ALHAMBRA Exercise

Alhambra,a company specialized on handmade manufacture of spanish guitars, has experienced a fall in its demand and needs to reduce his distribution costs by 40000 €.         A solution proposed is to change one of his warehouses in Alicante by another with less capacity in Murcia. There would be still enough capacity to supply the demand? Would this change satisfy the cost reduction needed?
The warehouses have this capacities: 

Madrid 4000
Bilbao 12000
Salamanca 7000
Seville 19000
Alicante 15000
Murcia* 6000
Store Demad:
Store 1 Store 2 Store 3 Store 4 Store 5 Store 6 Store 7 Store 8 Store 9 Store 10
15300 800 350 700 450 2100 6800 7000 10500 20000
Cost per unit:
 
Cost/unit Store 1 Store 2 Store 3 Store 4 Store 5 Store 6 Store 7 Store 8 Store 9 Store 10
Madrid 8 9 11 7 14 13 3 15 12 14
Bilbao 4 13 10 1 6 8 15 9 14 12
Salamanca 13 4 11 10 6 10 14 9 6 15
Seville 5 11 1 2 12 3 2 13 8 6
Alicante 7 2 4 5 1 10 1 10 13 4
Murcia* 12 6 3 3 15 11 14 9 6 3
SOLUTIONS:
1.There’s still enough capacity (47750/48000)
2.The reduction in transportation cost is not enough, it has been reduced by 39200. (255500-216300=39200)
By: Adrià Torreño Aguilar
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