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A beverage producer needs to minimize shipping costs from its two primary plants in Hamilton and Waterloo. All wholesale orders within the city are shipped from one of these plants. An outlet in Toronto orders 200 cases of soft drinks, on the same day an order for 240 cases comes from London. The plant in Hamilton has 300 cases ready to ship and the plant in Waterloo has 200 cases. The cost of shipping each case to Toronto is $0.50 from Hamilton, and $0.70 from Waterloo. The cost of shipping each case to London is $0.60 from Hamilton, and $0.65 from Waterloo. How many cases should be shipped from each warehouse to minimize costs?

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anthougo

Using the Least Cost Method, 200 cases should be shipped to Toronto from Hamilton and 100 cases from Hamilton to London with the remaining 140 cases shipped from Waterloo to London to complete the orders.

What is the Least Cost Method for solving transportation problems?

The Least Cost Method is a method of solving transportation problems. The allocation starts by allocating with the cell or column with the minimum cost.

The lower-cost cells are first chosen over the higher-cost cells to obtain the least cost of transportation.

Data and Calculations:

                        Toronto        London

Demand           200 cases   240 cases

Inventory:

Hamilton = 300 cases

Waterloo = 200 cases

Transportation Costs per case:

                        Toronto        London

Hamilton           $0.50           $0.60

Waterloo           $0.70           $0.65

Various Transportation Costs:

                        Toronto                              London

Hamilton           $100 (200 x $0.50)        $144 (240 x $0.60)

Waterloo           $140 (200 x $0.70)        $156 (240 x $0.65)

The number of cases that should be shipped from each warehouse to minimize transportation costs is as follows:

                        Toronto             London

Hamilton         200 cases         100 cases (at a total cost of $60)

Waterloo         0 case               140 cases (at a total cost of $91)

Total               200 cases        240 cases

Total transportation

costs       $100 (200 x $0.50)  $151 (100 x $0.60 + 140 x $0.65)

Thus, using the Least Cost Method, 200 cases should be shipped to Toronto from Hamilton and 100 cases from Hamilton to London with the remaining 140 cases shipped from Waterloo to London to complete the orders with the total transportation cost incurred for the two orders from Toronto and London as $251.

Learn more about solving transportation costs problems at https://brainly.com/question/15185511

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