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(Solved):     7. MC is looking for a location for a distribution center that provides the compu ...



7. MC is looking for a location for a distribution center that provides the computers to three new retail
outlets. The locati

 

Table for Q7
Retail
60
40
20
20
60
20
100
300
200

 

7. MC is looking for a location for a distribution center that provides the computers to three new retail outlets. The location of the outlets and the quantity handled at each are provided in the table below. Assuming freight rates for all outlets are the same (= 1), find the location of the distribution center by the gravity model. Show the total distribution cost at each iteration, and iterate the algorithm until the change in the total cost becomes less than 1%. Table for Q7 Retail 60 40 20 20 60 20 100 300 200


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SOLUTION: 3) Weekly demand, d = 250 Std dev, s = 50 Lead time, L = 2 weeks Reorder point, ROP = 600 . Safety stock = ROP - Lead time demand
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