics costs with the initial demand;
- The optimum total logistics costs with the new demand, if the demand in store 6 and the expanded store 7 has to be satisfied;
- Total “Old Balance” savings/loss due to hipster protests (changes in demand).
- 54,600 EUR
- 56,700 EUR
- Loss of 2,100 EUR
By: Benas Bizevičius